Soros: world faces worst finance crisis since WW2

Soros: world faces worst finance crisis since WW2

VIENNA, Jan 22 (Reuters) - Billionaire investor George Soros said the world was facing the worst financial crisis since World War Two and the United States was threatened with recession, according to an interview with the Austrian daily Standard.
"The situation is much more serious than any other financial crisis since the end of World War Two," Soros was quoted as saying.

He said over the past few years politics had been guided by some basic misunderstandings stemming from something which he called "market fundamentalism" -- the belief financial markets tended to act as a balance.
"This is the wrong idea," he said. "We really do have a serious financial crisis now."
Asked whether he thought the United States was headed for a recession, he said: "Yes, this is a threat in the United States".
He added he was surprised how little understanding there had been on how recession was also a threat to Europe.

European shares fell nearly 6 percent on Monday, their biggest one-day slide since the Sept. 11 attacks of 2001, as fears of a U.S. recession and more write downs in the financial sector sparked a broad-based selloff. (Reporting by Karen Strohecker)
Soros: world faces worst finance crisis since WW2 | Markets | Bonds News | Reuters

 

Tropo

I think he should have said that the United States is threatened with bankrupsy...

 

Yes... I wonder if this is just another correction or whether it's The Big Deal. Tropo, what are your views on the U.S. Govt. financing Fannie and Freddie and now AIG? Delaying the inevitable or propping up the system to avoid economic colapse?

Mark

 

Mark,

It all depends what we call inevitable... unless we are talking about The Great Depression scenario.
I do not think that rescuing AIG or FF solved anything. Probably slowed down inevitable – whatever it means.
Few charts I checked are rather distressing and each represents “view to a kill” (China is another problem, world will face it sooner rather than later).
We are not dealing with a correction anymore. This may become a BIG problem.
Unfortunately not many people know what is really going on, so markets are in a ‘panic mode’.
Cannot give you more – but it seems that party is over for the next 5~8 years.
On the other hand as DaveJ said, now is a big opportunity to make a lot of money on the short side of the market.
One more...Now is not a good time for average Joe...even to contemplate Stock Market (IMHO), but it is a good time to take a break and go for a nice holiday.

 

Tropo

What do you think will happen with China?

Cheers

 

Mark - what is in your view the inevitable and what does economic colapse mean ?

I find it hard to believe we will not have any more banks, shops, hotels, etc... All these will have some value.

Everyone is talking like the sky is falling ... I think it's important to put some perspective on this BIG, MAJOR, CRISIS, MELTDOWN or whaterver you want to call it.

 

ActiveTrade,

In my opinion (note it's only an opinion) is that 'the inevitable' is the excesses of the last nearly 30 years of massive economic mismanagement in the U.S. coming home to roost. Looking from the outside, the U.S. has used it's economy like one massive credit card. It's gotta come back to slap them in the face at some point in time. Just a matter of when, I reckon.

Mark

 

I think that China is not immune to the current financial crisis (if situation is as bad as it looks).
I’ve been told long time ago, that what is going up must go down, and Shanghai SM chart makes me very pessimistic at the moment.

 

Perhaps they are not immune to this financial crisis but even if their growth halves this year they will still be running at a massive 5%.
Not to mention that they have so much foreign reserves they don't know what to do with it.

 

Yep...maybe...possible....that is what mass media ‘gurus' are saying.
Not long ago the same ‘gurus’ were saying that big banks are non destructible...
Yeh....right.
It all comes down to your own opinion.