[lbo-talk] Future of Demo Party?

Doug Henwood dhenwood at panix.com
Tue Jul 27 17:49:54 PDT 2004


Sean Sullivan wrote:


>Can someone point me in the right direction to find out how exactly
>Soros made his billions? "Financier" just isn't specific enough.
>I've been told he had a major part in the late nineties asian
>financial crisis...true?

Soros was one of the pioneers of the hedge fund - pools of speculative capital that move quickly, in & out of everything. I'm sure he had a hand in Asia, but I don't know what he does. His most famous trade was taking a position against the British pound in the early 1990s, and then writing a letter to the editor of The Times saying the currency was overvalued. He made over a billion pounds from the Bank of England. But the B of E was following a stupid policy, defending an overvalued pound, a value that was hammering British industry and exports. The currency had to collapse, and Soros didn't make it. He just got richer from it.

He's been in and out of a million things over what, 30 or 40 years. Despite his politics he's a god on Wall Street because he's made so much money. His underlying strategy, which he wrote up in quasi-Hegelese in his theoretical work the Alchemy of Finance, is to bet against extremes in psychology. That makes him, like Keynes, another of those liberals who gets rich betting against the mob.

Doug



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