The Bush administration’s plan to privatize Social Security would require individuals to purchase a guaranteed annuity with their investment proceeds upon retirement. A similar rule in the United Kingdom brought about a financial crisis that hobbled several financial institutions—most famously Equitable Life—in 1999. These insurance companies were unable to honor their guarantees when market interest rates fell below the rates they paid on the annuities they sold. If the administration goes ahead with its plan, it could set the stage for a similar, but much larger, financial crisis in the United States. How would this affect the risk profile of my investments in financial institutions?

Banks are slavering to expand their Chinese credit card businesses. The Chinese currently use cards for only 3 percent of their purchases, compared with a 15 percent average worldwide. Firms like Citigroup and American Express are considering expanding their card businesses, but the financial system in China is notoriously under-regulated and risky. Will this be a boon for my bank investments, or a quagmire?

Junk bonds are living up to their epithet, with investors accepting looser covenants and tighter pricing in order to glean some additional yield. Is it time to flee the high-yield market?

LBO firms have been flipping their investments, rather than investing for the long term, by taking newly acquired properties public more quickly than in the past. For example, several large firms bought PanAmSat for $4.1 billion in August 2004 and filed to take it public four months later. Is this enthusiasm for quick turnarounds good or bad for my investments in LBO funds?