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> 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, a

by Jyaif 5y ago

> 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?

astoor 5y ago
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 others irrespective of the negative effects this might have on society or the environment or whatever.
- mhh__ 5y ago
  Wouldn't Soros argue that all he did was accelerate their leaving of an already increasingly strained ERM? The ministers in charge didn't want to be in the ERM, it was all Major.
- ceejayoz 5y ago
  > He forced mortgage rates, for example, to shoot up to 15%, with crippling monthly payments for a large chunk of the population. Does British monetary policy not get some blame, here? It was a sudden shock because they were putting their foot on the scale for quite some time.
  - mhh__ 5y ago
    The ERM was Major's big idea, most of his ministers didn't like it. The fact that they still went along with it is unimaginable in British politics today. Although the market's should not be worshipped, this is probably a good example of why you shouldn't be too ardent in your nudging of them for political reasons.
  - vlovich123 5y ago
    Another commenter mentioned this was part of the process to standardizing the UK on the Euro.
- jen20 5y ago
  > 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.
  - NikolaNovak 5y ago
    Interesting. In Canada you can only get up to 5 years fixed typically. Mortgage itself is 25 years but terms change every 5 usually. 30y fixed feels... Crazy. How much above market does it have to be for banks to take that risk??
    - makomk 5y ago
      The banks don't take the risk of offering such long-term fixed rates. The US government does through Fannie Mae and Freddie Mac, effectively subsidising the mortgage market. Other countries don't do this and don't have the same kind of long-term fixed mortgages as a result.
      - jen20 5y ago
        > The US government does through Fannie Mae and Freddie Mac, effectively subsidising the mortgage market. For so-called "conforming" loans (647k USD this year), the equivalent of which would be enough to buy a nice house almost anywhere in the UK except London, the nicer parts of the Home Counties or the South West.
      - NikolaNovak 5y ago
        Geebus. How did I never pick up on that juicy tidbit during 2008 coverage. That's both awesome and insane
    - vxNsr 5y ago
      People with a low risk profile today get 2-4% fixed rate. What’s it like in Canada?
gadders 5y ago
He's done plenty of bad stuff before and since.
- mikeyouse 5y ago
  Such as?
  - gunfighthacksaw 5y ago
    Appeared in multiple deranged conspiracy theories.
    - jcranmer 5y ago
      Well, the answer I was going to give was "he's Jewish^H^H^H^H^H^Han international globalist financier", but that's the same thing really.
      - mardifoufs 5y ago
        There is plenty of hate for the Koch Brothers, and they are Jewish too. It's just fashionable to hate a billionaire who finances "the other side" imo. And it's hard to deny Soros is very politically active with his money, probably more so than your average billionaire, just like the Koch brothers are.
        mikeyouse 5y ago
        The Koch brothers aren't Jewish... That would have been an awkward meeting when their father went to Hamburg to meet Hitler to build an oil refinery. They don't practice but were loosely affiliated with the Catholic church for a time.
        mardifoufs 5y ago
        Oh wow, you are absolutely right. I don't know how I made that mistake, but I think I got confused with Sheldon Andelson as I saw him on the news due to his recent passing (the cheering by some people is probably what made me see some parallels with the George soros obsession). To be fair, it's hard to keep up with all of America's billionaires!
horsestaple 5y ago
He didn't do it to 'fix a disequilibrium', he ruthlessly exploited an opportunity for personal gain at the expense of an entire country. You can argue about the positive long term consequences, or the responsibility of the people that created the situation, but he is most definitely 'a' bad guy.
- colinmhayes 5y ago
  Absolutely not. In fact, I'd say Soros is a hero in this story. It was not ending the peg that cost the british people, but creating it. The bank of england was throwing away billions of dollars trying to sustain a peg that was never sustainable. Soros' actions convinced the bank to give up and stop wasting the peoples money.
AlexandrB 5y ago
I think there's a knee-jerk reaction to short-sellers or actions like this because they cause loss of value for a mass of people. I, frankly, don't understand it. Those ultimately responsible are the entities that pumped up a bubble in the first place. Shooting the messenger who is effectively saying "this valuation is unreasonable" is counterproductive. It's like blaming the guy who brings a scam to your attention instead of the scammer. And to be clear, I'm not saying that short-selling is inherently virtuous. It's a speculative activity like any other in our financial system. But it doesn't make sense that speculation (or even market manipulation) which increases an asset's value is often seen as ok, while the opposite is not. Edit: Here's a good example - the current Canadian Real Estate Bubble[1]. I wish someone would pop this thing. It's already so big that it's going to hurt a lot of people. The government seems unwilling to do much to restrain it, especially since the pandemic, and as it gets bigger the potential fallout only increases. But I'm willing to bet that if some singular investor/regulator triggers an unwinding they will be blamed for all the consequences. Not the 20 years of policies and decisions that led to the bubble getting this large in the first place. [1] https://en.wikipedia.org/wiki/Canadian_property_bubble https://en.wikipedia.org/wiki/Canadian_property_bubble
- helen___keller 5y ago
  On a related note, I wonder why glorified investors like Michael Burry aren’t instead demonized for contributing to, and profiting from, the near collapse of the American economy in 2008 (obviously it’s not Burry’s fault that banks gave out shit mortgages, nor is it Soros’ fault that the pound sterling was overvalued. They both took large positions to profit off these events as economies crashed)
  - Ferrotin 5y ago
    Because Burry et al helped collapse it sooner and softer, and their profits came from the banks’ losses.
    - helen___keller 5y ago
      > Because Burry et al helped collapse it sooner and softer Could you not make the same argument for Soros? > their profits came from the banks’ losses. Where do you think that money came from? When mortgages go bad, the banks foreclose the property and sell it. When the banks go bad, the government props them up (in 2008) by buying their toxic assets The sale of those toxic assets let banks cover their bad positions, including those with Burry Burrys profit came from foreclosures and the American government (in the narrative sense that Soros’ money came from the people of England) Which again begs the question of why Soros is the villain and not also Burry
falcolas 5y ago
By causing a recession? Money in the banking system isn't owned by the banks, it comes from the general public.
- unmole 5y ago
  The UK was already in recession by time. Soros most definitely did not cause it. The British economy rebounded sharply afterwards, helped at least in part by the fact that British labour was suddenly more price competitive.
  - falcolas 5y ago
    > that British labour was suddenly more price competitive That seems to translate to "workers were getting paid less and their savings were devalued" to me. Am I mistaken?
    - unmole 5y ago
      > That seems to translate to "workers were getting paid less and their savings were devalued" to me. Am I mistaken? Sure, that's one way to look at it. But then you have to ask yourself why countries deliberately try to devalue their currencies and why other countries get mad when that happens.
      - falcolas 5y ago
        I don't know, why would workers whose compensation has been effectively cut be mad at some billionaire who did it to make more billions? This isn't just about countries as an abstract. It's about the people and the impact on them.
        unmole 5y ago
        > whose compensation has been effectively cut Black Wednesday happened in 1992. In 1991 inflation in the UK was 7.46%, in 1992 it dropped to 4.59% and in 1993 to 2.56%. So, who was really responsible for reducing the purchasing power of British workers? Soros or the BoE?
JumpCrisscross 5y ago
> How is he the bad guy in this story? He’s narratively identifiable. Soros didn’t individually break the BoE. Lots of people were in on the trade. But he did so massively, relative to his personal wealth and to the market, and publicly. So he gets pinned. Had he not traded the peg would have still broken. We’d just discuss it like we do the Asian or Russian Financial Crises [1][2], which happened five years later. Unrealistic pegs that suffered runs. Not a man “breaking” a Western central bank. [1] https://www.britannica.com/event/Asian-financial-crisis https://www.britannica.com/event/Asian-financial-crisis [2] https://en.m.wikipedia.org/wiki/1998_Russian_financial_crisis https://en.m.wikipedia.org/wiki/1998_Russian_financial_crisi...
thrwyoilarticle 5y ago
In part because right wing media don't want to blame John Major & left wing media don't want to support a billionaire.
- timthorn 5y ago
  I don't think right wing media hold a particular candle for John Major.
jddil 5y ago
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.
- not2b 5y ago
  But he isn't really of "the left", he has mainly funded centrist Democrats, not the progressive wing; as you say, he is a capitalist. And his influence is greatly exaggerated.
  - jddil 5y ago
    100% agree, doesn't change what the right believes he is though.
- epakai 5y ago
  Russia doesn't like him because he has been active in encouraging Ukraine's adhesion to the West. The amount of Soros Bad narrative since then (2015) has increased a lot.

by Jyaif 5y ago

astoor 5y ago

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 others irrespective of the negative effects this might have on society or the environment or whatever.

mhh__ 5y ago
Wouldn't Soros argue that all he did was accelerate their leaving of an already increasingly strained ERM? The ministers in charge didn't want to be in the ERM, it was all Major.
ceejayoz 5y ago
> He forced mortgage rates, for example, to shoot up to 15%, with crippling monthly payments for a large chunk of the population. Does British monetary policy not get some blame, here? It was a sudden shock because they were putting their foot on the scale for quite some time.
- mhh__ 5y ago
  The ERM was Major's big idea, most of his ministers didn't like it. The fact that they still went along with it is unimaginable in British politics today. Although the market's should not be worshipped, this is probably a good example of why you shouldn't be too ardent in your nudging of them for political reasons.
- vlovich123 5y ago
  Another commenter mentioned this was part of the process to standardizing the UK on the Euro.
jen20 5y ago
> 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.
- NikolaNovak 5y ago
  Interesting. In Canada you can only get up to 5 years fixed typically. Mortgage itself is 25 years but terms change every 5 usually. 30y fixed feels... Crazy. How much above market does it have to be for banks to take that risk??
  - makomk 5y ago
    The banks don't take the risk of offering such long-term fixed rates. The US government does through Fannie Mae and Freddie Mac, effectively subsidising the mortgage market. Other countries don't do this and don't have the same kind of long-term fixed mortgages as a result.
    - jen20 5y ago
      > The US government does through Fannie Mae and Freddie Mac, effectively subsidising the mortgage market. For so-called "conforming" loans (647k USD this year), the equivalent of which would be enough to buy a nice house almost anywhere in the UK except London, the nicer parts of the Home Counties or the South West.
    - NikolaNovak 5y ago
      Geebus. How did I never pick up on that juicy tidbit during 2008 coverage. That's both awesome and insane
  - vxNsr 5y ago
    People with a low risk profile today get 2-4% fixed rate. What’s it like in Canada?

gadders 5y ago

He's done plenty of bad stuff before and since.

mikeyouse 5y ago
Such as?
- gunfighthacksaw 5y ago
  Appeared in multiple deranged conspiracy theories.
  - jcranmer 5y ago
    Well, the answer I was going to give was "he's Jewish^H^H^H^H^H^Han international globalist financier", but that's the same thing really.
    - mardifoufs 5y ago
      There is plenty of hate for the Koch Brothers, and they are Jewish too. It's just fashionable to hate a billionaire who finances "the other side" imo. And it's hard to deny Soros is very politically active with his money, probably more so than your average billionaire, just like the Koch brothers are.
      - mikeyouse 5y ago
        The Koch brothers aren't Jewish... That would have been an awkward meeting when their father went to Hamburg to meet Hitler to build an oil refinery. They don't practice but were loosely affiliated with the Catholic church for a time.
        mardifoufs 5y ago
        Oh wow, you are absolutely right. I don't know how I made that mistake, but I think I got confused with Sheldon Andelson as I saw him on the news due to his recent passing (the cheering by some people is probably what made me see some parallels with the George soros obsession). To be fair, it's hard to keep up with all of America's billionaires!

horsestaple 5y ago

He didn't do it to 'fix a disequilibrium', he ruthlessly exploited an opportunity for personal gain at the expense of an entire country. You can argue about the positive long term consequences, or the responsibility of the people that created the situation, but he is most definitely 'a' bad guy.

colinmhayes 5y ago
Absolutely not. In fact, I'd say Soros is a hero in this story. It was not ending the peg that cost the british people, but creating it. The bank of england was throwing away billions of dollars trying to sustain a peg that was never sustainable. Soros' actions convinced the bank to give up and stop wasting the peoples money.

AlexandrB 5y ago

I think there's a knee-jerk reaction to short-sellers or actions like this because they cause loss of value for a mass of people. I, frankly, don't understand it. Those ultimately responsible are the entities that pumped up a bubble in the first place. Shooting the messenger who is effectively saying "this valuation is unreasonable" is counterproductive. It's like blaming the guy who brings a scam to your attention instead of the scammer. And to be clear, I'm not saying that short-selling is inherently virtuous. It's a speculative activity like any other in our financial system. But it doesn't make sense that speculation (or even market manipulation) which increases an asset's value is often seen as ok, while the opposite is not. Edit: Here's a good example - the current Canadian Real Estate Bubble[1]. I wish someone would pop this thing. It's already so big that it's going to hurt a lot of people. The government seems unwilling to do much to restrain it, especially since the pandemic, and as it gets bigger the potential fallout only increases. But I'm willing to bet that if some singular investor/regulator triggers an unwinding they will be blamed for all the consequences. Not the 20 years of policies and decisions that led to the bubble getting this large in the first place. [1] https://en.wikipedia.org/wiki/Canadian_property_bubble https://en.wikipedia.org/wiki/Canadian_property_bubble

helen___keller 5y ago
On a related note, I wonder why glorified investors like Michael Burry aren’t instead demonized for contributing to, and profiting from, the near collapse of the American economy in 2008 (obviously it’s not Burry’s fault that banks gave out shit mortgages, nor is it Soros’ fault that the pound sterling was overvalued. They both took large positions to profit off these events as economies crashed)
- Ferrotin 5y ago
  Because Burry et al helped collapse it sooner and softer, and their profits came from the banks’ losses.
  - helen___keller 5y ago
    > Because Burry et al helped collapse it sooner and softer Could you not make the same argument for Soros? > their profits came from the banks’ losses. Where do you think that money came from? When mortgages go bad, the banks foreclose the property and sell it. When the banks go bad, the government props them up (in 2008) by buying their toxic assets The sale of those toxic assets let banks cover their bad positions, including those with Burry Burrys profit came from foreclosures and the American government (in the narrative sense that Soros’ money came from the people of England) Which again begs the question of why Soros is the villain and not also Burry

falcolas 5y ago

By causing a recession? Money in the banking system isn't owned by the banks, it comes from the general public.

unmole 5y ago
The UK was already in recession by time. Soros most definitely did not cause it. The British economy rebounded sharply afterwards, helped at least in part by the fact that British labour was suddenly more price competitive.
- falcolas 5y ago
  > that British labour was suddenly more price competitive That seems to translate to "workers were getting paid less and their savings were devalued" to me. Am I mistaken?
  - unmole 5y ago
    > That seems to translate to "workers were getting paid less and their savings were devalued" to me. Am I mistaken? Sure, that's one way to look at it. But then you have to ask yourself why countries deliberately try to devalue their currencies and why other countries get mad when that happens.
    - falcolas 5y ago
      I don't know, why would workers whose compensation has been effectively cut be mad at some billionaire who did it to make more billions? This isn't just about countries as an abstract. It's about the people and the impact on them.
      - unmole 5y ago
        > whose compensation has been effectively cut Black Wednesday happened in 1992. In 1991 inflation in the UK was 7.46%, in 1992 it dropped to 4.59% and in 1993 to 2.56%. So, who was really responsible for reducing the purchasing power of British workers? Soros or the BoE?

JumpCrisscross 5y ago

> How is he the bad guy in this story? He’s narratively identifiable. Soros didn’t individually break the BoE. Lots of people were in on the trade. But he did so massively, relative to his personal wealth and to the market, and publicly. So he gets pinned. Had he not traded the peg would have still broken. We’d just discuss it like we do the Asian or Russian Financial Crises [1][2], which happened five years later. Unrealistic pegs that suffered runs. Not a man “breaking” a Western central bank. [1] https://www.britannica.com/event/Asian-financial-crisis https://www.britannica.com/event/Asian-financial-crisis [2] https://en.m.wikipedia.org/wiki/1998_Russian_financial_crisis https://en.m.wikipedia.org/wiki/1998_Russian_financial_crisi...

thrwyoilarticle 5y ago

In part because right wing media don't want to blame John Major & left wing media don't want to support a billionaire.

timthorn 5y ago
I don't think right wing media hold a particular candle for John Major.

jddil 5y ago

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.

not2b 5y ago
But he isn't really of "the left", he has mainly funded centrist Democrats, not the progressive wing; as you say, he is a capitalist. And his influence is greatly exaggerated.
- jddil 5y ago
  100% agree, doesn't change what the right believes he is though.
epakai 5y ago
Russia doesn't like him because he has been active in encouraging Ukraine's adhesion to the West. The amount of Soros Bad narrative since then (2015) has increased a lot.