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| News & Scoreboards |
10 Questions for Your Private Banker - 7/04
07/01/2004
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Inflation-linked bonds are in vogue since the government announced that it would
issue new 5- and 20-year Treasury Inflation Protected Securities (TIPS) to
supplement its current 10-year offerings. While inflation is a serious concern,
TIPS are not tax-efficient, and some worry they may be overpriced. Should I
invest in TIPS or find other ways to hedge against inflation?
The IRS has
demanded client information from KPMG as part of its investigation into
allegations that the accounting firm offered “abusive” tax shelters. A federal
judge has ordered KPMG to provide the records. Does this set a precedent? Will
my advisors be able to keep my records confidential?
Private equity firms are
raising substantial amounts of investment capital via public offerings of stock.
Some of the biggest firms, including KKR and Blackstone, are reported to have
issues waiting in the wings. Are these shares a good investment? How do they
compare to my traditional private equity investments?
Many investment banks’
profits now depend on proprietary trading (that is, the bets they make with
their own capital). With interest rates on the rise, many formerly profitable
prop-trading strategies are losing their luster. If my bank suddenly suffers
losses, will it cut back its credit lines, as many banks did in response to
prop-trading losses in Asia and Russia in 1997 and 1998? Should I diversify my
sources of credit?
A virulent computer worm called Sasser, which attacks
Windows-based computers, disrupted operations at several global banks in early
May. How do I assess my bank’s systems security to ensure its services are
available when I need them?
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