Legendary hedge fund manager and multi-billionaire George Soros is back at his desk and he’s selling, according to a new report in the Wall Street Journal.
Soros, who famously broke the Bank of England with his bets against the pound staying in the ERM back in the early 1990s, “has returned to trading, lured by opportunities to profit from what he sees as coming economic troubles”, the Journal says.
Citing “people close to the matter”, the Journal says Soros has again taken the reins at his family office because he is worried “about the outlook for the global economy and concerned that large market shifts may be at hand”.
China appears to be the fulcrum from which Soros’s bearish view emanates.
He told the Journal by email that: “China continues to suffer from capital flight and has been depleting its foreign currency reserves while other Asian countries have been accumulating foreign currency.”
But it seems it is at the political level where he holds the greatest fear. He’s worried that while the economy is trying to make a difficult transition, the political system is not undergoing the same transformation. One Soros believes is necessary to support the changed economy.
“China is facing internal conflict within its political leadership, and over the coming year this will complicate its ability to deal with financial issues,” he said.
He’s also worried that China will continue to exert deflationary pressure on the global economy. And while he’s “confident that as we get closer to the Brexit vote, the ‘remain’ camp is getting stronger”, he worries that if Britain does decide to leave the EU, it could precipitate the collapse of the EU as we know it.
Soros is just one investor among many but the Journal notes that “the last time Mr Soros became closely involved in his firm’s trading: 2007” was to take out some bearish bets that made him more than $1 billion when the GFC hit.
You can read the full story here.