We like to think that when we deposit a dollar at the bank, it goes into a big vault and we can pull out that same dollar at any time. But that¿s not how the U.S. banking system works. Banks take that money and invest it to make money themselves, so cash gets spread around. This, naturally, leads to a big risk: What happens if those investments go sour? Well, you¿d be out of luck. You can¿t get your dollar back.

The Federal Reserve doesn¿t like that scenario, so it prohibits banks from putting all the cash it has on deposit on the line. In fact, the Fed forces banks to keep a portion of their assets at the Federal Reserve itself, to make sure that some of your assets won¿t get squandered if the bank¿s bets go south. These are called ¿reserves,¿ (hence, Federal Reserve. Got it? Good), and usually amount to 10% of the total cash kept in checking accounts.

These reserves are never exactly 10%, and banks like to keep a little extra in reserve ¿ not, as you might think, to make you more comfortable that they¿re in good financial shape, but rather so they can take that excess and lend it to other banks and make money off it. (They¿re banks, they can¿t help themselves.) The rate at which they make these loans is called the Federal Funds rate, which is set by the Federal Reserve¿s Federal Open Market Committee.

When you hear people chattering about how the Fed cut or hiked interest rates, this is what they¿re talking about: the interest rate banks can charge for lending money from their reserves. This begs the question: If these are essentially loans between banks, why is the Fed Funds rate so important for the rest of the economy?

Well, simply put, because loans make the financial world go round. Bank A lends Bank B $10,000 at a Fed Funds rate of 5%. Bank B then lends out $10,000 to a small business at 7%. The small business then takes that money and expands the business and hires new workers. Now someone is employed, Bank B has made interest off the loan, and Bank A is the richer for making it all happen. It¿s perhaps overly simplistic, but you get the idea. When you want the economy to thrive, you make lending cheaper.

Of course, sometimes you don¿t want the economy to thrive. In fact, you might want it to cool down, mostly to avoid money flooding the system and causing inflation. In that case, the Fed raises interest rates, making it difficult to lend or borrow.

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Thursday, June 12, 2008

Oceaneering Announces NASA Space Suit Contract

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HOUSTON, June 12, 2008 /PRNewswire-FirstCall via COMTEX/ ----Oceaneering International, Inc. (NYSE: OII) announced it has secured a contract from The National Aeronautics and Space Administration (NASA) to design and build the agency's next generation space suit known as the Constellation Space Suit System, or CSSS.

The initial contract term is for approximately six years with an estimated revenue value of over $180 million. During this time, Oceaneering will design and build suits for use during launch, abort, and re-entry of the new Orion spacecraft and for contingency Extravehicular Activity (EVA). The contract includes options to build additional suits, provide ongoing operational and training support, and to design and build suits for use during lunar surface activities. The first of these options is exercisable by NASA in October 2011.

The CSSS is a key component of the EVA System for NASA's Vision for Space Exploration. The new spacesuit system will be designed to be highly reliable, operationally efficient and simple to maintain. The CSSS will be used to sustain an American presence in low Earth orbit, help establish an outpost on the moon, and lay the foundation to explore Mars and beyond.

T. Jay Collins, President and Chief Executive Officer, stated, "We are pleased to have been selected to participate in the United States' continuing journey of space exploration. Our commitment to safety and 30-year heritage of developing and providing spaceflight hardware for NASA was instrumental in securing this contract award. While the contract will have minimal impact on Oceaneering's 2008 earnings, we look forward to a growing contribution from our Advanced Technologies business."

In collaboration with NASA, Oceaneering will lead a team that includes David Clark Company Incorporated and its subsidiary Air-Lock Incorporated, United Space Alliance LLC, Harris Corporation, and Paragon Space Development Corporation.

"Our team is excited about this tremendous opportunity to assist NASA in pushing the boundaries of space exploration," said Mark Gittleman, Vice President and General Manager of Oceaneering Space Systems. "We have a world class team of companies and individuals who are all committed to NASA and the Vision for Space Exploration. We have been working together with NASA for some time and are fully prepared to meet all of the requirements for the program."

The Oceaneering CSSS program office is located at Oceaneering Space Systems' facilities in Houston, Texas immediately adjacent to the Johnson Space Center. The team will be largely co-located, with program management, systems engineering, detailed design, production, testing, integration, and processing all provided in Oceaneering's facilities. The pressure suit will be produced in Worchester, Massachusetts and Milford, Connecticut, the avionics in Glendale, Arizona, selected thermal and life support components in Tucson, Arizona, and the communications system in Melbourne, Florida. Crew evaluations and fitting, and final acceptance testing, will also be performed at Oceaneering's facilities in Houston.

Oceaneering Space Systems supports NASA in training astronauts for extravehicular activity, and designs, develops, tests, produces, and certifies astronaut equipment, robotic systems, and thermal protection systems for NASA, the Department of Defense, and commercial applications.

Oceaneering is a global provider of engineered services and products primarily to the offshore oil and gas industry, with a focus on deepwater applications. Through the use of its applied technology expertise, Oceaneering also serves the defense and aerospace industries.

For further information, please contact Jim Buchli, CSSS Program Manager, Oceaneering Space Systems, 16665 Space Center Boulevard, Houston, Texas 77058; Telephone 281-228-5300; Fax 281 228-5547; E-mail jbuchli@oceaneering.com , or Jack Jurkoshek, Director Investor Relations, Oceaneering International, Inc., 11911 FM 529, Houston, Texas 77041; Telephone 713-329-4670; Fax 713-329-4653; E-Mail investorrelations@oceaneering.com .

SOURCE Oceaneering International, Inc.

http://www.oceaneering.com

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