One of his more famous events: Extreme leverage is a George Soros character trait. Most readers of the financial pages know about the spectacularly leveraged coup that earned him a billion dollars overnight in a giant gamble in 1992. He bet $10 billion – most of it borrowed money – that by selling enough sterling short he could force the Bank of England to devalue the British pound and make a killing.
Soros, with a keen grasp of money and politics, had calculated that bankers in the European Exchange Rate Mechanism (EERM), pegged to the German mark, would refuse to uphold the overvalued pound because at the time Germany had its own problems paying for reunification. Great Britain’s inflation was also much too high (triple the German rate), and British interest rates were hurting their asset prices.
The EERM did refuse, so Britain pulled out and tried to prop up its sinking currency by itself. Prime Minister John Major and Chancellor of the Exchequer Norman Lamont spent billions of the government’s foreign reserves buying back pounds, trying desperately to shore up the value of sterling in the face of the daunting speculative tsunami that Soros started.
They ran out of foreign reserves. Soros’s fund sold short more than $10 billion in pounds. The pound crashed, making Soros a profit of $1 billion. On September 16, 1992 – a day known thereafter as Black Wednesday – British subjects woke up to find their money worth about 20 percent less than the day before when compared to American dollars, German marks, or even French francs.
He didn't kill anyone. People do that on a smaller scale every day of the week. People have jobs betting on the currency markets. Nigel Farage is under suspicion of using inside knowledge of exit polls in the referendum to short the pound. Which is illegal, unlike the above.
Comments
People do that on a smaller scale every day of the week.
People have jobs betting on the currency markets.
Nigel Farage is under suspicion of using inside knowledge of exit polls in the referendum to short the pound. Which is illegal, unlike the above.
I still don't understand why you don't like him.