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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.
Home / Markets / Industries / Finance
Tuesday, May 27, 2008
Deep Blue Marine, Inc. Files Multimillion-Dollar Lawsuit in Federal Court and Wins Injunctive Relief
Comtex
SALT LAKE CITY, May 27, 2008 (BUSINESS WIRE) ----Deep Blue Marine Inc. (Pink Sheets: DPBE) today announced that the United States District Court for the Central District of Utah issued a Preliminary Injunction against Edward Krajewski enjoining him, "directly or indirectly, including his agents, servants, employees, attorneys and person in active concert or participation with the foregoing" from "publishing statements concerning trade secrets, confidential, and/or proprietary information of Deep Blue Marine" and "from publishing false and/or defamatory statements regarding Deep Blue Marine, Wilf Blum, and/or Alexander Lindale, and/or their agents, employees or affiliates."
The Plaintiffs in the action, Deep Blue Marine, Wilf Blum and Alexander Lindale, also seek by way of their underlying complaint general, special and punitive damages in connection with Krajewski's breach of contract, tortious interference with economic relations and defamation. The complaint also names presently unknown defendants, listed as John Doe I-X.
Wilf Blum, President of DPBE, said, "It is sad that Mr. Krajewski has disregarded prior cease and desist letters from our attorney leaving us no other option but to seek and obtain injunctive relief in federal court. Hopefully, now Mr. Krajewski's onslaught of false and defamatory postings on various online investor message boards will stop. As president of Deep Blue Marine Inc., I was forced to take this action to protect the company, its shareholders and its business relationships. Having taken this preliminary action to enjoin Mr. Krajewski's abusive conduct, the Company will now pursue the underlying litigation for damages to the very end. Once we receive through discovery all related documents and records from all of the various message boards on which Mr. Krajewski posted, we will name any and all Doe defendants who may have cooperated with Mr. Krajewski. While the first amendment protects a person's right to speak, there are limits, particularly in the case of false, defamatory and destructive speech such as in this matter. Moreover, the Federal Court enjoined Krajewski from disclosing confidential and/or proprietary information of Deep Blue Marine in violation of an express, written Non-Disclosure Agreement that he signed with the Company. We are going to pursue this to the end, so that those who insist on this type of destructive behavior had better lawyer up, because you will be sued."
For more information on Deep Blue Marine Inc. (DPBE), go to www.alldeepblue.com.
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995
Statements in this press release relating to plans, strategies, economic performance and trends, projections of results of specific activities or investments, and other statements that are not descriptions of historical facts may be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking information is inherently subject to risks and uncertainties, and actual results could differ materially from those currently anticipated due to a number of factors, which include, but are not limited to, risk factors inherent in doing business. Forward-looking statements may be identified by terms such as "may," "will," "should," "could," "expects," "plans," "intends," "anticipates," "believes," "estimates," "predicts," "forecasts," "potential," or "continue," or similar terms or the negative of these terms. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. The company has no obligation to update these forward-looking statements.
SOURCE: Deep Blue Marine Inc.
Deep Blue Marine, Inc. Wilf Blum, 801-201-4691
Copyright Business Wire 2008
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