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George Soros' remarkable speech on the "political bubble" of the EU: "The (current) political...
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Sunday, June 3, 2012, 8:44 AM ETGeorge Soros' remarkable speech on the "political bubble" of the EU: "The (current) political dynamic makes the disintegration of the EU just as self-reinforcing as its creation has been ... (however) the likelihood is that the euro will survive because a breakup would be devastating not only for the periphery, but also for Germany." He gives the Germans 90 days to come around. Worth the full read.
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And who is he? Your conspiracy theorism is showing....
They will always require us, using force if necessary, to do as they say, not as they do.
Again, he is a crony capitalist. If he wasn't a crony, and if he was truly an across-the-board capitalist for all, he wouldn't be so heavily involved in funding MoveOn.org and any other off-shoot of that organization.
I live in a country (Canada), where the leaders:
1) Spent 1.3 billion dollars to hold two economic meetings
2) Allocated $3 Billion for healthcare in Africa
3) Printed $75 Billion dollars of notes to the banks
4) And promised another $200 Billion dollars down-the-road to those banks
5) Sold government debt to those same banks, the banks using the printed money to 'buy' such weak investment vehicles
Y.E.T.,
The Canadian government continues to make cuts to public healthcare (15% of Canadians are waiting to get a PCP)
A.N.D.
the same government continues to prevent nearly all forms of private medical care opportunities for the patients that have to go without because of the artificially imposed shortages in the public system.
It doesn't matter which party is in power, now or in the future, because they all behave in the same self-preservationist mode.
the same government continues to prevent nearly all forms of private medical care opportunities for the patients that have to go without because of the artificially imposed shortages in the public system."
Geeeez... And this is one of the 'darlings' of Gubment healthcare systems, that we in the USA, keep getting shoved upon us.
No thanks.
That said, the speech (like the Euro itself) has some crucial fundamental flaws. It is based upon the premise that "the Euro" must be saved, at any cost. While I agree that addressing the Euro crisis requires much bolder thinking and action than has been displayed to date, the speech fails to It does not contemplate some fundamental re-thinks on: 1) is a common currency even a wise thing to put in place when the political union isn't there; 2) if a common currency is to stay in place, do the conditions of membership need to be changed & enforced (which probably implies one or more countries being kicked out in short order), 3) how all the massive debt is going to be managed, particularly if the pro growth prescriptions lead to continued (and probably larger) deficits for the foreseeable future, especially in light of 4) practically no credible sign that ANY country is going to fundamentally address (in magnitudes that actually matter) their spending and lack of competitiveness in ANY time frame (short, medium, or long term).
And lastly, who the heck would call an event a "Festival of Economics"? :-)
From the very outset, Martin Feldstein and others believed the design of the euro was deeply flawed because of cultural differences, lack of labor mobility, lack of a common language and rigid labor markets at the state level. Had he known more about systemic political corruption and tax evasion, his doubts would have increased.
Soros' prescriptions, which are shared by many, largely call for channeling more money through some combination of printing, more flexible lending and fiscal consolidation............ transfer of wealth from those who work and prosper to those who don't. Specifically, many want to see the ESM given a banking license; the EFSF the ability to lend directly to troubled banks so that host sovereigns are not stuck with the bill; the ECB to buy bonds in the primary market; and a host of other measures including supra national deposit insurance.
This would doubtless buy time but if the underlying pathologies go unaddressed its simply a matter of time before the troubles of the EMU are revisited, raising the obvious question of when are we going to address the real imbalances that create divergent competitiveness, current account imbalances, budget deficits and rising sovereign interest rates that threaten both the nation state and national banking systems. The financial crisis reflects a deeper economic crisis stemming from the hopelessly sclerotic economies plaguing the EMU.
Unless leaders are able to reduce government footprints, reduce regulations and red tape, reduce the influence of unions and cartels, eliminate pervasive corruption it’s rather hopeless and they will always be inflicted with dysfunctional economies incapable of anything more than running deficits and accumulating debt. At a national level, many economies are broken.
Taking this to be the case, Germany should steel itself for a dramatic restructuring of the EMU or resign itself to permanent fiscal transfers to support the less productive at the expense of those who produce.
"Among other things, I developed a model of a boom-bust process or bubble which is endogenous to financial markets, not the result of external shocks. According to my theory, financial bubbles are not a purely psychological phenomenon. They have two components: a trend that prevails in reality and a misinterpretation of that trend. A bubble can develop when the feedback is initially positive in the sense that both the trend and its biased interpretation are mutually reinforced. Eventually the gap between the trend and its biased interpretation grows so wide that it becomes unsustainable. After a twilight period both the bias and the trend are reversed and reinforce each other in the opposite direction. Bubbles are usually asymmetric in shape: booms develop slowly but the bust tends to be sudden and devastating. That is due to the use of leverage: price declines precipitate the forced liquidation of leveraged positions."
Whether you hate the guy or not, his concept on market bubbles is tough to argue against. As investors we can learn from the investment directions that Soros takes. Whether we choose to copy his ideas, or bet against him, is another matter.
http://scr.bi/M0XxL6
The second link has a link in it to a PDF of the research paper.
http://bit.ly/KtYUqZ
This came out months ago, but is one of the best analysis I have seen so far.
thanks for the links. Very informative.
These behaviors (talk down while accumulating, talk up while selling) apply to many other fund managers as well. You can't trust them, so don't.
People who hate him generally have no idea what his views are on reflexivity, which is to say that people generally have no idea about anything when it comes to the man.
George Soros is politically opposite of me, but that doesn't mean I'll randomly demonize him.
Spot on. You can bet the house that Soros has a trade on the will benefit from his "free advice".
America = already socialist country
Canada = already communist country
Great Britain = already communist country
As for what people want, it's pretty obvious: everyone wants a free lunch. Many of the problems we face right now are the result of too many people being allowed or encouraged by politicians to believe they can have one, or worse still that they're entitled to it. Soros's speech actually recognises this, but as one of the politically-motivated liars he demands that only the productive, the successful, and the prudent stop lying to themselves about getting something for nothing. The weak, the useless, and the profligate are encouraged to continue believing in their right to a free lunch. In other words, the Germans must accept the need to relinquish their savings to the Greeks, Spanish, and Italians in one form or another in order to preserve their ability to produce and export, while the Greeks, Spanish, and Italians need do nothing except spend the Germans' money on whatever they like. This is a very popular mainstream view, and while Soros has a fancy-sounding set of underpinnings to justify it, it's really just the same old tripe. The insightful portions of the speech were in the descriptive background, and it was worth reading for that. The prescriptive portion is, in its essence, the same garbage you can get from any stoned sophomore on your local college campus. If you read carefully, you'll see that there's no real connection between the two.
Let's continue with the thought "most'------it is fair to say that 'most' Americans have been deceived by the recent 4 years of socialists manipulation of America beginning with the Executive office.
Time to say sayonara , goodbye, aloha to Mr. Obama and his socialism-------supported by Mr. Soros. Crony socialism for sure.
I think you just wrote the definition of a liar.
Perhaps a return to feudalism is in order. Let the ruling class rule, and if they want to hand any crumbs to the commoners, that's up to them. I'm just waiting to hear some modern day politician say his version of "let them eat cake". ;-)
They say it every day. What I'm waiting for is a repeat of what followed.
I think he just doesn't really know. He gets asked about some rumored position of his family office where the questioner doesn't have all the facts and it seems like he just doesn't know what the position is they are referring to in any detail. I think his days of being a position trader are over and he has moved on.
" I think he just doesn't really know."
You sound really nieve.
The Tea Party is leading the charge. The Tea Party just passed a gigantic deficit spending bill all on outdated military products that the Pentagon says it doesn't want and doesn't need. Inserted into that bill is a Tea Party rider by two Congressmen from Texas that would empower the federal gov't to propagandize it's own citizens. Currently, the federal gov't is only allowed to run propaganda campaigns against foreign nations. But now the Tea Party wants to propagandize U.S. citizens as well. Indeed it does appear that the Tea Party's goal is to turn DC into the Kremlin.
And it's a not a question of stupid, it is a question of disinterestedness.
Thanks for the obligatory counter propaganda to alleged propaganda and firm demonization of the alleged demons. It is good we have become a nation of high ideals and this endless tennis game goes on and on between twins separated at birth.
Centralized control by any political party or persons is closer to the USSR and other regimes regardless of the rationale. Every politician wants power whether they admit it or not which is why they are in politics and why we should not trust any of them.
The true measure of where we stand is the fact that everyone looks to WDC for all solutions. And of course governments at all levels are sucking from the economy and changing the vernacular what freedom means and that the government "deserves" economic largesse.
I think you missed the thrust of what I was saying. I don't care where the policy comes from as I don't trust any politician farther than I can throw them. Centralized programs are really about centralized power and that is the USSR redux.
OK I will respond to your half ass charges.
First if you find any comment from me that says "bail out banks from the general fund" then I will say you are a Bo Derek 10! That will not happen for obvious reaons and I don't even know what you mean by the "general fund."
Banks failed by the boat load in the past 4 years in case you missed it. The banks that did receive TARP have all paid it back in case you missed that too. And AIG is not a bank in case you missed that.
Boring!!!
http://bit.ly/KDyJN1
I'm not railing against banks nor against TARP nor confusing AIG with a bank. That's just you throwing out as many red herrings as you can think of.
Please spare me your juvenile Bo Derek 10 comment. Makes me go EEEWW just thinking about it.
I used quotation marks for a reason as that quote I have not made. You reconstructed a comment of mind and tried to pass it off as a quote. Very underhanded.
You must be paid to be argumentative on SA because you really try hard to argue but not understand.
OK you really need direct feedback. You are argumentative to a fault, petty and juvenile. You use quotation marks incorrectly which is a misrepresentation and then scramble to rationalize it. Your main focus is just arguing ad nausea like some political hack.
Just go away I am not interested in anything about you or from you. That is why I am not trying to explain anything. Is that clear enough to get through your thick head?
The main problem in Europe is not that Greece or Portugal are weak. They have always been like that. The problem is the weakness of the banking sector in the core countries and the high leverage of all banks in Europe. This is what Europe needs to address somehow, while governments should be left to fend for themselves. Basically, the Europeans need to strengthen their banks and NOT allow banks to lend to any governments. That will solve the deficit problem pretty quickly which is good because the deficit spending is all complete waste.
Actually Soros has a problem with all Social Sciences that he outlines in The Alchemy of Finance. From there he launches into his theory of Reflexivity.
Not all economists are endorsing politicians but I would ask all of them who gives them their paycheck as that tells me a lot about what I will hear next. Corporate economists really try to get to the truth of what is happening as they need to help give the company direction and it falls on their head if they are wrong. Many other economists are way too far into politics.
EU, was created to prevent future wars in Europe, he is making the case about a superior Germany toward countries like Great Britain, France and Spain.
Any major geo political change in EU, must reflect on Federal policy in the US.
This is not likely to happen.
The German people are thinking, and increasingly, not buying it: The reaction in this Reflexivity model will be when they dump Merkel and insist on a new deal that doesn't always end with the German worker subsidizing the rest of Europe.
The result will be messy. Bankers will declare Armageddon..Again. Remember Hank Paulsen's ultimatum? Basically, 'Hand over the taxpayer's cash or God help us all.'
After four years of that can kicking exercise, the results are in: The bankers are better, and the savers are busted..And the paper they hung is still there, trillions in derivatives floating in FASB suspension fantasy land.
The politician's, (and in this case, promoter's) fix proposal is always the same: Spend more money now: Yours.
No politician in Europe can hold onto office talking the truth: Too much spending by too many for too long.
The bills are due.
given that they are trying to get ratification of the ESM by july 9, when this was hyped as the cure-all two years ago... !
http://bloom.bg/KYrGO0
i'd say they are not going to make it ...
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"The financier George Soros has forecast that the euro is destined to be a weak currency - contrary to the confidence in Europe just 10 weeks ago that it could challenge the dollar on the foreign exchanges."
-USA Today, 10 March 1999
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How has the euro done in the long term since Soros' bearish long-term call in 1999? For most of the time period since 1999, the Euro has been stronger than when Soros made his bearish call. In the following chart, a declining line means a strengthening Euro against the dollar:
http://bit.ly/LqDLtO
Speculators heading his advice back then would have made tons of money, and they had a whole year time to lock in their profits.
You always add such intelligence to the thread. Please keep up the brilliant writing as it educates the rest of so highly.
Try going in the water. It will cooool you off.
I was complimenting Terry330.
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SanDiego
Try going in the water. It will cooool you off.
I was complimenting Terry330.
======================...
Be careful.
Who knows how Terry330 looks when she puts on herself a hat and a pair of dark glasses
When John McCain had his eligibility status questioned by the left in regards to him being born on a military base in Panama, he produced his long-form birth certificate immediately. When Obama had the same questions raised about him, it took him 2 years into the White House to do the same.
How come I had to show more proof of birth origin in obtaining a passport to cross the Canadian/U.S. border than your President did when he took the Oval Office, especially since he was/is in control of your military and all it's firepower, not to mention the now revealed 'kill list'?
I hate him because he is a central planner, not because of the birth issue, but it is reaonsable to doubt his birth in America, given all the information that has come to light.
So....I guess if it makes you feel better. Like so many others, I suspect you don't really know a darn thing about Romney.....except he's from the other side.
Soros probably has a bet, knowing as much about him as I do, on Germany going down the toilet just like the rest of Europe.
Germany should separate from the Eurozone and take with them any others that WILL abide by strict economic rules.
Then let the chips fall where they may!
Put another way he is good at macro analysis but what he tells the public may or may not reflect what he believes should be done but rather what he wants to see done so he continues to be seen as the guru at the top of the mountain and/or advantage his investments He is the wrong guy to be a messenger for anything even though he may speak some or a lot of truth at times.
You miss the point and confuse the roles. Soros acts like a public figure when he gives out advices and money to governments and PAC's. He may or may not be sincere in that effort and you will never know because he also has material private interests that he manages against those public actions.
You can sort out when he is really sincere or not.
My second thought was that perhaps Germans accepted the Greek admission to the EU because they were tired of the cost and inconvenience of exchanging currency on their annual vacations to the Greek islands.
It looks like those quick and easy vacations to Greece ended up costing the Germans a fortune. Apparently the Germans realize this and are getting retribution in the best way they know how:
"Revenue from German tourists declined 61 percent in February (year over year)..."
Trichet not long before he left the ECB, responding to a question suggesting a return to the GDM. I'm German, yet I found his answer quite convincing. I carry around a 20GDM in my wallet as a memento, but I would hate to see a return to that currency.
and can anyone talking about the "tremendous" costs of doing this please provide demonstrable figures/numbers to show why or how this would be worse than staying and playing? thanks
Remember also that anything he says is considered by him before he says it so that it will give him the greatest possible benefit, and that the value of a statement to him will rest on the effect that it has on those who listen and those who respond.
What he is, and what he wants, has been described repeatedly in broadcast media, and in print. You either know by now, or you don't.
Remember, his hedge fund went private and it's strictly a family fund, so now the fund isn't constrained by SEC oversight.
Think of the message in his statement: it's almost as though he's making an ultimatum to the German government to go liberal and finance the collective indolence of the lazy socialist states lining the Mediterannean.
That's in diametric opposition to the spirit that will probably guide German policy, reflected in an old German saying that roughly translates as "Better to endure a disastrous event than an enduring disaster."
Those who follow the Soros investing compass will bet that Germany will do what he advises Germany to do. That means investors would be long the Euro, short German and Swiss bonds, long the EU, long PIIGS, long France, short the dollar versus the Euro.
Soros, on the other hand, will buy relatively inexpensive positions that are precisely inverse to those directions. And then, Soros will cash in big time between now and June 17th when Greece elects a socialist governement. Soros will make his moves all before the 17th of June; the 90-day ultimatum is a head-fake, the propaganda of misdirection.
When that happens, Soros will already have the following positions (and cash in big time): long Swiss and German bonds on a bet that they'll be re-monetized in Swiss Francs and Deutchmarks after the EU dissolves and the Euro tanks; short the Euro; long gold; short oil; short China exports, short US financial markets and short US manufacturing .
Disclosure: based on the above, where do you suppose I'll be?
YES, germany was the" big problem to begin with, maybe the rest of Europe should look at germany and see what they have done sinse problems started and try to learn from them.
Throwing small or large amounts of money at a problem is absolutely more politically palatable. And it does prolong the recovery. This sounds just like the Keynesian solution that made the Great Depression last a lot longer than it should have. Let's hope we don't see any bank holidays in the near future.
It's the oldest game in town, and it has been running for centuries. The Hanseatic League lost out years ago. I don't have to like it, but it helps to know how to profit from all this.
For people who absolutely detest governments, Somalia should be their country of choice.