Wall Street Eyes Billions in the Colorado’s Water
He added, “The market would say that water is far more valuable to the urban population.”
Stakeholders interested range from financial firms to university foundations and investor groups, including at least two in Colorado run by former governors. T. Boone Pickens, the Texas oilman who died in 2019, was an early water-buying evangelist. Another supporter is Michael Burry, the hedge fund manager portrayed by Christian Bale in “The Big Short,” who made more than $ 800 million short of the subprime mortgage market in the mid-2000s.
Matthew Diserio, president and co-founder of the hedge fund Water Asset Management, described the US water business as “the world’s largest emerging market” and “a trillion dollar market opportunity.”
Based in New York and San Francisco, WAM invests heavily in water-related businesses. One of its core businesses is collecting water rights in arid states like Arizona and Colorado. Since leaving the government, Mr. Eklund has served as legal advisor and public face to WAM.
“They’re making water a commodity,” said Regina Cobb, the Arizona congregation woman who represents Cibola. “That’s not how water should be.”
Private investors want to add or expand existing elements of Wall Street for the water industry, such as: B. Futures markets and trading in milliseconds. Most would like the price of water, long shut down by utilities and governments, to soar.
Traders could take advantage of the volatility, whether it be due to drought, failing infrastructure, or government restrictions. Water markets have been referred to as “Arbitrage Paradise,” an approach where professionals use the speed of trading and access to information to generate profits. The situation has been compared to the energy markets of the late 1990s, when companies like Enron made money (some of which it turned out to be self-developed) with bottlenecks.
Many see the pact as a protection that isolates the river from the market.
The negotiating states will focus on restoring the Colorado River, which has been so diminished by use that it did not even reach its natural endpoint in the Gulf of California from 1998 to 2014. But you will also look at balancing the water levels in Lake Powell and Lake Mead, two federally owned reservoirs that hold water that can be used in extreme drought.