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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.
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Wednesday, April 30, 2008
Mixpo Names Jeff Lanctot to Board of Directors
Comtex
SEATTLE, Apr 30, 2008 (BUSINESS WIRE) ----Mixpo, an online video advertising company dedicated to serving the local small and medium-size business (SMB) market, today announced that it has appointed online advertising veteran Jeff Lanctot to its Board of Directors, effective immediately.
Lanctot currently serves as the Senior Vice President, Global Media for Avenue A / Razorfish. In this role, he oversees Avenue A / Razorfish's worldwide media business, a group that managed more than $735 million in digital media in 2007. In his eight years with the company, Lanctot and his teams have developed digital branding strategies, segmentation models and customer acquisition and retention programs on behalf of clients such as Disney, Coors, Expedia, Nike, Microsoft, Best Buy and WeightWatchers. He previously served as Vice President and General Manager of the agency's Northwest region.
"We are thrilled to add someone of Jeff Lanctot's caliber to our Board, as his considerable base of relevant expertise in online advertising will be invaluable to Mixpo as we continue to build the company's profile and leadership position," said Anupam Gupta, Mixpo President and CEO.
"Online video will play an increasingly critical role in marketing in the years to come and Mixpo is extremely well positioned to be a leader in this emerging sector, especially in the local SMB marketplace," said Lanctot. "Perhaps more than any other medium, video provides a rich experience that can bring brands to life. I am looking forward to working with the Mixpo team to address the significant opportunities at-hand, as the company's VideoAd platform is unique to the marketplace and holds considerable promise."
A recipient of Advertising Age's "Media Maven" Award, MEDIAWEEK's "Media All-Star" award, and B2B Magazine's "Best Brightest Media Strategist" award, Lanctot was also named one of Media Magazine's "50 Most Influential People in Online Advertising" and MEDIAWEEK's "Top 50 Media Executives." Lanctot, who began his career with Deloitte Consulting, is a graduate of Washington State University.
About Mixpo
Mixpo is an online video advertising company dedicated to serving the local small and medium-size business (SMB) market. Through its pioneering online video advertising platform, the company enables interactive agencies, publishers, directories, ad networks and marketplaces to easily and affordably create, deploy, and optimize online video ads that drive measurable results and fuel more effective marketing campaigns for their clients.
SOURCE: Mixpo
Pointer PR LLC Mark S. Peterson, 206-390-0204 mark@pointerpr.com
Copyright Business Wire 2008
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