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The Day George Soros Broke the Bank of England to Make $1.1B (2021)

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Re: The Day George Soros Broke the Bank of England to Make $1.1B (2021)

#151

Post by TMWNN »

H8crilA wrote: post #106
hn_throwaway_99 wrote: post #79

Earlier quoted context omitted.

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…

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 "insig…

>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.

Re: The Day George Soros Broke the Bank of England to Make $1.1B (2021)

#152

Post by TMWNN »

blibble wrote: post #6

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)

>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."

Re: The Day George Soros Broke the Bank of England to Make $1.1B (2021)

#153

Post by TMWNN »

helen___keller wrote: post #39
AlexandrB wrote: post #12

Earlier quoted context omitted.

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 i…

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.

Re: The Day George Soros Broke the Bank of England to Make $1.1B (2021)

#154

Post by H8crilA »

TMWNN wrote: post #151
H8crilA wrote: post #106

Earlier quoted context omitted.

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 "insig…

>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 b…

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.

Re: The Day George Soros Broke the Bank of England to Make $1.1B (2021)

#155

Post by unmole »

noodles_nomore wrote: post #150
bidirectional wrote: post #127

Earlier quoted context omitted.

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…

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.

Re: The Day George Soros Broke the Bank of England to Make $1.1B (2021)

#156

Post by thaumasiotes »

jen20 wrote: post #143
thaumasiotes wrote: post #118

Earlier quoted context omitted.

> 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.

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?

Re: The Day George Soros Broke the Bank of England to Make $1.1B (2021)

#157

Post by lupire »

pis0m0jad0 wrote: post #73
simonh wrote: post #59

Earlier quoted context omitted.

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…

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 th…

> People trade, legally, on inside information all the time.

Example?

Re: The Day George Soros Broke the Bank of England to Make $1.1B (2021)

#158

Post by lupire »

nabla9 wrote: post #40
sam537 wrote: post #2

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.

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 ar…

Is the US an optimal currency area?

Re: The Day George Soros Broke the Bank of England to Make $1.1B (2021)

#159

Post by lupire »

jen20 wrote: post #78
mvc wrote: post #71

Earlier quoted context omitted.

> 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…

> 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.

so people will take smaller loans and pay less. This is good.

Re: The Day George Soros Broke the Bank of England to Make $1.1B (2021)

#160

Post by MerelyMortal »

shrubble wrote: post #84

"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 tal…

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.

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