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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 / Retail
Wednesday, May 07, 2008
Southwest Airlines Introduces MONSTER Energy Drinks Onboard
Comtex
DALLAS, May 7, 2008 /PRNewswire-FirstCall via COMTEX News Network/ ----This week, Southwest debuted its newest beverage -- MONSTER LO-CARB. MONSTER'S ten-calorie energy drink can make longhaul flights a breeze allowing passengers to charge through the rest of their day.
"Southwest Airlines Customers are interested in more drink choices, and with the popularity of MONSTER, we knew we were making a winning decision," said Scott Halfmann, Southwest Vice President of Provisioning. "After carefully exploring and tasting our options in the non-alcoholic energy drink market, we feel we are offering Customers the best product out there."
Southwest began offering MONSTER LO-CARB onboard this week. The airline is offering the 8.3-ounce can of MONSTER LO-CARB for $3 or Customers can redeem Southwest's popular drink coupons for the beverage.
Weeks before the beverage was brought onboard the aircraft, Southwest and MONSTER toured the country hosting tastings for Southwest Airlines Flight Crews so they could experience the beverage firsthand before MONSTER was offered to Customers.
"We're excited to watch MONSTER take flight," said Dan Lamb, Vice President, Business Development and On-Premise Channels, Hansen Beverage Company. "MONSTER consumers have proven to be extremely loyal, so we know they'll appreciate finding their favorite drink on board Southwest. We salute Southwest for being one of the first major airlines to offer an energy drink to U.S. travelers."
MONSTER LO-CARB is produced by Hansen Natural Corporation and is distributed through the Anheuser-Busch wholesaler network. The energy drink category has grown dramatically over the last few years. Beverage Marketing Corporation reports that the category rose 24.7 percent in 2007. According to ACNielsen, MONSTER is the number one energy drink brand ranked by volume.
"Today's consumers have made energy drinks one of the fastest-growing segments of the beverage industry," said Gary Goldstein, Vice President, On-Premise Chain Sales, Anheuser-Busch. "As more diverse consumers discover the category, that growth is expected to continue over the coming years, making this a perfect time for Southwest to add MONSTER LO-CARB to its beverage service."
ABOUT SOUTHWEST AIRLINES
After 37 years of service, Southwest Airlines continues to offer the best value in airline travel, allowing Customers the opportunity to travel nonstop throughout the country at a very low fare. Southwest offers a very comfortable ride with premium all leather seats and plenty of legroom. Southwest does not charge Customers an extra fee for changing their reservation and continues to offer free amenities. Customers enjoy complimentary pillows, blankets, snacks, juice, soda, and water on all flights. Since 1987, the airline has maintained the fewest overall Customer complaints as published in the Department of Transportation's Air Travel Consumer Report. Southwest Airlines (NYSE: LUV), the nation's largest carrier in terms of domestic passengers enplaned, currently serves 64 cities in 32 states. Based in Dallas, Southwest currently operates more than 3,400 flights a day and has more than 34,000 Employees systemwide.
ABOUT HANSEN NATURAL CORPORATION
Based in Corona, California, Hansen Natural Corporation markets and distributes Hansen's Natural Sodas, sparkling beverages, fruit juice Smoothies, Energy drinks, Energade energy sports drinks, multi-vitamin juice drinks in aseptic packaging, Junior Juice juice, iced teas, apple juice and juice blends, Blue Sky brand beverages, Monster Energy brand energy drinks, Java Monster brand non-carbonated dairy based coffee drinks, Lost Energy brand energy drinks, Joker Mad Energy, Unbound Energy and Ace Energy brand energy drinks, Rumba brand energy juice, and Fizzit brand powdered drink mixes. For more information visit http://www.hansens.com and http://www.monsterenergy.com.
ABOUT ANHEUSER-BUSCH
Based in St. Louis, Anheuser-Busch is the leading American brewer, holding a 48.5 percent share of U.S. beer sales. The company brews the world's largest-selling beers, Budweiser and Bud Light. Anheuser-Busch also owns a 50 percent share in Grupo Modelo, Mexico's leading brewer, and a 27 percent share in China brewer Tsingtao, whose namesake beer brand is the country's best-selling premium beer. Anheuser-Busch ranked No. 1 among beverage companies in FORTUNE Magazine's Most Admired U.S. and Global Companies lists in 2008. Anheuser-Busch is one of the largest theme park operators in the United States, is a major manufacturer of aluminum cans; and one of the world's largest recyclers of aluminum cans. For more information, visit http://www.anheuser-busch.com.
SOURCE Southwest Airlines
http://www.southwest.com
Copyright (C) 2008 PR Newswire. All rights reserved
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