2007年VOA标准英语-Financial Experts Debate Pros and Cons of Hedge

By Jim Randle
Washington, D.C.
04 April 2007
 
Watch Hedge Fund report

Some of the financial world's largest investment funds are getting bigger, more numerous and more likely to hurt the economy if they collapse¹.  Hedge funds, which are investment vehicles made up of lightly-regulated pools of money, grew by nearly one-third over the past year.  Critics say these funds are so big that they can unfairly manipulate markets and want government to regulate them more closely.  Supporters say hedge funds improve markets and warn that more regulation could hurt investors² and slow innovation.  VOA's Jim Randle reports.

There are at least 8,000 hedge funds and they control a gigantic $1.4 trillion dollars of investments.

That makes the fast-growing hedge fund industry slightly larger than the economy of Canada, and somewhat smaller than the gross domestic product of Brazil.  Some hedge funds make huge profits, but others go broke and cause serious problems.

 
University of Maryland professor Michael Greenberger
University of Maryland Law professor and former financial regulator Michael Greenberger says regulators, members of Congress and others have been taking a close look at hedge funds

"There is beginning to be a concern about the impact of hedge funds on the economy and a movement toward doing something about that," Greenberger says.

A hedge fund is a pool of investment money collected from individual investors or institutions by a fund manager and invested on their behalf.  The aim is to make money by finding stocks, companies or other things that are undervalued and buying them.  Or fund managers may find other assets that are overpriced and make an investment bet that the price will go down. 

Only a limited number of large, wealthy and presumably sophisticated investors are permitted to join hedge funds.  So these investment vehicles face less regulation and have to disclose less information than other investments, such as mutual³ funds.

And hedge funds are allowed to use much more aggressive – and risky⁴ – strategies than mutual funds.  For example, hedge funds can borrow stock or money to increase their investments.  That makes greater profits possible, but also exposes the fund to greater losses. 

If the investments go bad, then the fund might not be able to repay the loan, which could put the lender out of business.

Professor Greenberger warns that if a number of large hedge funds collapse at once, both the investors as well as the institutions that loaned money to the fund are hurt – and this could create a ripple⁵ effect throughout the financial system.  He says this nearly happened in the late 1990's.

"The granddaddy of calamities⁶ of hedge funds was the 1998 near-collapse of Long Term Capital Management,” he says.  “It was at the time, the world's largest hedge fund.  The conventional wisdom of that time was that if it failed in the long term, it would have caused terrific systemic collapse in the American economy.  It was not too far-fetched for people at that time to be talking about depression, economic depression."

Investment adviser⁷ Bill Mann of The Motley Fool company says the funds can sometimes use their huge pool of investment money to unfairly manipulate the market price of commodities, stocks, or other investments. 

For instance, things like crude oil, Asian currencies, or some stocks.

 
Investment adviser Bill Mann
"They absolutely could manipulate the market and I think it is important to note that in all likelihood, they do manipulate the market," he says.

Mann says an unscrupulous hedge fund manager could drive down the stock price of a company he wants to buy by spreading false reports that the company has problems.  Or a fund could sell large quantities of a particular stock, flooding the market and driving down the price, and then quickly buying up every available share at a lower price.

Some legislators and experts say governments should regulate hedge funds more closely and require them to disclose more about their actions to discourage improper⁸ behavior.

But some hedge fund managers say there are plenty of laws that already ban activities such as fraud and insider trading.  George Mason University researcher Houman Shadab says it would be unwise to force hedge funds to disclose secret trading strategies.

"It would be like forcing a cook or chef to reveal his secret recipes, the things that give him a competitive advantage over other hedge fund managers," he says.

Shadab says hedge funds make markets more liquid by increasing the number of investors bidding on stocks and other assets.

Top U.S. Bush administration economic officials recently examined the issues surrounding hedge funds and decided⁹ against major changes in regulations that govern them.  European officials are said to still be considering stronger regulations for hedge funds.

1 collapse   

vi.累倒；昏倒；倒塌；塌陷

参考例句：

• The country's economy is on the verge of collapse.国家的经济已到了崩溃的边缘。
• The engineer made a complete diagnosis of the bridge's collapse.工程师对桥的倒塌做了一次彻底的调查分析。

2 investors   

n.投资者，出资者( investor的名词复数 )

参考例句：

• a con man who bilked investors out of millions of dollars 诈取投资者几百万元的骗子
• a cash bonanza for investors 投资者的赚钱机会

3 mutual   

adj.相互的，彼此的；共同的，共有的

参考例句：

• We must pull together for mutual interest.我们必须为相互的利益而通力合作。
• Mutual interests tied us together.相互的利害关系把我们联系在一起。

4 risky   

adj.有风险的，冒险的

参考例句：

• It may be risky but we will chance it anyhow.这可能有危险，但我们无论如何要冒一冒险。
• He is well aware how risky this investment is.他心里对这项投资的风险十分清楚。

5 ripple   

n.涟波，涟漪，波纹，粗钢梳；vt.使...起涟漪，使起波纹； vi.呈波浪状，起伏前进

参考例句：

• The pebble made a ripple on the surface of the lake.石子在湖面上激起一个涟漪。
• The small ripple split upon the beach.小小的涟漪卷来，碎在沙滩上。

6 calamities   

n.灾祸，灾难( calamity的名词复数 )；不幸之事

参考例句：

• They will only triumph by persevering in their struggle against natural calamities. 他们只有坚持与自然灾害搏斗，才能取得胜利。 来自《现代汉英综合大词典》
• One moment's false security can bring a century of calamities. 图一时之苟安，贻百年之大患。 来自《现代汉英综合大词典》

7 adviser   

n.劝告者，顾问

参考例句：

• They employed me as an adviser.他们聘请我当顾问。
• Our department has engaged a foreign teacher as phonetic adviser.我们系已经聘请了一位外籍老师作为语音顾问。

8 improper   

adj.不适当的，不合适的，不正确的，不合礼仪的

参考例句：

• Short trousers are improper at a dance.舞会上穿短裤不成体统。
• Laughing and joking are improper at a funeral.葬礼时大笑和开玩笑是不合适的。

9 decided   

adj.决定了的，坚决的；明显的，明确的

参考例句：

• This gave them a decided advantage over their opponents.这使他们比对手具有明显的优势。
• There is a decided difference between British and Chinese way of greeting.英国人和中国人打招呼的方式有很明显的区别。