George Soros: US Recovery Is Far Off, Banks Are 'Basically Insolvent' | Hacker News Reader

George Soros: US Recovery Is Far Off, Banks Are 'Basically Insolvent'

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23 pointsnoor42015 comments

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You don't think the nice Mr Soros might have a personal financial interest in bank's share price dropping do you?

I'm just curious, why is Soros more likely than any other commentator to want banks' shares to decline?

He did make more than a billion dollars shorting the Bank of England...

How come his counterparties weren't smart enough to trade the same way he did?

That's not the point.

He's questioning Soros' motives for uttering the statement, not whether the statement is correct or not.

Why are his motives more important to us than the accuracy of the statement?

The Bank of England is not a publicly traded corporation, so it cannot be shorted at all. It is the central bank of the United Kingdom, which functions very much like the Federal Reserve in the United States.

George Soros bet the Bank of England would have to raise interest rates by sellings short several billion pounds. When the Bank of England succumbed to reality and devalued the pound, Soros profited about 10%.

He and other serious investors profit from being rational when everyone else is doing dumb things. The idea that banks are doing dumb things today should not come as a surprise and should not be much of a hard sell.

Soros used leverage so his actual profits were vastly greater than 10%.

You are correct. I should have thought through that more clearly.

More precisely, he made about $1b on about $10b after leverage. Who knows what his leverage may have been.

Maybe he made as much as 100% return on invested capital over the week.

No doubt Mr. Soros has decided how to invest his own funds, and will presumably jawbone so that the market moves in the direction he anticipates, but that does that make any of his statements factually incorrect? He has a pretty good track record for calling market turns that other investors miss, so my friendly suggestion is to analyze what Soros says and only disregard it if you can prove it wrong. (How would one prove Soros wrong on this assertion?)

He's not just an investor, he's also a philanthropist. Does intentionally undermining markets through dishonest public statements jibe with all the nice stuff he's done?

US charitable foundations (Carnegie, Welcome, Gates, most private Universities etc) are there to make money for their cause - they do not exist to do good in the markets or only invest in 'nice' companies.

When a stock market pundit, wether they work for Soros, Fox News or XYZ charity publishes something about a sector - it is because their employers have an interest in it being beleived.

He made much of his wealth through currency speculation^. Profiting when entire countries or regions of the world were in economic trouble (arguably hurting those countries). I think it's quite a rare skill to consistently be able to come out ahead speculating on currency. It's really all about speculating on global politics and economics.

I think he's trying to make up for it in his philanthropy. Personally I think a thief is a thief. Robin Hood or not..

As for him stirring the pot and making a statement. It's his right to do so. He'll make money no matter what happens to the economy. Though I would suspect he'll make more if the recession continues. My guess, he knew exactly what he was doing when he made this statement.

^ http://en.wikipedia.org/wiki/George_Soros#Business

You're joking, right?

I think his statement can't influence noticeably the bank's share price. But he is a respectful voice for me, because of his public position and personal success.

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