Hedge funds now speculate in uranium. The nuclear fuel was formerly only traded by a small group of brokers and users and therefore had a very stable price. Will the hedge funds’ activity drive up uranium prices? Does this offer any investment opportunities for me?
Options on U.S. gross domestic product and the U.S. trade deficit are now available, and options on the U.S. inflation rate are in the works. Deutsche Bank, Goldman Sachs and ICAP have developed these economic derivatives to allow investors to bet on, or hedge against, macroeconomic variables. How will these affect the range of products available to me? Can I use them to speculate on, or hedge against, economic trends?
Pollution trading exchanges are now up and running throughout Europe in the wake of the implementation of the Kyoto Protocol on Climate Change. Observers say the European carbon dioxide market could be worth $2.2 billion per year. How will this new market affect my investments in European industrial companies? In utilities?
Private equity firms paid $9 billion in fees to investment banks in 2004 for merger advice and capital raising. This represented 17 percent of all investment banking revenues for the year. If the private equity market suffers another downturn—as it did in 2001 through 2003—what will it mean for my investments in the investment banking sector?
European companies are delisting from U.S. stock markets to avoid the costs of complying with Sarbanes-Oxley. Many are
opting for a listing in London. What does this mean for my access to these companies? Will investing in their shares become more costly?
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