George Soros

[blid2def]

How to capitalise the banks and save finance:
- http://www.ft.com/cms/s/0/55b32b9e-9888 ... 07658.html

He presents several ideas there. Easier to just read the whole article at the FT link provided above.

[winston]

Soros sees up to two-thirds reduction in hedge funds

CAMBRIDGE (Massachusetts) - The global financial crisis will reduce the hedge-fund industry to as little as a third of its current size, billionaire investor George Soros said on Tuesday.

'The hedge-fund industry is going to move through a shakeout,' Mr Soros, one of the world's first hedge-fund managers and still among the best known, said on Tuesday in a speech at the Massachusetts Institute of Technology.

'In my estimation (the industry) will be reduced in size by anywhere between half and two thirds,' he said. He did not specify if he was talking about the number of funds or the amount of money invested in them.

Many of the ultra-wealthy investors who fuelled a doubling in hedge-fund industry assets to about US$1.9 trillion across roughly 10,000 of the loosely regulated funds worldwide in the last three years have been pulling their money out, fearful of hedge-fund failures.

To stabilise the economy, regulators should oversee credit markets, which will make some aspects of the financial services business less profitable, said Mr Soros, one of the first voices to proclaim the severity of the current financial meltdown.

'You must regulate credit as well as money and that does require more regulation,' he added. 'Undoubtedly, the financial business will not be as profitable as it has been in the past 25 years.'

In recent years, finance companies accounted for as much as 40 per cent of US corporate profitability, said Mr Soros.

'That was an excess and that we will not come back to,' he said. 'Regulation will certainly make some businesses unprofitable and certain businesses that rely on excessive leverage ... will prove to be unworkable.'

'New mission' for IMF
Mr Soros, 78, said the International Monetary Fund needs to move to protect emerging markets or else today's global financial system will not last.

'The IMF has a new mission. It has to protect the periphery against the storm at the center,' Mr Soros said, referring to the US and developed Western economies that are at the centre of the global credit crunch.

'Unless actually the United States now leads an international effort to stabilize the system which includes the peripheral countries, I think the system will not continue.'

A staunch Democratic Party supporter, Mr Soros said he did not expect such a move out of the current White House.

'I don't expect this president to do it but I expect the next president to do it because otherwise the system will not continue, there will be a different system that will emerge and the United States will not have the influence that it has today,' Mr Soros said.

Soros, chairman of Soros Fund Management, supported US presidential hopeful Barack Obama during the Democratic primaries, and his views on public policy are more like those of the Illinois senator than his rival for the Oval Office, Republican Senator John McCain of Arizona. -- REUTERS

[iam802]

I am not sure how financial institutes function (banks, funds etc).

But, it seems to me that lots of analyst, traders, bankers are going to lose their jobs.

And replacement or alternative jobs will not be available in the short term.

[millionairemind]

Soros says U.S. needs billions more in aid measures
Sat Nov 22, 2008 5:45am

BERLIN, Nov 22 (Reuters) - The U.S. economy needs additional support measures of between $300 billion and $600 billion to help it withstand the financial crisis, U.S. billionaire investor George Soros was quoted as saying by a German weekly.

Soros, one of the world's first and best-known hedge fund managers, told Der Spiegel magazine the United States needed an infrastructure programme, as well as a large economic stimulus package to provide its cities and states with sufficient cash.

"It has exceeded my most daring expectations," Soros told Spiegel weekly in an advance copy of an interview due to be published on Monday.

He was referring to the scale of the international financial crisis.

The U.S. government has launched a $700-billion financial bailout initiative in response to the turmoil.

But Soros criticised U.S. Treasury Secretary Henry Paulson for having reacted too late to the crisis.

"He only reacted to the problems after they emerged. He did not have the ability to see these problems coming," Soros said, adding Paulson had been "totally unprepared" for the bankruptcy of investment bank Lehman Brothers.

Soros said he had high expectations of the ability of President-elect Barack Obama to take appropriate measures.

"The duration of the crisis depends on the success of his policies," Soros said, according to Der Spiegel. "I have high hopes on Obama."

[LenaHuat]

Learnt from GS abt how absurd things once were :

Soros: Giving government aid to a bank basically transforms it into a utility. The huge salaries in this sector are only a symptom of a more profound misalignment. The profitability of the finance industry has been excessive. For a while, 35 percent of all corporate profits in the UK and the US came from the financial sector. That was absurd.

For the entire interview with the German daily, pl read :-
http://www.spiegel.de/international/business/0,1518,592268,00.html

[iam802]

Taken from the article above.

SPIEGEL: Currently, Treasury Secretary Henry Paulson is in charge of the bail-out. What are your misgivings about his performance?

Soros: He reacted to problems as they arose; he had no capacity to anticipate them. When he allowed Lehman Brothers to fail, the breakdown of the financial markets found him totally unprepared. He went to Congress not with a plan but with a plan to develop a plan. And the plan he had in mind -- to purchase toxic assets -- was ill-conceived. Injecting equity capital into the banking system made much more sense and he eventually came to see that, but again he went about it in the wrong way. Then he stopped doing anything, leaving a vacuum in leadership, and the markets collapsed.

This is an interesting quote.

If his insights is correct, that Paulson is merely reacting and not anticipating and there is now a vaccum in leadership, then this adds weight to the probability that the market will not recover next year.

To me, this is definitely going against those who say that the huge amount of money flooding the market will be able lift 'us' out of the crisis in 2009.

[kennynah]

soros' commentaries on paulson is not useful. it is always easier criticize than to act. to what positive effect will his comments have in solving any of the problems at hand...if he is a true patriot, he will not continue to sabotage market sentiments ... i tend to think, his remarks are aimed at reaching his own agenda...perhaps, he is very Short right now...who knows...

this is a man, who philosophies about life, about investments, but have no qualms in destroying a country's financial situation, for his own personal gains... such people, i question their characters...

[winston]

by financecaptain on Tue Jan 20, 2009 8:40 am

WASHINGTON (Reuters) – The stimulus plan the U.S. government is currently considering is necessary to help American citizens, but it will likely not reverse the country's economic decline, hedge fund manager and billionaire philanthropist George Soros said on Monday.

"It is not enough to turn the situation around," Soros told the U.S. Conference of Mayors about the $850 billion proposal to increase spending and cut taxes. The plan, which was introduced in the U.S. House of Representatives last week and will likely be passed by next month, will help state and local governments balance their budgets and preserve important social services, Soros said.

At the same time, the $700 billion financial bailout known as TARP for Troubled Assets Relief Program had been carried out in a "haphazard and capricious way" and "without proper planning," he said. "Unfortunately it was misused and the way it was done has poisoned the well. It has created tremendous ill will toward putting up more money," Soros said.

For more than a year, the United States has been crippled by a recession that was triggered by a housing market downturn. Last summer, financial institutions with exposures to securities backed by bad mortgages began to buckle. The government stepped in with the TARP to inject liquidity into struggling firms. Last week, President-elect Barack Obama requested Congress release the second half of the funds. Soros advocated using bailout money to recapitalize banks, but said the $350 billion would not be enough.

He said such a move would take more than the entire $700 billion. The bursting housing bubble "acted like a detonator that exploded a much larger bubble," he said. "The economies of the world are falling off a cliff. This is a situation that is comparable to the 1930s. And once you recognize it, you have to recognize the size of the problem is much bigger," he said. Soros said the United States needed "radical and unorthodox policy measures" to prevent a repeat of the Great Depression of the early 20th century that include recapitalizing banks and writing down the country's accumulated debt.

Also, he said, it should create more money to offset the collapse of credit and then rapidly pull that cash out of the system when inflation emerges. The government would have to be very nimble in the timing of such moves, he said. "If they are successful...the deflationary pressures will be replaced by the specter of inflation and the authorities will have to drain the excess money from the economy almost as quickly as they pumped it in. Of the two operations the second one is going to be, politically, even more difficult than the first," he said.

[winston]

Risks of shorting sterling rise below $1.40: Soros

DAVOS, Switzerland (Reuters) - The risks of holding trading positions that assume further declines in sterling increase significantly when the currency falls below $1.40, hedge fund manager George Soros said on Wednesday.

He said he had shorted the currency, which plunged to multi-year lows last week and touched $1.34. But now he sees the outlook for sterling as neutral.

"I did foresee the fall in sterling," said Soros, chairman of Soros Fund Management. "But below $1.40, it seems to me the risks involved have changed."

"While we did have short positions in sterling, I am no longer bearish on the pound today. But that doesn't mean I am bullish either. It will just fluctuate around here for some time."

Sterling was trading around $1.420 at 8 a.m. EST on Wednesday.

[winston]

Soros Fund Management almost doubled Petrobras, Potash stakes last quarter