The New Chemistry of Speculation

1. In May, Credit Suisse and Deutsche Bank began offering investments in what
commodity?

Credit Suisse and Deutsche Bank began offering investment in Iron Ores, which
is base material for steel.

2. Are lawmakers justified in their concerns that speculation is driving up commodity
prices?

The lawmakers concern revolves to the correlation between Index Speculations
and the increase of the prices of these commodities. Their concern is justified as
investors can drive up the prices and have no intention to take physical delivery,
although its not the only reason why prices may rise in the future.

3. What happens during the monthly settlements on the iron ore contracts created
by Credit Suisse and Deutsche Bank?

These investments are cash-settled swaps or cash settlement, there is not
physical delivery. The payment is the net of the set prices versus a floating price
which is pegged to the index of the spot price.

4. Do the monthly settlements make the contacts more attractive to speculators or
to iron ore producers and users who want to hedge? Explain.

I believe these monthly settlements is attractive to speculators, Iron ore
producers, and users who may want to hedge. The reason being the fact that
Iron ore is a good investment which is new and has an spectacular growth, the
investment from speculators may continue the momentum of growth of value
which is beneficial to the Iron Ore Producers, and to those users who may have
manufacturing contract it will effectively hedge against the risk of the prime
material to rise.