The Day George Soros Broke the Bank of England to Make $1.1B (2021)(historyofyesterday.com)
historyofyesterday.com
The Day George Soros Broke the Bank of England to Make $1.1B (2021)
https://historyofyesterday.com/the-day-george-soros-broke-the-bank-of-england-to-make-1-1b-4834df0605d1?gi=9e38fbcf4733
181 comments
It's great to talk in terms of indices and devaluations and of "breaking the bank of England". The lives affected are not even spared an afterthought.
It's not like a currency devaluation affects everyone equally, or even uniformly negatively.
If you were a British factory worker, it might have saved your job because British exports became more competitive.
If you were a middle class office worker, it probably made life more inconvenient because imported goods became more expensive, and that Spanish vacation you had been planning might now be out of reach.
If you were a member of the upper class, your wealth was probably already well hedged against GBP risk by using offshore currency accounts, foreign stock investments, etc.
If you were a British factory worker, it might have saved your job because British exports became more competitive.
If you were a middle class office worker, it probably made life more inconvenient because imported goods became more expensive, and that Spanish vacation you had been planning might now be out of reach.
If you were a member of the upper class, your wealth was probably already well hedged against GBP risk by using offshore currency accounts, foreign stock investments, etc.
The Bank of England which was responsible for artificially pumping up the value of sterling is a more appropriate target for blame.
You might even say forcing the prices of things to be accurate and exposing departures from reality is the purpose of financial markets and the thing an investor gets paid for.
(How well that works is questionable; my completely amateur impression is that this view would force us to legalize insider trading while declaring HFT completely useless, for example.)
(How well that works is questionable; my completely amateur impression is that this view would force us to legalize insider trading while declaring HFT completely useless, for example.)
> declaring HFT completely useless, for example.
Please do ! The amount of resources invested in making HFT possible and profitable is no where close to being justified by the benefits it brings to society as a whole.
Making financial information move in days instead of week ? Sure !. In hours instead of days ? Yep !. In minutes instead of hours ? Why Not !. In seconds instead of minutes ? Mmmh yeah, I guess. In milliseconds instead of seconds ? Stop it. Opening a road to put high quality cables and hiring some of the most clever folks on the planet to cut half a milisec on a buy/sell algo ? Fuck you.
Please do ! The amount of resources invested in making HFT possible and profitable is no where close to being justified by the benefits it brings to society as a whole.
Making financial information move in days instead of week ? Sure !. In hours instead of days ? Yep !. In minutes instead of hours ? Why Not !. In seconds instead of minutes ? Mmmh yeah, I guess. In milliseconds instead of seconds ? Stop it. Opening a road to put high quality cables and hiring some of the most clever folks on the planet to cut half a milisec on a buy/sell algo ? Fuck you.
Are they? Spreads have tightened massively since the advent of HFT which has knock-on effects for the small investor both in terms of cheaper personal trading and lower costs for those managing their retirement/mutual funds (see Vanguard's opinion on HFT[1]).
In terms of resources, Virtu is publicly traded and has a market cap of 6.3bn, Citadel was recently valued at 22bn, the total sector is maybe 100bn. Meanwhile our society ascribes about 260bn of value to Coca Cola alone.
[1] https://www.ft.com/content/ff8c6486-cb37-11e3-ba95-00144feab...
In terms of resources, Virtu is publicly traded and has a market cap of 6.3bn, Citadel was recently valued at 22bn, the total sector is maybe 100bn. Meanwhile our society ascribes about 260bn of value to Coca Cola alone.
[1] https://www.ft.com/content/ff8c6486-cb37-11e3-ba95-00144feab...
Spreads may have tightened, but payments for order flow suggest to me there's a new flavor of front running involved via HFT and dark pools. But I'm no expert.
How? No offence but it just sounds like conspiratorial nonsense based on some scary sounding terms.
Payment for order flow is an example of the incentives of retail traders, retail brokers and HFT market makers aligning. The market makers are able (and obligated) to improve prices because they have paid to receive flow they are almost certain is not toxic. Meanwhile they charge the likes of hedge funds higher prices as they can't guarantee the reasoning behind their trades (i.e. they may be about to have their faces ripped off).
The HFT firm takes their (tightened) fee for making a market, kicks some back to the retail broker, and because the broker earns money that way, they offer commission-free trading to the retail trader.
Payment for order flow is an example of the incentives of retail traders, retail brokers and HFT market makers aligning. The market makers are able (and obligated) to improve prices because they have paid to receive flow they are almost certain is not toxic. Meanwhile they charge the likes of hedge funds higher prices as they can't guarantee the reasoning behind their trades (i.e. they may be about to have their faces ripped off).
The HFT firm takes their (tightened) fee for making a market, kicks some back to the retail broker, and because the broker earns money that way, they offer commission-free trading to the retail trader.
The book Flash Boys deals with this. It's a long time since I read it, but IIRC brokers need to split large orders and route them to different exchanges to get the best price (which is required under 'best-effort execution'). These orders will hit the exchanges at different times giving enough time for HFT to observe them at one exchange and front-run them at the other.
> The book Flash Boys
Is a hopelessly bad book. It's a thinly disguised advertisement for IEX.
> front-run
I do not think it means what you think it means.
Is a hopelessly bad book. It's a thinly disguised advertisement for IEX.
> front-run
I do not think it means what you think it means.
Most large orders won’t be retail traders though.
> No offence but it just sounds like conspiratorial nonsense based on some scary sounding terms.
It's exactly that.
It's exactly that.
Are you worried about getting front run for fractions of a cent? I’m not. I’d rather have penny wide spreads instead of 1/8 dollar (or larger) like the old minimum tick size.
Dark pools reduce volatility, it’s just liquidity outside of the normal order book. Regular people don’t need dark pools because they aren’t slinging $500M block trades. Furthermore, trades can happen off-exchange without dark pools.
It sounds like you aren’t even an amateur, let alone an expert, no offense.
Dark pools reduce volatility, it’s just liquidity outside of the normal order book. Regular people don’t need dark pools because they aren’t slinging $500M block trades. Furthermore, trades can happen off-exchange without dark pools.
It sounds like you aren’t even an amateur, let alone an expert, no offense.
> but payments for order flow suggest to me there's a new flavor of front running involved via HFT and dark pools.
I know what those words mean individually. But put together like that they make no sense.
I know what those words mean individually. But put together like that they make no sense.
Naw, cable is slow. Even if it's optical. Still slower than direct microwave connection via line-of-sight point-to-point systems.
Anyone doing fiber is doing the wrong technology, if they want to minimize total end-to-end latency.
Anyone doing fiber is doing the wrong technology, if they want to minimize total end-to-end latency.
It forces prices to be what people believe to be accurate, where that belief is strong enough for them to put down money on it. I think that may be the closest we're ever going to get.
The bit about belief above is why insider trading is illegal. If people can't trust the information they have, and at least importantly that they have fair access to accurate information, then they won't have faith in markets and won't put down their money. Belief implies trust.
The bit about belief above is why insider trading is illegal. If people can't trust the information they have, and at least importantly that they have fair access to accurate information, then they won't have faith in markets and won't put down their money. Belief implies trust.
I have bad news for you, insider trading isn't about fairness. People trade, legally, on inside information all the time. Adverse selection abounds in markets, so you have to be careful. Insider trading laws are rather about theft: did you illegally appropriate information owned by someone else to benefit yourself and/or a third party? That is insider trading. In the US, it can be even more relaxed than that, with the standard being you had intent.
> People trade, legally, on inside information all the time.
Example?
Example?
It may be a contrived definition of ‘insider information’ in an attempt to concoct a controversy. Like a company buying it’s own shares based on its internal knowledge of its condition, or employees buying share options in a scheme for their company. If it was actually an issue I expect it would have been stated instead of coyly implied. Its true not all market participants have access to the same information all the time. The point I made is that this can’t be so skewed or biased that it’s an obstacle to investment.
This is true.
Speculators play a vital role in stabilizing the price of a commodity over time. All other forms of arbitrage are meaningless besides the biggest one of them all: temporal arbitrage. Buy low sell high. And with it, sell high buy low.
Government employees, for instance for Codelco, Chile's state-owned mining corporation, value speculators because those speculations are the best predictions of the future. Suddenly you can make guarantees to your stakeholders, and sell futures, and plan, feed the prediction into your other math.
Also I'm not sure HFT is totally useless. If you set a minimum latency in the market and forbade anybody go around that you would get cheaters, and less integrity, and roll back trades. Instead, with HFT, the only challenge of the fastest is to really be the fastest. They gotta win. Further, at a societal level, I divine there are harmful macro artifacts that happen at large multiples of HFT's granularity. So when the latency was milliseconds, artifacts happened in years, in microseconds, they happened in days.
Speculators play a vital role in stabilizing the price of a commodity over time. All other forms of arbitrage are meaningless besides the biggest one of them all: temporal arbitrage. Buy low sell high. And with it, sell high buy low.
Government employees, for instance for Codelco, Chile's state-owned mining corporation, value speculators because those speculations are the best predictions of the future. Suddenly you can make guarantees to your stakeholders, and sell futures, and plan, feed the prediction into your other math.
Also I'm not sure HFT is totally useless. If you set a minimum latency in the market and forbade anybody go around that you would get cheaters, and less integrity, and roll back trades. Instead, with HFT, the only challenge of the fastest is to really be the fastest. They gotta win. Further, at a societal level, I divine there are harmful macro artifacts that happen at large multiples of HFT's granularity. So when the latency was milliseconds, artifacts happened in years, in microseconds, they happened in days.
It feels like a theory/practice problem.
If there were zero external costs to having a minimum-latency market, no big deal.
But we're still short of that. So there's a lot of money and brainpower being thrown into marginal decreases in market latency. Do we want so many of our best engineers chasing HFT performance?
It also creates a new ecosystem of arbitrage-- the guy with 20ms ping can take advantage of price differences the guy with 40ms can't-- which isn't necessarily producing real value.
This also assumes that the goal of absolute price discovery is itself meritorious. Maybe we're better off not being able to correctly value assets with infinite precision, because it tends to encourage the mindset of chopping up businesses for parts.
I'm a fan of the old-line conglomerate model. By bundling so many diverse assets, they inherently block price discovery, which creates openings where risk hedges and long term plays can survive and pay out. But investors hate being unable to pull those components out of the stock price.
If there were zero external costs to having a minimum-latency market, no big deal.
But we're still short of that. So there's a lot of money and brainpower being thrown into marginal decreases in market latency. Do we want so many of our best engineers chasing HFT performance?
It also creates a new ecosystem of arbitrage-- the guy with 20ms ping can take advantage of price differences the guy with 40ms can't-- which isn't necessarily producing real value.
This also assumes that the goal of absolute price discovery is itself meritorious. Maybe we're better off not being able to correctly value assets with infinite precision, because it tends to encourage the mindset of chopping up businesses for parts.
I'm a fan of the old-line conglomerate model. By bundling so many diverse assets, they inherently block price discovery, which creates openings where risk hedges and long term plays can survive and pay out. But investors hate being unable to pull those components out of the stock price.
I don't know that they actually are that competitive about marginal decreases in market latency. I think they're competitive for some stuff, but for others, it's easier to split the atom than split their eyelids. Literally.
Like I came up with a sorting algorithm I thought HFT--just some single monopolistic HFT company--would love, like die for. And I kept it so secret, did so much so nobody could hack it under any circumstances, never put it in an email, nothing, and? and? I sent it to over 40 FAANG and HFT equivalents and never heard back.
They really don't care about time, like really in real life. After the fact, yeah. Like when you're explaining to them why they lost money I guess. Not beforehand, when they could make money.
You're projecting about how competitive it actually is. Maybe if I actually split the eyelids first, then it would be competitive, but without that it is it is about as competitive as auctions for the best uranium mineral rights in the 1920's. Nobody gives a shit!
Like I came up with a sorting algorithm I thought HFT--just some single monopolistic HFT company--would love, like die for. And I kept it so secret, did so much so nobody could hack it under any circumstances, never put it in an email, nothing, and? and? I sent it to over 40 FAANG and HFT equivalents and never heard back.
They really don't care about time, like really in real life. After the fact, yeah. Like when you're explaining to them why they lost money I guess. Not beforehand, when they could make money.
You're projecting about how competitive it actually is. Maybe if I actually split the eyelids first, then it would be competitive, but without that it is it is about as competitive as auctions for the best uranium mineral rights in the 1920's. Nobody gives a shit!
The Bank of England did what it was told - the Conservative Government's were intent on maintaining Sterling within the European Exchange Rate Mechanism currency band (a precursor step to harmonizing currencies into what would become the Euro). This was what allowed Soros to endlessly short the pound.
Is that what actually happened in this case, though? (Not a rhetorical question, I honestly don't know).
I ask because the decision to short the pound was a coordinated attack among many powerful financial institutions. There is a reason collusion in other economic areas is illegal, precisely because it allows a "mispricing" to occur compared to what would happen if their were arms-length, fair competition.
Again, I have no idea if this is a valid criticism of Soros' trade, but the part of the article about him convincing other investors to go along with trade reminded me in a way of the agreement of SV companies not to poach each other's talent, which HN loves to decry as illegal collusion to depress wages.
I ask because the decision to short the pound was a coordinated attack among many powerful financial institutions. There is a reason collusion in other economic areas is illegal, precisely because it allows a "mispricing" to occur compared to what would happen if their were arms-length, fair competition.
Again, I have no idea if this is a valid criticism of Soros' trade, but the part of the article about him convincing other investors to go along with trade reminded me in a way of the agreement of SV companies not to poach each other's talent, which HN loves to decry as illegal collusion to depress wages.
They (UK govt at large) tried to keep the value of the Pound up, so that the UK could join the Eurozone, which was being constructed at that time. Large inflation started building up in the UK and there was not enough buy-in to do what's right (jack up the rates, cause a recession, clean the economy; like Volcker did in the US), so they eventually had to admit to their failure and let the Pound trade down.
The "insight" that Soros and others like him had was when would this happen. It's been known to be unstable for years, it was known to break eventually (unless rates go up, by a lot), the only question was when.
Also, this outcome was what "the people wanted". As I wrote above, there was not enough buy-in to jack up the rates and save the currency at the expense of jobs, so the opposite happened, jobs were saved at the expense of the currency. Low currency isn't necessarily bad - it's good for some people and bad for other people. In fact these days countries routinely accuse other countries of suppressing the value of their currency, to facilitate a desirable trade balance (China vs US, as an example; remember Trump's tariffs?).
The "insight" that Soros and others like him had was when would this happen. It's been known to be unstable for years, it was known to break eventually (unless rates go up, by a lot), the only question was when.
Also, this outcome was what "the people wanted". As I wrote above, there was not enough buy-in to jack up the rates and save the currency at the expense of jobs, so the opposite happened, jobs were saved at the expense of the currency. Low currency isn't necessarily bad - it's good for some people and bad for other people. In fact these days countries routinely accuse other countries of suppressing the value of their currency, to facilitate a desirable trade balance (China vs US, as an example; remember Trump's tariffs?).
>They (UK govt at large) tried to keep the value of the Pound up, so that the UK could join the Eurozone, which was being constructed at that time.
Didn't this prove beneficial to the UK in the long run?
The Guardian speculated in 2013 (<http://www.theguardian.com/business/economics-blog/2013/jun/...>) that if Britain had joined the Euro:
* The mid-2000s British housing bubble, and its collapse in 2007, would have been even bigger.
* Britain would have had to ask the IMF, ECB, and EU for loans.
* The Tories would in 2010 have promised a referendum to leave the Euro and won a majority. Labour would have won fewer than 100 seats, and UKIP would have "made spectacular gains".
* The anti-Euro side would have won the referendum, and the currency would have collapsed.
* "after a deep and painful recession economic recovery began".
* "Britain would have destroyed the euro on departure, and would now be on the point of leaving the EU altogether. The idea that Farage might be the next prime minister would be quite credible."
And the UK not being part of the ERM or Eurozone in no way disadvantaged London from becoming the continent's financial capital during the 1990s and later.
Didn't this prove beneficial to the UK in the long run?
The Guardian speculated in 2013 (<http://www.theguardian.com/business/economics-blog/2013/jun/...>) that if Britain had joined the Euro:
* The mid-2000s British housing bubble, and its collapse in 2007, would have been even bigger.
* Britain would have had to ask the IMF, ECB, and EU for loans.
* The Tories would in 2010 have promised a referendum to leave the Euro and won a majority. Labour would have won fewer than 100 seats, and UKIP would have "made spectacular gains".
* The anti-Euro side would have won the referendum, and the currency would have collapsed.
* "after a deep and painful recession economic recovery began".
* "Britain would have destroyed the euro on departure, and would now be on the point of leaving the EU altogether. The idea that Farage might be the next prime minister would be quite credible."
And the UK not being part of the ERM or Eurozone in no way disadvantaged London from becoming the continent's financial capital during the 1990s and later.
This is the kind of question that will still be debatable 100 years from now :)
It's similar to the hard currency question that sprung up as we (all countries really) detached from gold. It's still not really settled, cryptocurrency being the latest reincarnation.
It's similar to the hard currency question that sprung up as we (all countries really) detached from gold. It's still not really settled, cryptocurrency being the latest reincarnation.
Agreed.
It's basic game theory, understanding adversarial finance, and applying risk management practices at the sovereign state (central bank) level.
It does seem strange today to bet somewhere in the neighborhood of $7 ~ $8 billions, to only realize a capital gain of ~$1 billion, but it's actually a really impressive ~14% return.
The issue I suppose is where taking that adversarial position, and then being outspoken about the topic, in essence a variation of pump'n'dump for short sellers... proclaim the doom of the British sterling, and the doom becomes real via market awareness.... or, is "market awareness" really just market manipulation?
It's basic game theory, understanding adversarial finance, and applying risk management practices at the sovereign state (central bank) level.
It does seem strange today to bet somewhere in the neighborhood of $7 ~ $8 billions, to only realize a capital gain of ~$1 billion, but it's actually a really impressive ~14% return.
The issue I suppose is where taking that adversarial position, and then being outspoken about the topic, in essence a variation of pump'n'dump for short sellers... proclaim the doom of the British sterling, and the doom becomes real via market awareness.... or, is "market awareness" really just market manipulation?
Soros did not "break" something that was fine if left untouched. He realized that exchange rate was overvalued and acted on it. Resulted devaluation of GBP made British labour more competitive overnight and fixed the imbalance. Other European countries (like Finland) had similar problems at the same and were forced eventually to devalue without any coordinated attack.
When economies do not form an optimal currency area, tying currencies together with fixed rate creates all kinds of problems. Having floating exchange rate where central bank only "leans" to reduce volatility is usually the best course of action.
Eurozone is constantly battling against internal imbalances. Moving towards common fiscal policy is one way to fix them.
When economies do not form an optimal currency area, tying currencies together with fixed rate creates all kinds of problems. Having floating exchange rate where central bank only "leans" to reduce volatility is usually the best course of action.
Eurozone is constantly battling against internal imbalances. Moving towards common fiscal policy is one way to fix them.
Is the US an optimal currency area?
As much as I disagree with Soros on a lot of things, betting on a government being unable to manipulate it's currency forever, and succeeding on that bet is the government's fault, not Soros'.
It's 100% Soros's fault and he probably should have been jailed for it.
A nation was pursuing an economic policy towards harmonising their economy with that of another - a very nuanced process. Like two ships lining up so that one could supply the other.
That it makes an economy possibly more vulnerable to external issues (like a giant wave) is true, but it's a necessary condition that ostensibly has future benefits of economic alignment (i.e. ships being resupplied worth some risk).
Soros is a thief, a pirate, like any other - he came a long and created enormous risk, extracted billions into his fat pocket which would otherwise be in public coffers, and didn't create a dime in value for anyone, it's a zero sum game in which he ran off with riches learning everyone else poorer. It's cockroach capitalism of the worst kind.
A nation was pursuing an economic policy towards harmonising their economy with that of another - a very nuanced process. Like two ships lining up so that one could supply the other.
That it makes an economy possibly more vulnerable to external issues (like a giant wave) is true, but it's a necessary condition that ostensibly has future benefits of economic alignment (i.e. ships being resupplied worth some risk).
Soros is a thief, a pirate, like any other - he came a long and created enormous risk, extracted billions into his fat pocket which would otherwise be in public coffers, and didn't create a dime in value for anyone, it's a zero sum game in which he ran off with riches learning everyone else poorer. It's cockroach capitalism of the worst kind.
I've heard the same kind of blame leveled at the characters of the Big Short. But just as they didn't make banks give out bad loans, Soros didn't make the Bank of England put an unsustainable currency peg in place.
> The lives affected are not even spared an afterthought.
Such a simple, beautiful and powerful sentence. For some reason I instinctually read it in Morgan Freeman’s voice.
Such a simple, beautiful and powerful sentence. For some reason I instinctually read it in Morgan Freeman’s voice.
Thank you.
> The lives affected are not even spared an afterthought
Look at it from a software perspective: there was a huge vulnerability possible. If it hadn't been exploited by this person, someone else would have.
It was the Bank of England fault for not patching the exploit and creating the vulnerability.
Look at it from a software perspective: there was a huge vulnerability possible. If it hadn't been exploited by this person, someone else would have.
It was the Bank of England fault for not patching the exploit and creating the vulnerability.
It was your fault for not putting on a helmet and allowing me to hit you with a steel pipe and take your money.
See the problem? There's a reason it's illegal to exploit vulnerabilities in software. It's even illegal to exploit them in humans (mostly). It's called fraud.
See the problem? There's a reason it's illegal to exploit vulnerabilities in software. It's even illegal to exploit them in humans (mostly). It's called fraud.
In a world where there are people that will hit you with a steel pipe and will not be stopped by the legality of the matter then it is your fault for not putting on the helmet.
But that isn't a good comparison for this case as what he did was not illegal. Unlike hitting people with steel pipes.
But that isn't a good comparison for this case as what he did was not illegal. Unlike hitting people with steel pipes.
I appreciate the honesty and consistency at least of doubling down on blaming the victim.
Our pipe-wielding example will just find another victim without a helmet. You can always find something a victim could have done differently, the only common thread is the perpetrator.
Also legality isn't a proxy for morality. Slavery was illegal. Some societies allowed cannibalism. What Soros did had a human cost and the fact someone else might have done the same financial alchemy had he not doesn't excuse it.
Our pipe-wielding example will just find another victim without a helmet. You can always find something a victim could have done differently, the only common thread is the perpetrator.
Also legality isn't a proxy for morality. Slavery was illegal. Some societies allowed cannibalism. What Soros did had a human cost and the fact someone else might have done the same financial alchemy had he not doesn't excuse it.
The UK central bank was actively harming their economy with this nonsensical peg. Comparing trading an obviously overvalued currency to hitting someone with a pipe is similarly nonsensical. The government was not the victim here, but the perpetrator of the crime. Soros forced them to stop before the central bank could cause even more damage.
I never made a case for legality == morality. Also beware that morality isn't equally defined, what you find moral others will find amoral.
As for the pipe and helmet example. The laws and ways of upholding them are the metaphorical helmet that we put on to protect ourselves against pipe wielders.
The perpetrator will do what it wants to do, we can protect ourselves with laws, law enforcement, education or physical armour. Or do you expect the pipe wielder to stop because they were told what they are doing is bad or amoral?
As for the pipe and helmet example. The laws and ways of upholding them are the metaphorical helmet that we put on to protect ourselves against pipe wielders.
The perpetrator will do what it wants to do, we can protect ourselves with laws, law enforcement, education or physical armour. Or do you expect the pipe wielder to stop because they were told what they are doing is bad or amoral?
I can only be exploited by people with massive resources. There's not that many people or companies in existence. It's not the same as a software bug that can be exploited by any random hacker
Lots of society still relies on people behaing well overall with the few outliers being ostracized or outlawed when they don't.
Lots of society still relies on people behaing well overall with the few outliers being ostracized or outlawed when they don't.
> can only be exploited by people with massive resources
Not true. Unrealistic pegs paired with reams of floating-rate debt always break. See the Asian and Russian Financial Crises [1][2].
We discuss those as financial crises, not a man breaking a central bank, because they (a) don’t have a narratively-convenient antagonist and (b) aren’t Western central banks.
[1] https://www.britannica.com/event/Asian-financial-crisis
[2] https://en.m.wikipedia.org/wiki/1998_Russian_financial_crisi...
Not true. Unrealistic pegs paired with reams of floating-rate debt always break. See the Asian and Russian Financial Crises [1][2].
We discuss those as financial crises, not a man breaking a central bank, because they (a) don’t have a narratively-convenient antagonist and (b) aren’t Western central banks.
[1] https://www.britannica.com/event/Asian-financial-crisis
[2] https://en.m.wikipedia.org/wiki/1998_Russian_financial_crisi...
Exactly. It would be great to live in a world without shit-heads, but shit-heads exist and so systems shouldn't be designed for benign actors only.
“If it hadn’t been exploited by this person, someone else would have”
I’ve only ever heard this line of reasoning used to justify something unethical.
And in the case of software, we don’t admire the black-hat hackers that take advantage of exploits, do we? In fact, in that case it’s not even legal…
I’ve only ever heard this line of reasoning used to justify something unethical.
And in the case of software, we don’t admire the black-hat hackers that take advantage of exploits, do we? In fact, in that case it’s not even legal…
> I’ve only ever heard this line of reasoning used to justify something unethical.
That doesn't mean it's not true. Soros's actions ending the peg helped the british people, whose government was throwing away billions of pounds trying to sustain the unsustainable peg.
That doesn't mean it's not true. Soros's actions ending the peg helped the british people, whose government was throwing away billions of pounds trying to sustain the unsustainable peg.
Perhaps the outcome was better for Britain in the end, but I object to glorifying Soros on the grounds that his intentions were clearly to take money out of the system, and breaking the pound with a coordinated attack just doesn’t seem very ethical.
I also think that when people characterize moves like this as ‘brilliant’ it does a disservice to the word. I think many folks, if they tuned their attention to opportunities like this, had the big name firms in their Rolodex, and had questionable ethics, could have made this move. Maybe I’m missing it, but this seems like a pretty straightforward way to take advantage of the system.
I also think that when people characterize moves like this as ‘brilliant’ it does a disservice to the word. I think many folks, if they tuned their attention to opportunities like this, had the big name firms in their Rolodex, and had questionable ethics, could have made this move. Maybe I’m missing it, but this seems like a pretty straightforward way to take advantage of the system.
I really don't think intentions matter when contemplating moral questions, outcomes matter. Every economist was saying the peg would be broken, yet the bank of england was committed to throwing away money trying to save it. Every day they continued the british people were worse off. Soros was a hero in this story for being the person who convinced the bank of england to end their fools errand.
That's begging the question. Clearly someone thought that Britain would be better off in the ERM at that rate, and clearly some economists thought the rate could be maintained
Even if I leave my front door unlocked it's not your prerogative to empty my house. The locked door is there to suggest that it's a immensely stupid idea. I cannot begin to imagine the self entitled bull, someone peddles to themselves, to justify corruption and greed at this level.
It's not an unlocked door situation and it wasn't illegal. It's more akin to you betting on the wrong horse and being mad at the other guy who bet on the right one for losing your money when it's your fault for gambling instead of doing something else.
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It wasn’t just a horse bet by my reading of the article. It was more like they noticed that there was an opportunity to hobble a horse if you and your buddies rush the field and that the odds makers were not anticipating this so you bet otherwise.
You can marvel at the technical ingenuity of a heist like this but the ethics are dubious. The strongest counter is that the Bank of England wasn’t paying attention but that’s mildly victim claiming just like it would be if a company fell prey to a novel 0-day software exploit.
You can marvel at the technical ingenuity of a heist like this but the ethics are dubious. The strongest counter is that the Bank of England wasn’t paying attention but that’s mildly victim claiming just like it would be if a company fell prey to a novel 0-day software exploit.
When you go to buy or sell something, do you inform the seller or buyer that they are incorrectly pricing the product/service they are selling?
Do you let your counterparty know that you are willing to pay or sell at a price that is more beneficial to them?
Do you let your counterparty know that you are willing to pay or sell at a price that is more beneficial to them?
They already knew, by my reading. Bankers knew there was a bubble which is why it wasn't just Soros. He convinced quite a few banks and investors to help him in this scheme (and make quite a bit of cash as well) in order to pull it off. From the article:
- George Soros and all the funds and banks that participated in this large-scale attack were then able to repay the loans they had taken out in sterling, but with a devalued pound against the US dollar -
He was just the "ring leader", as it were. To date, no one had been able to coalesce all the necessary players into a single room and get them on the same page before in order to pull off such a thing. He was a proverbial shepherd corralling a bag of cats in order to make this scheme work.
Callous and greedy, sure. Intelligent and legal all the same. Blame the law makers for this one if you don't like the outcome. Their shortsightedness and allowances of quick, speculative, money-making bubbles to prop up fraudulent banking systems had a lot to do with this.
- George Soros and all the funds and banks that participated in this large-scale attack were then able to repay the loans they had taken out in sterling, but with a devalued pound against the US dollar -
He was just the "ring leader", as it were. To date, no one had been able to coalesce all the necessary players into a single room and get them on the same page before in order to pull off such a thing. He was a proverbial shepherd corralling a bag of cats in order to make this scheme work.
Callous and greedy, sure. Intelligent and legal all the same. Blame the law makers for this one if you don't like the outcome. Their shortsightedness and allowances of quick, speculative, money-making bubbles to prop up fraudulent banking systems had a lot to do with this.
[deleted]
If I have to read "massive speculative attack" one more time... Almost every paragraph ends with this, and it takes 5 paragraphs just to start explaining what the attack was and how it worked.
This wouldn't pass high school English.
This wouldn't pass high school English.
This one might be better: https://priceonomics.com/the-trade-of-the-century-when-georg...
Probably helps with SEO.
No mention of Stanley Druckenmiller. See lines 482 - 544 in a speech given by Druckenmiller
https://gist.github.com/bluechoochoo/a034da52c64ac6fcb637
where he talks about his and Soros' respective roles in the infamous trade.
https://gist.github.com/bluechoochoo/a034da52c64ac6fcb637
where he talks about his and Soros' respective roles in the infamous trade.
In 1997, the UK Treasury estimated the cost of Black Wednesday at £3.14 billion, which was revised to £3.3 billion in 2005 [1].
[1] https://en.wikipedia.org/wiki/Black_Wednesday#:~:text=In%201...).
[1] https://en.wikipedia.org/wiki/Black_Wednesday#:~:text=In%201...).
> For many, it was obvious that the pound sterling was overvalued
> The Bank of England was finally forced to give up the fight a few hours after the attack, announcing its exit from the European monetary system with a devaluation of about 15%
Sounds like George Soros just fixed a disequilibrium? How is he the bad guy in this story?
> The Bank of England was finally forced to give up the fight a few hours after the attack, announcing its exit from the European monetary system with a devaluation of about 15%
Sounds like George Soros just fixed a disequilibrium? How is he the bad guy in this story?
> How is he the bad guy in this story?
He’s narratively identifiable. Soros didn’t individually break the BoE. Lots of people were in on the trade. But he did so massively, relative to his personal wealth and to the market, and publicly.
So he gets pinned. Had he not traded the peg would have still broken. We’d just discuss it like we do the Asian or Russian Financial Crises [1][2], which happened five years later. Unrealistic pegs that suffered runs. Not a man “breaking” a Western central bank.
[1] https://www.britannica.com/event/Asian-financial-crisis
[2] https://en.m.wikipedia.org/wiki/1998_Russian_financial_crisi...
He’s narratively identifiable. Soros didn’t individually break the BoE. Lots of people were in on the trade. But he did so massively, relative to his personal wealth and to the market, and publicly.
So he gets pinned. Had he not traded the peg would have still broken. We’d just discuss it like we do the Asian or Russian Financial Crises [1][2], which happened five years later. Unrealistic pegs that suffered runs. Not a man “breaking” a Western central bank.
[1] https://www.britannica.com/event/Asian-financial-crisis
[2] https://en.m.wikipedia.org/wiki/1998_Russian_financial_crisi...
I think there's a knee-jerk reaction to short-sellers or actions like this because they cause loss of value for a mass of people. I, frankly, don't understand it. Those ultimately responsible are the entities that pumped up a bubble in the first place. Shooting the messenger who is effectively saying "this valuation is unreasonable" is counterproductive. It's like blaming the guy who brings a scam to your attention instead of the scammer.
And to be clear, I'm not saying that short-selling is inherently virtuous. It's a speculative activity like any other in our financial system. But it doesn't make sense that speculation (or even market manipulation) which increases an asset's value is often seen as ok, while the opposite is not.
Edit: Here's a good example - the current Canadian Real Estate Bubble[1]. I wish someone would pop this thing. It's already so big that it's going to hurt a lot of people. The government seems unwilling to do much to restrain it, especially since the pandemic, and as it gets bigger the potential fallout only increases. But I'm willing to bet that if some singular investor/regulator triggers an unwinding they will be blamed for all the consequences. Not the 20 years of policies and decisions that led to the bubble getting this large in the first place.
[1] https://en.wikipedia.org/wiki/Canadian_property_bubble
And to be clear, I'm not saying that short-selling is inherently virtuous. It's a speculative activity like any other in our financial system. But it doesn't make sense that speculation (or even market manipulation) which increases an asset's value is often seen as ok, while the opposite is not.
Edit: Here's a good example - the current Canadian Real Estate Bubble[1]. I wish someone would pop this thing. It's already so big that it's going to hurt a lot of people. The government seems unwilling to do much to restrain it, especially since the pandemic, and as it gets bigger the potential fallout only increases. But I'm willing to bet that if some singular investor/regulator triggers an unwinding they will be blamed for all the consequences. Not the 20 years of policies and decisions that led to the bubble getting this large in the first place.
[1] https://en.wikipedia.org/wiki/Canadian_property_bubble
On a related note, I wonder why glorified investors like Michael Burry aren’t instead demonized for contributing to, and profiting from, the near collapse of the American economy in 2008 (obviously it’s not Burry’s fault that banks gave out shit mortgages, nor is it Soros’ fault that the pound sterling was overvalued. They both took large positions to profit off these events as economies crashed)
>On a related note, I wonder why glorified investors like Michael Burry aren’t instead demonized for contributing to, and profiting from, the near collapse of the American economy in 2008
I think it's the scale. Soros was in 1992 already a billionaire, I believe, and was very, very famous on Wall Street. Burry is a medical doctor who fell into running a small (by Wall Street standards) hedge fund because his personal investing was so successful. While he made a lot of money, had Burry had Soros's resources in 2007-2008 he might have made far, far, far more.
To put another way, had Soros, not Burry, been the public face of those who saw the 2008 crash coming and invested accordingly, he would have received a lot more criticism.
I think it's the scale. Soros was in 1992 already a billionaire, I believe, and was very, very famous on Wall Street. Burry is a medical doctor who fell into running a small (by Wall Street standards) hedge fund because his personal investing was so successful. While he made a lot of money, had Burry had Soros's resources in 2007-2008 he might have made far, far, far more.
To put another way, had Soros, not Burry, been the public face of those who saw the 2008 crash coming and invested accordingly, he would have received a lot more criticism.
Because Burry et al helped collapse it sooner and softer, and their profits came from the banks’ losses.
> Because Burry et al helped collapse it sooner and softer
Could you not make the same argument for Soros?
> their profits came from the banks’ losses.
Where do you think that money came from?
When mortgages go bad, the banks foreclose the property and sell it.
When the banks go bad, the government props them up (in 2008) by buying their toxic assets
The sale of those toxic assets let banks cover their bad positions, including those with Burry
Burrys profit came from foreclosures and the American government (in the narrative sense that Soros’ money came from the people of England)
Which again begs the question of why Soros is the villain and not also Burry
Could you not make the same argument for Soros?
> their profits came from the banks’ losses.
Where do you think that money came from?
When mortgages go bad, the banks foreclose the property and sell it.
When the banks go bad, the government props them up (in 2008) by buying their toxic assets
The sale of those toxic assets let banks cover their bad positions, including those with Burry
Burrys profit came from foreclosures and the American government (in the narrative sense that Soros’ money came from the people of England)
Which again begs the question of why Soros is the villain and not also Burry
[deleted]
I've seen people make comments critical of Burry and others. I don't understand this mindset myself.
He's the bad guy of the story because he's a billionaire who made a $1.1Gb at the expense of the ordinary people living in the UK at the time. He forced mortgage rates, for example, to shoot up to 15%, with crippling monthly payments for a large chunk of the population.
Note that the article author is a cryptocurrency cultist, so he'll be all in favour of unscrupulous people enriching themselves at the expense of others irrespective of the negative effects this might have on society or the environment or whatever.
Note that the article author is a cryptocurrency cultist, so he'll be all in favour of unscrupulous people enriching themselves at the expense of others irrespective of the negative effects this might have on society or the environment or whatever.
> He forced mortgage rates, for example, to shoot up to 15%, with crippling monthly payments for a large chunk of the population.
Does British monetary policy not get some blame, here?
It was a sudden shock because they were putting their foot on the scale for quite some time.
Does British monetary policy not get some blame, here?
It was a sudden shock because they were putting their foot on the scale for quite some time.
The ERM was Major's big idea, most of his ministers didn't like it. The fact that they still went along with it is unimaginable in British politics today.
Although the market's should not be worshipped, this is probably a good example of why you shouldn't be too ardent in your nudging of them for political reasons.
Although the market's should not be worshipped, this is probably a good example of why you shouldn't be too ardent in your nudging of them for political reasons.
Another commenter mentioned this was part of the process to standardizing the UK on the Euro.
> He forced mortgage rates, for example, to shoot up to 15%, with crippling monthly payments for a large chunk of the population.
While this may be true, it is entirely the fault of the dumb UK mortgage market that does not provide for fixed-rate mortgages for the full term of the loan. In the US, 30 year fixed rates are the norm. In the UK you’re lucky to get 5 years fixed.
While this may be true, it is entirely the fault of the dumb UK mortgage market that does not provide for fixed-rate mortgages for the full term of the loan. In the US, 30 year fixed rates are the norm. In the UK you’re lucky to get 5 years fixed.
> While this may be true, it is entirely the fault of the dumb UK mortgage market
How would raising interest rates affect spending in the short/medium term if loans are all fixed for 30 years?
I guess maybe the property market is more volatile in the US as a result of this since who would take on a 30 year mortgage when rates are above their long-term average? In the UK, if you're on a high rate (but a short contract), you can at least look forward to when interest rates fall.
How would raising interest rates affect spending in the short/medium term if loans are all fixed for 30 years?
I guess maybe the property market is more volatile in the US as a result of this since who would take on a 30 year mortgage when rates are above their long-term average? In the UK, if you're on a high rate (but a short contract), you can at least look forward to when interest rates fall.
The way it works where i live, at least, is on all loans the principal can be paid in full with no penalty. So I get a 30 year fixed loan and when a better rate becomes available I can get a new loan and pay off the old one. The down side is transaction costs, things are getting more efficient but the owner will have to pay something to refinance the loan.
> In the UK, if you're on a high rate (but a short contract), you can at least look forward to when interest rates fall.
At the cost of never being able to predict your monthly outgoings in the face of turbulent financial markets.
At the cost of never being able to predict your monthly outgoings in the face of turbulent financial markets.
Without him, all of the quoted effects would not have happened, right? It actually took his direct action to catalyze those events into the stated negative outcomes. So how is it not at least partially (though actually mostly) his fault? If someone kills someone else, do you blame the murderer's mom for his existence, or Walmart for selling the knife, or do you blame the murderer for doing the stabbing?
> While this may be true, it is entirely the fault of the dumb UK mortgage market that does not provide for fixed-rate mortgages for the full term of the loan. In the US, 30 year fixed rates are the norm.
That's not an effect of the market; American 30-year fixed-rate mortgages reflect intense government involvement.
That's not an effect of the market; American 30-year fixed-rate mortgages reflect intense government involvement.
Anyone who thinks the British government is not involved in the UK mortgage market is not paying attention.
Did you mean to reply to someone else?
Interesting. In Canada you can only get up to 5 years fixed typically. Mortgage itself is 25 years but terms change every 5 usually. 30y fixed feels... Crazy. How much above market does it have to be for banks to take that risk??
The banks don't take the risk of offering such long-term fixed rates. The US government does through Fannie Mae and Freddie Mac, effectively subsidising the mortgage market. Other countries don't do this and don't have the same kind of long-term fixed mortgages as a result.
> The US government does through Fannie Mae and Freddie Mac, effectively subsidising the mortgage market.
For so-called "conforming" loans (647k USD this year), the equivalent of which would be enough to buy a nice house almost anywhere in the UK except London, the nicer parts of the Home Counties or the South West.
For so-called "conforming" loans (647k USD this year), the equivalent of which would be enough to buy a nice house almost anywhere in the UK except London, the nicer parts of the Home Counties or the South West.
Geebus. How did I never pick up on that juicy tidbit during 2008 coverage.
That's both awesome and insane
That's both awesome and insane
People with a low risk profile today get 2-4% fixed rate. What’s it like in Canada?
Similar. But not for 30 freakin years - we all know rates will shoot up!
[deleted]
It's an effective regressive tax where lower income earners subsidise middle and high income earners. Is that what you're arguing for?
Wouldn't Soros argue that all he did was accelerate their leaving of an already increasingly strained ERM?
The ministers in charge didn't want to be in the ERM, it was all Major.
The ministers in charge didn't want to be in the ERM, it was all Major.
He didn't do it to 'fix a disequilibrium', he ruthlessly exploited an opportunity for personal gain at the expense of an entire country. You can argue about the positive long term consequences, or the responsibility of the people that created the situation, but he is most definitely 'a' bad guy.
Absolutely not. In fact, I'd say Soros is a hero in this story. It was not ending the peg that cost the british people, but creating it. The bank of england was throwing away billions of dollars trying to sustain a peg that was never sustainable. Soros' actions convinced the bank to give up and stop wasting the peoples money.
By causing a recession? Money in the banking system isn't owned by the banks, it comes from the general public.
The UK was already in recession by time. Soros most definitely did not cause it. The British economy rebounded sharply afterwards, helped at least in part by the fact that British labour was suddenly more price competitive.
> that British labour was suddenly more price competitive
That seems to translate to "workers were getting paid less and their savings were devalued" to me. Am I mistaken?
That seems to translate to "workers were getting paid less and their savings were devalued" to me. Am I mistaken?
Another way to translate it would be “the cost of British labour was reduced, pushing down the artificially high unemployment rate,” but the best way would probably be both of the above at the same time, and some other more complicated stuff I don’t know or understand. My point isn’t this was actually a really good thing, but it’s not as straightforward as you’re making it out to be.
> That seems to translate to "workers were getting paid less and their savings were devalued" to me. Am I mistaken?
Sure, that's one way to look at it. But then you have to ask yourself why countries deliberately try to devalue their currencies and why other countries get mad when that happens.
Sure, that's one way to look at it. But then you have to ask yourself why countries deliberately try to devalue their currencies and why other countries get mad when that happens.
I don't know, why would workers whose compensation has been effectively cut be mad at some billionaire who did it to make more billions?
This isn't just about countries as an abstract. It's about the people and the impact on them.
This isn't just about countries as an abstract. It's about the people and the impact on them.
> whose compensation has been effectively cut
Black Wednesday happened in 1992. In 1991 inflation in the UK was 7.46%, in 1992 it dropped to 4.59% and in 1993 to 2.56%. So, who was really responsible for reducing the purchasing power of British workers? Soros or the BoE?
Black Wednesday happened in 1992. In 1991 inflation in the UK was 7.46%, in 1992 it dropped to 4.59% and in 1993 to 2.56%. So, who was really responsible for reducing the purchasing power of British workers? Soros or the BoE?
He's done plenty of bad stuff before and since.
Such as?
Funding this lot for a start: https://nypost.com/2021/12/16/how-george-soros-funded-progre...
Ah yes, how nefarious - openly funding candidates that favor criminal justice reform to lower the prison population. Very 'bad'.
>>Ah, yes, funding DAs that let people out on cash-free bail so they can continue committing crimes that the people who donate aren't affected by because they are living a privileged life.
Fixed that for you.
Fixed that for you.
I'd love to hear a moral argument for having two people arrested for the same crime and keeping one of them in pre-trial detention because they can't afford the bond, but letting the other one out because they have access to $1k.
I don't know about moral arguments, but there is certainly a practical one for having 50% less potential criminals on the street.
Appeared in multiple deranged conspiracy theories.
Well, the answer I was going to give was "he's Jewish^H^H^H^H^H^Han international globalist financier", but that's the same thing really.
There is plenty of hate for the Koch Brothers, and they are Jewish too. It's just fashionable to hate a billionaire who finances "the other side" imo. And it's hard to deny Soros is very politically active with his money, probably more so than your average billionaire, just like the Koch brothers are.
The Koch brothers aren't Jewish... That would have been an awkward meeting when their father went to Hamburg to meet Hitler to build an oil refinery. They don't practice but were loosely affiliated with the Catholic church for a time.
Oh wow, you are absolutely right. I don't know how I made that mistake, but I think I got confused with Sheldon Andelson as I saw him on the news due to his recent passing (the cheering by some people is probably what made me see some parallels with the George soros obsession).
To be fair, it's hard to keep up with all of America's billionaires!
To be fair, it's hard to keep up with all of America's billionaires!
That's more like being the target or victim rather than being the bad guy.
I do not specially like or dislike Soros but do not think he is part of any conspiracy other than being an oligarch.
I do not specially like or dislike Soros but do not think he is part of any conspiracy other than being an oligarch.
> other than being an oligarch.
How on earth is Soros an oligarch?
How on earth is Soros an oligarch?
Neoliberals today are trying that on as a term for anyone who they believe is too rich after seeing how it’s been used to demonize the Russian upper class (who in most cases are oligarchs).
As usual the actual meaning of word doesn’t matter, they’re after the feeling the word evokes.
As usual the actual meaning of word doesn’t matter, they’re after the feeling the word evokes.
Soros in his own head: Enlightened Capitalist who is using his financial might to create an Open Society™ where progressive values are wholeheartedly embraced
Soros in the heads of lunatics: Big Bad Scary Commie looking to make the capitalist system eat itself so he can usher in a new Global Soviet Socialist Republic with an army of third-world refugees - specifically the scary[0] ones with brown skin or poor English skills - to play the role of Randian moocher class
Soros in reality: Rich banker idiot who made billions of dollars ensuring the UK will never be able to join the Euro while throwing millions of it (0.1%) at random vaguely left-of-center causes to buy the secular equivalent of indulgences[1]
[0] fnord fnord fnord
[1] https://en.wikipedia.org/wiki/Indulgence#Late_Medieval_usage
Soros in the heads of lunatics: Big Bad Scary Commie looking to make the capitalist system eat itself so he can usher in a new Global Soviet Socialist Republic with an army of third-world refugees - specifically the scary[0] ones with brown skin or poor English skills - to play the role of Randian moocher class
Soros in reality: Rich banker idiot who made billions of dollars ensuring the UK will never be able to join the Euro while throwing millions of it (0.1%) at random vaguely left-of-center causes to buy the secular equivalent of indulgences[1]
[0] fnord fnord fnord
[1] https://en.wikipedia.org/wiki/Indulgence#Late_Medieval_usage
In part because right wing media don't want to blame John Major & left wing media don't want to support a billionaire.
I don't think right wing media hold a particular candle for John Major.
He's the boogey man to a large portion of society. He makes the left look slightly bad so any chance to showcase he's just an evil capitalist that steals grandmas money rockets to the top of HN.
Russia doesn't like him because he has been active in encouraging Ukraine's adhesion to the West. The amount of Soros Bad narrative since then (2015) has increased a lot.
if this hadn't happened then the UK would have joined the euro
brexit under the euro would have been all but impossible
I wonder if Soros regrets "breaking the bank", especially given he was a huge remain supporter (donating vast amounts to the campaign)
brexit under the euro would have been all but impossible
I wonder if Soros regrets "breaking the bank", especially given he was a huge remain supporter (donating vast amounts to the campaign)
Yeah, if not for this there's a good chance the UK would be part of the Euro and much more closely tied to the EU. I doubt this would've worked out well overall for the country though; there were other European countries which had similar issues maintaining their exchange rate and the underlying economic mismatches continued to cause economic crises once they joined the Euro.
Short sellers don't strike me as the type who regret doing something that made them a billion dollars.
>if this hadn't happened then the UK would have joined the euro
>brexit under the euro would have been all but impossible
Not necessarily. The Guardian speculated in 2013 (<http://www.theguardian.com/business/economics-blog/2013/jun/...>) that if Britain had joined the Euro:
* The mid-2000s British housing bubble, and its collapse in 2007, would have been even bigger.
* Britain would have had to ask the IMF, ECB, and EU for loans.
* The Tories would in 2010 have promised a referendum to leave the Euro and won a majority. Labour would have won fewer than 100 seats, and UKIP would have "made spectacular gains".
* The anti-Euro side would have won the referendum, and the currency would have collapsed.
* "after a deep and painful recession economic recovery began".
* "Britain would have destroyed the euro on departure, and would now be on the point of leaving the EU altogether. The idea that Farage might be the next prime minister would be quite credible."
>brexit under the euro would have been all but impossible
Not necessarily. The Guardian speculated in 2013 (<http://www.theguardian.com/business/economics-blog/2013/jun/...>) that if Britain had joined the Euro:
* The mid-2000s British housing bubble, and its collapse in 2007, would have been even bigger.
* Britain would have had to ask the IMF, ECB, and EU for loans.
* The Tories would in 2010 have promised a referendum to leave the Euro and won a majority. Labour would have won fewer than 100 seats, and UKIP would have "made spectacular gains".
* The anti-Euro side would have won the referendum, and the currency would have collapsed.
* "after a deep and painful recession economic recovery began".
* "Britain would have destroyed the euro on departure, and would now be on the point of leaving the EU altogether. The idea that Farage might be the next prime minister would be quite credible."
> if this hadn't happened then the UK would have joined the euro
Interesting. Any links?
Interesting. Any links?
that's what ERM1 was, fixing your exchange rate against the "European Currency Unit"
and 1 ECU became 1 euro on 1 January 1999
now that the euro exists: joining ERM (version 2) is phase 1 of joining the euro
and 1 ECU became 1 euro on 1 January 1999
now that the euro exists: joining ERM (version 2) is phase 1 of joining the euro
Wasn't technically the LPs who each made a fraction of that 1.1B while Soros and Druck got the 5 and 20 or whatever fees they charged them?
True but the story doesn't read as well when you put it that way.
I remember listening to the news on the radio that day, the government changed the interest rate twice, from 10% to 12% at about 11am and then a couple of hours later up to 15%
Related: "When George Soros Broke the British Pound (2014)"
https://news.ycombinator.com/item?id=21454383
Is there any chance someone could bet on the Swiss franc being undervalued to the extent it's central bank would have to accept a 1/1 parity with the euro... are there other similar cases of ("collusion") of individual entities that have outbet government policies to this or further extent?
An interesting and amusing take on it from Gyles Brandreth who was in the room on the UK government side of this https://youtu.be/dwRfVtdqfWY?t=85
If only every target had the wherewithal of the Porsche/Piech family which instead broke its shorters the world would be slightly a fairer place.
England, Thailand, Malaysia....
In Brazil the alt-right calls Soros a lefist billionare that finances communism around the world. Does this craziness exist in other places of the world?
He does finance political NGOs around the world, yes. Communism, definitely not.
Yes. It's a popular right-wing conspiracy theory here in the US, too. I've also had to disabuse several people of the notion that he was a Nazi.
The Day the Bank of England was caught in an artificial pumping scheme is way more accurate of a title. But I guess anything to smear Soros and the "left" gets upvoted to HN nowadays.
Connection being the authoritative right sees Soros as the analog to the Koch bros.... not quite understanding we don't like capitalists anymore than the right likes socialists. But hey Soros === bad, leftist === bad so to the top of HN it goes. (please prove me wrong)
Connection being the authoritative right sees Soros as the analog to the Koch bros.... not quite understanding we don't like capitalists anymore than the right likes socialists. But hey Soros === bad, leftist === bad so to the top of HN it goes. (please prove me wrong)
George Soros has been known as "The Man Who Broke The Bank of England" pretty much since it happened. It's a riff on a much earlier phrase, "the man who broke the bank at Monte Carlo", which has been around since the 19th century, referring to a gambler. It pre-dates the current right's antisemitic obsession with him by quite a long way, and I don't think it's been used as a pejorative term at all - more a mark of respect. But I could be wrong about that.
The confusion in this thread is that some people think "breaking the bank" is an insult to the breaker, because the bank is the "good guy".
It's a bit bizarre.
It's a bit bizarre.
I agree, I don't think I'd call Soros a leftist- a liberal, maybe. But leftist is wrong- he's a wealthy capitalist, and leftist thought generally involves anticapitalist views. In fact leftists generally view center liberals as their most effective enemies.
But yeah the right always tries to portray him as leftist to try to connect him with "antifa" as part of antisemitic conspiracy theories.
But yeah the right always tries to portray him as leftist to try to connect him with "antifa" as part of antisemitic conspiracy theories.
Terry_Roll(1)
The myth is about Soros, but it was a network of largely U.S. investment banks that co-ordinated and piled on to raid the BoE. Consider that the GameStonks craze where people just really, really liked the stock got threatened with charges of market manipulation, almost took out Robinhood, with contagion exposure to Citadel with system wide risk, and caused back door intervention by Fed authorities and even the Whitehouse - Soros' payday is evidence for Balzac's adage that behind every great fortune lies a great crime. I have no doubt what he did would be absolutely criminal today.
He went on to create the Open Society Foundations, which supported and co-ordinated aspects of the (then) progressive anti-globalization movement of the 90s I was involved in. At the time the movement was mostly anti-capitalist, uniting labor and civil society against (neo-liberal) trade agreements designed to exploit the poverty and authoritarianism of other countries and to hollow out western economies by exporting manufacturing jobs, and against exploitative policies by the IMF, who used loans to indebt and subordinate elected governments and force privatization and sale of their infrastructure to transnational corps and roll back environmental protection. (see, confessions of an economic hitman, nologo, etc.) Ostensibly noble causes.
It almost seemed like a billionaire's noblesse oblige. Soros was the "good capitalist." The movements themselves failed after 9/11, and Occupy was a whimper in comparison to the battles of Seattle, Quebec City, Turin, and others. The US rust belt was exported destroyed in the 90's and 2000s, laying the ground for the populist revolt that created 2015 election result. However, his OSF foundations and network of NGOs flourished, installing progressive activists from the era in colleges and political parties, and other key institutions.
Trouble is, these weren't working class labor organizers and anarcho-anti-capitalists, they were technocrats, equipped with an ideology whose specific endgame is central economic co-ordination, and it was nominally anti-capitalist in the sense that it is against the individualistic cultural aspects of smallholders and the autonomy and values small business provides, and that it uses critical theory as a tool to dissolve the bonds of societies. This is the kernel of truth beneath the layers of hallucinatory conspiracy theory.
To me, Soros is just a visionary criminal who learned about totalitarianism from the inside during his youth, and has funded his own vision of that technocratic system. That's not a conspiracy theory, that's just what any billionaire criminal with a will to power seeking to build a empire would do, and imo, he has.
He went on to create the Open Society Foundations, which supported and co-ordinated aspects of the (then) progressive anti-globalization movement of the 90s I was involved in. At the time the movement was mostly anti-capitalist, uniting labor and civil society against (neo-liberal) trade agreements designed to exploit the poverty and authoritarianism of other countries and to hollow out western economies by exporting manufacturing jobs, and against exploitative policies by the IMF, who used loans to indebt and subordinate elected governments and force privatization and sale of their infrastructure to transnational corps and roll back environmental protection. (see, confessions of an economic hitman, nologo, etc.) Ostensibly noble causes.
It almost seemed like a billionaire's noblesse oblige. Soros was the "good capitalist." The movements themselves failed after 9/11, and Occupy was a whimper in comparison to the battles of Seattle, Quebec City, Turin, and others. The US rust belt was exported destroyed in the 90's and 2000s, laying the ground for the populist revolt that created 2015 election result. However, his OSF foundations and network of NGOs flourished, installing progressive activists from the era in colleges and political parties, and other key institutions.
Trouble is, these weren't working class labor organizers and anarcho-anti-capitalists, they were technocrats, equipped with an ideology whose specific endgame is central economic co-ordination, and it was nominally anti-capitalist in the sense that it is against the individualistic cultural aspects of smallholders and the autonomy and values small business provides, and that it uses critical theory as a tool to dissolve the bonds of societies. This is the kernel of truth beneath the layers of hallucinatory conspiracy theory.
To me, Soros is just a visionary criminal who learned about totalitarianism from the inside during his youth, and has funded his own vision of that technocratic system. That's not a conspiracy theory, that's just what any billionaire criminal with a will to power seeking to build a empire would do, and imo, he has.
It's a bit silly to call someone "totalitarianist" when his whole career and wealth is from betting against bad governments and winning.
But if you equate "wealthy" with "totalitarian", you are too far gone to debate with.
But if you equate "wealthy" with "totalitarian", you are too far gone to debate with.
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Didn’t Soros study under Karl Popper? I wouldn’t say he learned totalitarianism from the inside, rather he was influenced by a very astute advisor on the nature of societal openness and the associated dynamics.
As far as being supposedly ‘evil’, I don’t see how anyone in his position could not be. Look at the world around us. We are ruled by psychopaths, shysters and ghouls at multiple levels; middle management to heads of state.
I’ve always had a chip on my shoulder about decency, humility and fairness, but the older I get and more money/power I accumulate, I’m starting to see that the monsters of the world will only be beaten by a bigger monster. So if I set out to right the wrongs I see, I too would necessarily need to become monstrous.
As far as being supposedly ‘evil’, I don’t see how anyone in his position could not be. Look at the world around us. We are ruled by psychopaths, shysters and ghouls at multiple levels; middle management to heads of state.
I’ve always had a chip on my shoulder about decency, humility and fairness, but the older I get and more money/power I accumulate, I’m starting to see that the monsters of the world will only be beaten by a bigger monster. So if I set out to right the wrongs I see, I too would necessarily need to become monstrous.
To be monsterous and justified, what a triumph of moral expedience. Soros experienced WWII as a teenager in Hungary(?) where growing up he saw the rise of the movements that would become NSDAP and Stalinsim, respectively. My view is that the most powerful thing he has ever experienced was that evil, but in seeing the power of them, he understood what was possible, and his intent is to use them for "good." Trouble is, you need the power to do good, but once you have the power, why do you need to be good?
I think what we now recite as Popper's paraphrase is just a cheap slogan for organizing banal minds, and not a model for reflection. My objection isn't to Popper and so-called open socieites, it's to the belief that the "problem," is the lack of a sophisticated plan with a system guided by ideology to run them in the first place. It's a technocratic presumption, that if we just come up with a system, we can impose it on reality and human desire, and we will "fix the problem."
What Popper has been used for (regardless of what he may have written), and the viral idea that critical theorists today have made that people fundamentally want was this very justification for their own monsterousness. This is the liberation they're offering. When you revisit the idea of being a victim or being oppressed as just an infinite will to power, moralized by an ideology designed to dissolve truth and inconvenient perceptions of reality, it's pretty obvious that the OSF and its appendant bodies in the WEF and other networks are just recycled totalitarian junk from a new generation of demagogues.
Maybe I'm wrong. Maybe a bunch of billionaires and bureaucrats have had Damascene conversions and are really just self sacrificing martyrs and saints.
I think what we now recite as Popper's paraphrase is just a cheap slogan for organizing banal minds, and not a model for reflection. My objection isn't to Popper and so-called open socieites, it's to the belief that the "problem," is the lack of a sophisticated plan with a system guided by ideology to run them in the first place. It's a technocratic presumption, that if we just come up with a system, we can impose it on reality and human desire, and we will "fix the problem."
What Popper has been used for (regardless of what he may have written), and the viral idea that critical theorists today have made that people fundamentally want was this very justification for their own monsterousness. This is the liberation they're offering. When you revisit the idea of being a victim or being oppressed as just an infinite will to power, moralized by an ideology designed to dissolve truth and inconvenient perceptions of reality, it's pretty obvious that the OSF and its appendant bodies in the WEF and other networks are just recycled totalitarian junk from a new generation of demagogues.
Maybe I'm wrong. Maybe a bunch of billionaires and bureaucrats have had Damascene conversions and are really just self sacrificing martyrs and saints.
If you believe that everyone is either evil or irrelevant, as you say, then why waste your time caring? You've proven that nothing matters.
How is protesrint against police brutality, and supporting Israel-Palestine peace activists, totalitarian?
How can you equate having nonzero will to power (resisting oppression) with infinite will to power? How can you claim that resisting rotalitarianism is equal to totalitarianism?
How is protesrint against police brutality, and supporting Israel-Palestine peace activists, totalitarian?
How can you equate having nonzero will to power (resisting oppression) with infinite will to power? How can you claim that resisting rotalitarianism is equal to totalitarianism?
My argument is that Soros' support for activists has primarily been a means to undermine the sovereignty of the nation state as a thing everywhere, and install technocrats with the aforementioned agenda to subordinate all of humanity. I am saying he experienced this from the Germans and Soviets, studied it as a mechanism, and now funds a movement with this aim in mind. Co-opting popular movements and using them as vehicles for this agenda is specifically what Arendt identified as the mechanism.
If you do some reading on the topic, the necessary condition of the technical term of totalitarianism, as distinct from say, mere authoritarian ideas like fascism or communism, is that it is a movement that uses the nation state as a host, but whose intent is the absorption of nation states into its system of control, and that its key tactic is the dissolution of truth as a means to atomize and liquidate the individual.
"Resisting oppression" requires first that you identify as oppressed, and if you are a Daniel Dennet reader and use his (flawed but useful) model of self as an example, this very identity is the effect of language and narrative. The aim of these movements (and initially of marxism) was to create an identity ("consciousness") relative to a percieved material oppressor - that's the heavy lift, or leap of faith, and once you've convinced someone they are a victim, you can convince them of anything, because they have accepted the core axiom of the rest of the ideology, and the demagogue becomes the source of narrative truth for that identity.
You don't need to enslave people when you can just convince them they are slaves who must do what you ask to become free. It's a simple begged question and low rent street hustle. This grand deception that underpins Marx's whole system is about as sophisticated as a predatory pimp persuading a target she owes him the money he's forcing her to work for, except instead of monetary debt, he's selling you an inferior identity that you can redeem yourself by organizing and following some political huckster.
So, what do you think is more likely, that a few activists are enlightened and the rest of us live under a false consciousness of oppressive supremacy, or that a minority with an infinite will to power are selling a snake oil pseudo religion and they're no better than any other televangelists and demagogues?
Soros has not resisted totalitarianism at all, he has funded and co-opted movements against nation states as a means to subordinate and dissolve them.
If you do some reading on the topic, the necessary condition of the technical term of totalitarianism, as distinct from say, mere authoritarian ideas like fascism or communism, is that it is a movement that uses the nation state as a host, but whose intent is the absorption of nation states into its system of control, and that its key tactic is the dissolution of truth as a means to atomize and liquidate the individual.
"Resisting oppression" requires first that you identify as oppressed, and if you are a Daniel Dennet reader and use his (flawed but useful) model of self as an example, this very identity is the effect of language and narrative. The aim of these movements (and initially of marxism) was to create an identity ("consciousness") relative to a percieved material oppressor - that's the heavy lift, or leap of faith, and once you've convinced someone they are a victim, you can convince them of anything, because they have accepted the core axiom of the rest of the ideology, and the demagogue becomes the source of narrative truth for that identity.
You don't need to enslave people when you can just convince them they are slaves who must do what you ask to become free. It's a simple begged question and low rent street hustle. This grand deception that underpins Marx's whole system is about as sophisticated as a predatory pimp persuading a target she owes him the money he's forcing her to work for, except instead of monetary debt, he's selling you an inferior identity that you can redeem yourself by organizing and following some political huckster.
So, what do you think is more likely, that a few activists are enlightened and the rest of us live under a false consciousness of oppressive supremacy, or that a minority with an infinite will to power are selling a snake oil pseudo religion and they're no better than any other televangelists and demagogues?
Soros has not resisted totalitarianism at all, he has funded and co-opted movements against nation states as a means to subordinate and dissolve them.
"I am there to make money; I cannot and do not look at the social consequences of what I do" - George Soros
Someone who explicitly says that as a teenager, he enjoyed his time working for the Nazis while they were looting those targeted, is not going to be shamed over taking $1 billion in a trade.
See: https://www.youtube.com/watch?v=SGWizajL7tA compilation of clips from 60 Minutes interviews, etc. (from 3m45s he talks about his time helping to confiscate property from Hungarian Jews)
Someone who explicitly says that as a teenager, he enjoyed his time working for the Nazis while they were looting those targeted, is not going to be shamed over taking $1 billion in a trade.
See: https://www.youtube.com/watch?v=SGWizajL7tA compilation of clips from 60 Minutes interviews, etc. (from 3m45s he talks about his time helping to confiscate property from Hungarian Jews)
Wikipedia: Tivadar [his father] saved not only his immediate family but also many other Hungarian Jews, and Soros later wrote that 1944 had been "the happiest [year] of his life," for it had given him the opportunity to witness his father's heroism.[
Stop lying.
Stop lying.
The idea that Soros, who was a 13-year old Hungarian Jew pretending to be christian as to not be murdered by the Nazis, somehow was sympathetic to the nazis is one of the laziest attempts at smearing someone I can remember.
The accusation is not that he sympathized with the Nazis. Quite the contrary, the accusation is that he has no sympathy for anyone. The accusation is that his worldview, was (and is) that he is responsible only for himself and he has no effect on affairs because if he didn't do [whatever] someone else would. He claims, on essence, that the events of the world is an unchangeable script, and the only control we have is which role we play. For an expert in markets, he claims stunning ignorance of the concept of marginal effects, and a non-stunning awareness of how to profit from amorality.
I had thought poorly of George Soros based on other people's words, before reading all of the comments written thus far in this thread. Watching the video you linked, cemented my notion that Goeorge Soros is being treated as a scapegoat. Thank you for sharing the video, as I had never actually listened to him speak before.
In that video, he seems like a logical and emotional person who can keep emotions in their proper perspective. Everything is nuanced, and he can navigate it. It looks like he has a high emotional IQ and intelligence IQ.
Regarding the last segment of the video that contains an audio clip, it talks about personal development. Personal development can happen in terrible enviornments like the German occupation and Nazi confescation of Jewish assets. He was glad that he developed as opposed to not developing.
It's a little odd that he called it a happy time though, and I am disappointed that he does not believe in God, but that doesn't mean he should be made a scapegoat for unwinding of financial problems started by others.
In that video, he seems like a logical and emotional person who can keep emotions in their proper perspective. Everything is nuanced, and he can navigate it. It looks like he has a high emotional IQ and intelligence IQ.
Regarding the last segment of the video that contains an audio clip, it talks about personal development. Personal development can happen in terrible enviornments like the German occupation and Nazi confescation of Jewish assets. He was glad that he developed as opposed to not developing.
It's a little odd that he called it a happy time though, and I am disappointed that he does not believe in God, but that doesn't mean he should be made a scapegoat for unwinding of financial problems started by others.
He explicitly didn't say he was happy he developed. He said he was happy, and that happiness was possible because he was solipsistic and concerned only for his own position.
And how can you congratulate someone for being logical, high IQ/EQ while being disappointed that they don't believe in God, which is an illogical idea and emotional crutch?
And how can you congratulate someone for being logical, high IQ/EQ while being disappointed that they don't believe in God, which is an illogical idea and emotional crutch?
Do you mean, "He didn't explicitly say," otherwise how do you know what he was thinking if you assert, "He explicitly didn't say"? I didn't hear him say he was solipsistic either.
Being logical doesn't preclude someone from beleiving in a god, though it will probably preclude some beliefs or teachings of most organized religions.
(There are a few minor issues of the religion of which I am a part of, but religion is a man-made construct and thus inherently fallible. And I recognize that since there are multiple different religions, not all of them can be correct at the same time, and thus it's possible the one I am a part of is one of the incorrect ones.)
Believing in a god can be used as an emotional crutch by some people, but it does not mean it is always an emotional crutch for everyone that does believe in a god.
Many people have a problem of differentiating from what was actually said versus what they think someone meant. Sometimes I have a problem of understanding what was meant when people don't actually say what they mean. I think George Soros is a person who means exactly what he says.
Being logical doesn't preclude someone from beleiving in a god, though it will probably preclude some beliefs or teachings of most organized religions.
(There are a few minor issues of the religion of which I am a part of, but religion is a man-made construct and thus inherently fallible. And I recognize that since there are multiple different religions, not all of them can be correct at the same time, and thus it's possible the one I am a part of is one of the incorrect ones.)
Believing in a god can be used as an emotional crutch by some people, but it does not mean it is always an emotional crutch for everyone that does believe in a god.
Many people have a problem of differentiating from what was actually said versus what they think someone meant. Sometimes I have a problem of understanding what was meant when people don't actually say what they mean. I think George Soros is a person who means exactly what he says.
> Even better, Soros managed to convince other investors and investment banks (JP Morgan, Bank of America, Jones Investment, …) that the pound sterling would collapse in the event of a massive and coordinated attack.
I wonder how this wouod be judged with current "insider trading" laws, but since it is a foreign country (even if ally) then probably nothing would be done.
Also the article doesnt seem to mention that Bank of England could stop their losses and stop trying to save the pound.
I have a feeling that actions of central banks are poorly discussed - in many ways those banks seem to be a source of recession (UK, Japan) or method of transfer of wealth to the rich (quantitative easing... seriously it is just pure evil).
I wonder how this wouod be judged with current "insider trading" laws, but since it is a foreign country (even if ally) then probably nothing would be done.
Also the article doesnt seem to mention that Bank of England could stop their losses and stop trying to save the pound.
I have a feeling that actions of central banks are poorly discussed - in many ways those banks seem to be a source of recession (UK, Japan) or method of transfer of wealth to the rich (quantitative easing... seriously it is just pure evil).
But Soros and his allies were not using confidential information; they were not insiders. I am not a fan of this kind of thing at all, but insider trading laws aren't relevant.
As for your last point, yes, if the Bank of England had surrendered earlier they would have lost far less money and Soros and his allies would have made far less profit.
As for your last point, yes, if the Bank of England had surrendered earlier they would have lost far less money and Soros and his allies would have made far less profit.
> I have a feeling that actions of central banks are poorly discussed
You and I have very different definition of “poorly discussed”.
You and I have very different definition of “poorly discussed”.
Youtube videos with yellow comments dont count as great sources for me.
We still barely have any sources about what happened in Japan.
We still barely have any sources about what happened in Japan.
How is Soros an insider on British government policy?