George Soros

[millionairemind]

[b]Soros Predicts 'Stop-Go' Economy, Higher Rates

By: Reuters | 30 Jun 2009 | 09:05 AM ET

Billionaire investor George Soros Tuesday predicted a "stop-go" economy for the United States, saying fears of inflation will drive up interest rates and choke off growth.

Soros, one of the world's most successful hedge fund managers who was speaking at a breakfast hosted by the Wall Street Journal, said borrowing costs are the major headwinds for the economy.

"As markets revive, fear of inflation will drive up interest rates, which will choke off recovery," he said.

Rising U.S. Treasury yields have driven mortgage rates back up, threatening a recovery in the housing market and a refinancing boom that has helped preserve the still-fragile health of recession-weary households and the banks that lend to them.

The rise in bond yields and mortgage rates may also act to check the huge recent rally in global stock markets of the past three months, with the Federal Reserve trying to end an 18-month recession and yet not spur inflation.[/b]

Soros went back into retirement earlier this year after leading his self-named firm through the 2008 crisis. He made about $1.1 billion last year, according to Institutional Investor's Alpha Magazine.

Soros on 'Super Bubble'

Soros, who made his fortune targeting currencies in tightly controlled markets, said international financial markets need global regulation, even while being critical of regulators and calling for minimal government intervention.

"The idea of self-correcting markets is a misconception," he said. What governments need to do, he said, is recognize they cannot prevent bubbles but instead try to control them from getting bigger.

"You cannot prevent bubbles from forming but prevent them from self-reinforcement," Soros said.

Soros, who has retired from active fund management, acknowledged that getting regulation right is not easy as he argued both for and against stricter supervision.

"The regulators will always be wrong," he said. "They should interfere as little as possible."

Regulators, he said, typically try to control money supply and then let free markets take care of everything else, but that is a fallacy.

By the same token, Soros said that efforts by regulators and governments to stop bubbles bursting for more than 25 years gave rise to the most recent "super bubble."

Soros cautioned that the U.S. government may be making some serious missteps in dealing with the current credit crunch and recession. Massive stimulus spending and bank bailouts have pumped up the U.S. government's own balance sheet.

He also warned that while the worst of the 2008 crisis is past, investors do not appear to have learned their lesson.

"People want to pretend the crisis never happened," he said. "They want to go back to business as usual."

[kennynah]

next month, we will know how the fed board voted to retain rates this month...then, we will have a better idea on how some of these policy makers think...

[winston]

Is George Soros Long or Wrong on the Global Rebound? by Keith Fitz-Gerald, Money Morning

Billionaire investor George Soros thinks the worst of the global financial crisis is behind us.

In a June 20 interview with Polish television, the Hungarian-born Soros acknowledged that this has been the most serious crisis he’s seen in his lifetime, but said, “Definitely, the worst is behind us.”

For those that like to interpret “Soros-speak,” that’s as powerful a sign as any that one of the world’s most successful investors is “going long.”

But is he wrong?

On one hand, the World Bank is busy roiling the markets with recently updated figures that project a 2.9% decline in global economic activity this year. Then there are the signs that the “green shoots” (how I’ve come to detest that term) may be more like weeds. Debt is devastating the developed world and the once-mighty G-7 looks more like a G-1 every day.

On the other hand, I wouldn’t bet against him. When it comes to financial influence and acumen, Soros is about as powerful and prescient as they come. He’s made billions over the years speculating on things that others simply couldn’t see or, more often, didn’t want to believe. He’s as iconic as he is legendary for making big bets on market timing even if, by his own admission, he’s not always right.

For the millions of investors who are tempted to interpret Soros’s comments as bullish, that admission forces me to urge caution. In fact, my advice to proceed with caution extends to any comments that might be made by such other investment legends as Warren Buffett, or even Soros’ former investment partner, noted author and commentator Jim Rogers.

I preach caution for three reasons:

Despite the fact that each of these men is fabulously successful, the typical retail investor has no idea how much money they’re betting on the upside, or what percentage of their wealth is involved in any publicized position.

It’s not clear what - if any - protective stops are being used so you don’t know whether the positions they’ve taken represent core portfolio holdings or speculative trades.

These revelations - disclosures - are usually made after the fact, which means that investors who may want to tag along for the ride are put in the risky position of having to make “me too” investments.

So if you’re a savvy investor, what steps can you take to translate moves being made by three of the best investors of our time into profits of your own?

A good place to start is by taking the time to understand precisely what drives these guys. Even though Rogers hunts for opportunities around the world, Soros tends to pursue investment plays involving currencies and macroeconomic trends, and Buffett is a deep value guy, they are more alike than they are different. That’s especially true since the core elements of the strategies these three investors use to win and profit usually run counter to Wall Street’s conventional wisdom.

Take the very concept of profits, as an example. Most people are surprised to learn that none of these gentlemen sits around over coffee in the morning, rolling his hands with an evil laugh as he wonders aloud how much money he’s going to make on that day. But nearly all have gone on record at one point or another talking about the importance of not losing money in the first place. They’ve also repeatedly stressed the importance of waiting until the really compelling opportunities develop before they put their money at risk.

Rogers, once Soros’ partner at the Quantum Fund, a hedge fund that’s often described as the first real global investment fund, goes a step further. He describes his investment process as a little like waiting until somebody else puts money down in the corner, then “walking over and picking it up.”

Another common trait is that not one of these three investors believes that you have to take big risks to make big money. In fact, all three gentlemen believe, as I do, that it’s how you concentrate your wealth that matters.

This flies in the face of what Wall Street would have you believe which is that you need to diversify your assets to get ahead. Diversification as Wall Street practices it is a complete misuse of the math and a proxy for an entire establishment that doesn’t know what it’s doing.

The thinking is that by spreading your money around willy nilly, some of your holdings will rise in value, even as other parts of the portfolio fall. Even so, by diversifying, Wall Street says that you will be better off for it over the long run. Granted, there are some instances where taking steps to “diversify” leaves you better off than if you’d done nothing at all, but one of the critical problems with diversification as Wall Street has practiced it is that it doesn’t work when everything goes down at once - as so many investors who had been led to believe they were protected found out the hard way in 2000 and again in 2007.

That’s why, for example, I’m a proponent of concentrating my efforts on a few relatively high-probability choices, especially when it comes to trading services, such as the Geiger Index or the New China Trader, for example. It’s a strategy that individual investors should consider, as well.

But what matters most is that people put the comments they hear from these guys into perspective and think for themselves. It’s important to remember that neither Buffett, nor Soros nor Rogers care about what other people think. That’s one of their real strengths. Nor do they care what the markets will or won’t do.

In fact, none of the three - as least as far as I can tell from the research that I’ve done - subscribes to the “random walk” or “efficient market” theories I’ve mentioned as complete bunk in recent months.

The bottom line is that Soros, Buffett and Rogers have demonstrated time and again that they’ll only make a move when they’re darned good and ready - when they’ve done all they can to scope out the situation at hand, and done everything possible to make sure that the percentages are in their favor.

That, alone, is a terrific lesson for retail investors to learn. Wall Street tries to push investors into action with advertisements that portray “real” people making trades from their kitchens, or getting the latest quotes on their mobile phones. They show attractive retired couples who’ve achieved their dreams with big sailboats, or antique cars, or on expensive vacations. Ignore those messages and you’ve effectively elbowed aside the artificial sense of urgency that Wall Street is trying to create.

Not only is this manufactured urgency designed to separate more of you from your money, but they wouldn’t do it if they knew that most investors got it “right” more often than they got it wrong.

Buffett, Soros and Rogers act only when they believe the time is right. Buffett has referred to this as waiting for the Sunday pitch. If you’ve never heard that term before, it’s one that dictates extreme patience while all the spitballs, knucklers and sliders go by. You only take action when the one pitch you know you can hit out of the park is on its way - then you swing from the heels, giving it all your effort.

There’s one final task that these guys do better than almost anyone - and that’s to keep everything in perspective. They assemble their portfolios carefully with diligent planning, attention to detail and an emphasis on the objectives they expect to achieve. They make investments based on a clearly defined set of expectations and do not hesitate to cut their losses if they find out they were wrong.

In that sense, every investment choice they make fits a specific role in their portfolio. Nothing, if they can help it, is left to chance. So to the extent there’s any action to be taken right now, let me leave you with one final thought.

No nation in the history of mankind has ever bailed itself out by doing what we’re doing now, which means that placing bets on a “recovery” is really a fool’s errand. On the other hand, making choices that capitalize on the trillions of dollars now being injected into the world’s financial system is the place to be. History shows that it’s better to be generally long resources, inflation-resistant choices, and real companies with real earnings.

Not only will these types of profit plays fall less than others if the markets stumble and fall from here, they’ll also rise faster and farther once the capital infusions start to work their way through the global financial system and the rebound gets under way.

And I’ll bet my bottom dollar that George Soros knows it.

[winston]

U.S. economy has bottomed: George Soros By Edward Krudy

NEW YORK (Reuters) - The U.S. economy has hit bottom and the current quarter will see positive growth due to the government's stimulus spending, billionaire financier George Soros said on Tuesday.

"I think it (the stimulus) has made a difference, the economy has actually bottomed and I think we are facing a positive quarter, and I think that is largely due to the stimulus," he said in an interview with Reuters Television in New York.

The Obama administration is pumping $787 billion into the economy in a bid to turn around the deepest recession since the 1930s. The U.S. economy shrank by 1 percent in the second quarter after tumbling 6.4 percent in the quarter before that, the biggest decline since 1982.

Soros said he did not believe the economy needed more stimulus money, despite calls for a second round of spending. Notably, in July, House of Representatives Majority Leader Steny Hoyer said the U.S. should be open to more government spending if needed.

Also on Tuesday, U.S. President Barack Obama sounded a cautious note, saying the economy is "not out of the woods" despite signs lagging business investment was reviving. Last week the White House said there are no plans for a second stimulus package.

Back in June Soros said the United States faces a "stop-go" economy because rising borrowing costs could generate major headwinds for the still-fragile economy. Soros is Chairman of Soros Fund Management.

[winston]

George Soros Buys Petroleo Brasileiro S.A.Petrobras, AutoZone Inc., InterOil Corp., Sells Arch Coal Inc., Public Service Enterprise Group, PPL Corp.

George Soros must be very bullish on stocks, he bought a lot, espeically oil. He was already heavily invested in energy stocks, and he bought more.

Petroleo Brasileiro alone is accounted for more than 22% of his fund. Soros Fund Management LLC. George Soros owns 211 stocks with a total value of $2.6 billion as of 06/30/2009.

These are the details of the buys and sells:-

http://www.gurufocus.com/news.php?id=66288

[LenaHuat]

Soros announced a $1b investment in clean energy technology.

[winston]

DJ US Economy To Drag Down Global Growth: Soros - Reuters

U.S. investor George Soros said the U.S. economy will drag down global growth and China's pegging of its currency to the dollar is ensuring it remains undervalued and 'unsustainable,' the Reuters news agency reported.

'The world economy is going to have some growth, but we are bound to be flat,' Reuters reported the head of Soros Fund Management as saying Thursday.

Soros said, according to Reuters, that the continued pegging of the renminbi to the dollar will ensure it's undervalued.

'And that will be unsustainable,' Soros said, according to the report.

http://www.reuters.com/article/newsOne/ ... 7C20091016

[winston]

GEORGE SOROS SAYS MARKET AT RISK OF DOWNTURN

This week’s Guru Outlook takes a look inside the mind of George Soros – one of the original masters of the global macro hedge fund universe. Soros, of course, became famous for breaking the Bank of England. Soros made a spectacularly leveraged bet against the British Pound which netted him over $1B in a day.

Soros rose to recent notoriety for predicting the financial crisis. He was far more bearish than most others and appeared to have a crystal ball with a play-by-play for each step of the crisis. Like some of the guru’s we’ve spoken of lately, he wasn’t bearish all the way up. Soros saw the decline in markets as a buying opportunity and has taken the liberty to make billions for his investors on both the way down and the way up.

Although Soros has turned more bullish over the course of the last 6 months he has not lost sight of the forest for the trees. Much like Jeremy Grantham, Soros believes we are confronted with massive structural long-term problems – particularly in the United States.

He believes U.S. consumers are in the middle of a long-term deleveraging process and earlier this month he described the U.S. banking system as “bankrupt”. He sees very weak consumer spending and a drag from the banking sector holding down global growth for years to come.

In a recent interview, he said the market is now very overextended and at substantial risk of another downturn. But that doesn’t mean the market will turn down immediately.

Soros says the market is likely to remain buoyant throughout the remainder of 2009 and will likely face its reality of weak global growth in 2010. He says the rally has been driven by the government stimulus and little else.

Soros says the recent uptick in bank earnings is essentially a fraud:
“Those earnings are not the achievement of risk-takers. These are gifts, hidden gifts, from the government.”

Soros recently said the move down in the dollar was unsustainable (he obviously reads too much TPC) and that its link to the Renminbi would reduce the overall decline. Despite this, Soros is betting big on all things “real”.

In particular, Soros is betting big on oil related names. Soros has over 33% of his funds invested in energy related names. He recently announced large positions in Interoil (IOC) and Headwaters (HW). Soros’ largest positions remain PetroBasiliero (PBR) and Hess (HES) which both represent over 5% of his portfolio.

Soros was also a heavy investor in convertible bonds in recent quarters. Of particular interest were semiconductor names. Soros bought large bond stakes in RF Micro Devices (RFMD), LSI, and Linear Tech (LLTC).

http://pragcap.com/the-guru-outlook-george-soros-says

[winston]

Soros: Major Bloodletting Ahead; By: Gene J. Koprowski

Billionaire George Soros believes a “bloodletting” may be in the offing for leveraged buyout firms (LBOs) and commercial real estate investors amid the worst economy in seven decades.

“In commercial real estate and leveraged buyouts, the bloodletting is yet to come,” Soros said in a speech in Europe, reported by Bloomberg News.

“These factors will continue to weigh on the American economy, and the American consumer will no longer be able to serve as the motor for the world economy.”

Bankers across the globe have accounted for $1.66 trillion of write downs and write-offs on bad loans since the start of the credit crisis in 2007.

Moody’s Investors Service reports that the global speculative default rate will peak at 12.5 percent this quarter as the U.S. and European economies struggle. The rate rose to 12 percent in the third quarter, up from 2.8 percent a year earlier, Moody’s reports.

That’s nearly 10 percent in just 12 months.

Soros reckons that, given these facts, the global economic recovery is “liable to run out of steam” and that a “double-dip” recession may emerge in 2011.

Others agree that a double-dip recession may hit soon, but for other reasons.

New York Times columnist Paul Krugman, a Nobel Prize winner, says that the double-digit unemployment rate is undermining confidence, and not just in the financial industry.

With more suffering likely, the poor economic leadership of the world’s largest countries may cause a collapse of confidence among ordinary workers and businesses worldwide.

http://moneynews.newsmax.com/streettalk ... 91090.html

[winston]

Soros: Use IMF Funds to Salvage Climate Talks

The $10 billion a year proposed by rich nations to help the poor adapt to climate change is "not sufficient" and the gap between what's offered and what's needed could wreck the Copenhagen climate conference, American billionaire George Soros said Thursday.

The investor-philanthropist, one in a line of international notables visiting the 192-nation meeting, told reporters he had developed a partial solution.

Soros suggested shifting some International Monetary Fund resources from providing liquidity to stressed global financial system to a new mission of financing projects in developing countries for clean energy and adapting to climate change.

About $100 billion in a one-time infusion could be generated, said Soros, a major supporter of causes in the developing world.

But he acknowledging a major roadblock in Washington.

"It is possible to substantially increase the amount available to fight global warming in the developing world," he said. "All that is lacking is the political will. Unfortunately the political will will be difficult to gather because of the mere fact that it requires congressional approval in the United States."

Soros said he had "informal discussions" with Obama administration officials and they recognized the difficulty of getting congressional approval. But he said the issue was too important to sweep aside.

"I think it is already becoming apparent in the negotiations that there's a gap between the developed and developing world on this issue which could actually wreck the conference," he added.

Soros said the $10-billion-a-year short-term plan is "more than nothing, but not much, it's not sufficient."

He suggested climate financing be boosted with some $100 billion in Special Drawing Rights, the artificial "currency" of the International Monetary Fund, formulated as a basket of major currency values and held in reserve for lending in financial emergencies.

http://moneynews.newsmax.com/financenew ... 96933.html