Amazon Vehicles Beauty Trade in your textbooks STEM nav_sap_plcc_ascpsc Starting at $39.99 Wickedly Prime Handmade Gifts for Dad Shop Popular Services twinpeaksv2 twinpeaksv2 twinpeaksv2  Introducing Echo Show All-New Fire HD 8, starting at $79.99 Kindle Oasis Trade it in. Fund the next. National Bike Month on Amazon Ellen
Customer Review

50 of 56 people found the following review helpful
4.0 out of 5 stars Add-On To Prior Book; Overly Complex (for me at least), April 14, 2009
This review is from: The Crash of 2008 and What it Means: The New Paradigm for Financial Markets (Paperback)
This book is a reissue of one Soros published in 2008 ("The New Paradigm for Financial Markets)," with a new section added in which Soros confesses to making some investment errors last year (but still coming out ahead), and underestimating the extent of the current market crash. (See my prior review of his prior book.)

Most of what Soros added is beyond my level of comprehension, possibly explaining why he's rich and I'm not. One point, however, did come out quite clear. Soros points out that buying CDS contracts is the same as going short on those same bonds, while carrying limited risk and unlimited potential profit potential. (Shorting the bonds instead offers unlimited risk and limited profit potential.) This encourages speculating on the short side, and (per Soros) exerts a downward pressure on the underlying bonds.

Soros goes on to claim that Lehman Brothers, AIG, etc. were destroyed by bear raids via shorting stocks and buying CDS. (I see a simpler explanation for AIG's fall - selling too many CDS on different bonds, thinking they would disperse risk and forgetting that they were all highly positively correlated.)

Unlimited shorting of stocks was made possible by abolition of the uptick rule (allowed short sales only when prices were rising), and facilitated by the CDS market.

Soros' bottom line is that the 2008 market crash proves that the efficient-market hypothesis (seeks and finds equilibrium) is now officially dead, giving Soros another opportunity to push his theory of reflexivity (better explained in Wikipedia). He then goes on to offer predictions on where Russia, China, India, etc. are headed in the near future.

Finally, Soros also claims that Obama is facing problems 2X those faced by FDR. The total outstanding credit was 160% GDP in 1929, 260% in 1932 (decline in GDP, accumulation of debt). By comparison, we entered the 2008 crash at 365%, and Soros believes this will rise to about 500% of GDP.
Help other customers find the most helpful reviews 
Was this review helpful to you? Yes No

Be the first person to comment on this review.

[Add comment]
Post a comment
To insert a product link use the format: [[ASIN:ASIN product-title]] (What's this?)
Amazon will display this name with all your submissions, including reviews and discussion posts. (Learn more)
Name:
Badge:
This badge will be assigned to you and will appear along with your name.
There was an error. Please try again.
Please see the guidelines and FAQs here.

Official Comment

As a representative of this product you can post one Official Comment on this review. It will appear immediately below the review wherever it is displayed.   Learn more
The following name and badge will be shown with this comment:
 (edit name)
After clicking the Post button you will be asked to create your public name, which will be shown with all your contributions.

Is this your product?

If you are the author, artist, manufacturer or an official representative of this product, you can post an Official Comment on this review. It will appear immediately below the review wherever it is displayed.  Learn more
Otherwise, you can still post a regular comment on this review.

Is this your product?

If you are the author, artist, manufacturer or an official representative of this product, you can post an Official Comment on this review. It will appear immediately below the review wherever it is displayed.   Learn more
 
System timed out

We were unable to verify whether you represent the product. Please try again later, or retry now. Otherwise you can post a regular comment.

Since you previously posted an Official Comment, this comment will appear in the comment section below. You also have the option to edit your Official Comment.   Learn more
The maximum number of Official Comments have been posted. This comment will appear in the comment section below.   Learn more
Prompts for sign-in
  [Cancel]