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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)

#71

Post by mvc »

jen20 wrote: post #28
astoor wrote: post #7

Earlier quoted context omitted.

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 oth…

> 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

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.

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

#72

Post by rvba »

admax88qqq wrote: post #19

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.

Probably helps with SEO.

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

#73

Post by pis0m0jad0 »

simonh wrote: post #59
mananaysiempre wrote: post #37

Earlier quoted context omitted.

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.)

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 the standard being you had intent.

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

#74

Post by xenocratus »

admax88qqq wrote: post #19

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 one might be better: https://priceonomics.com/the-trade-of-the-century-when-georg...

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

#75

Post by jddil »

Jyaif wrote: post #3

> 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?

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.

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

#76

Post by not2b »

rvba wrote: post #66

> 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 B…

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.

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

#77

Post by fallingfrog »

jddil wrote: post #70

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…

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.

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

#78

Post by jen20 »

mvc wrote: post #71
jen20 wrote: post #28

Earlier quoted context omitted.

> 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 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.

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

#79

Post by hn_throwaway_99 »

unmole wrote: post #21
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.

The Bank of England which was responsible for artificially pumping up the value of sterling is a more appropriate target for blame.

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.

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

#80

Post by helen___keller »

rvba wrote: post #66

> 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 B…

> I have a feeling that actions of central banks are poorly discussed

You and I have very different definition of “poorly discussed”.

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