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Well, no. Robbing a passed out drunk is a crime; you should feel bad for committing crimes, even if it's clear that if you didn't somebody else would. Shorting

Well, no. Robbing a passed out drunk is a crime; you should feel bad for committing crimes, even if it's clear that if you didn't somebody else would. Shorting a stock (or a currency) is not a crime; it's an acceptable thing to do in a market.

PhasmaFelis 12y ago
I was under the impression that we frown on screwing innocent people because it's a shitty thing to do, not because it happens to be designated as a crime. I'm not saying that what Soros did should be illegal, mainly because overregulation can wind up screwing innocent people in all sorts of different ways that I'm not wise enough to predict. But I surely don't understand why he's being held up for praise.
- CocaKoala 12y ago
  We do frown on screwing innocent people, and it is a shitty thing to do. Who screwed Britain? If you're going to tell me that it was George Soros, I'd like to hear why you're holding him more responsible than e.g. Helmut Schlesinger, or the reporter who paraphrased Schlesinger's quote and sent the market into a panic? edit: Or as loso pointed out in a comment above mine, is George Soros more responsible than the members of the British government who put the pound sterling in the terrible position to begin with?
  - zacinbusiness 12y ago
    Most (or at least some) of the politicians likely acted in good faith, believing they were doing the best for their country. Soros knew he would leave the people devastated but didn't care.
    - CocaKoala 12y ago
      That may be true, but I don't think it's relevant. The politicians still made bad decisions that led the country to ruin; you can say they didn't mean it, but that doesn't make it not their fault, nor does it mean it wouldn't have happened if Soros hadn't shorted the pound. And to rephrase the second sentence: Soros knew that the bad policy decisions of the politicians would leave the people devastated, but didn't care. Again, I'm not convinced that's relevant; Soros didn't make the situation, he just profited by it. That doesn't make it his fault.
    - edanm 12y ago
      I agree with CocaKola that this isn't relevant - I'd vote against having people acting in good faith, if the end result is getting screwed. As to your other point, this is how markets are supposed to work. Soros in effect helped show the incompetency of the government, which was a net good. People got screwed, certainly, but the situation was terrible and no one did anything about it until Soros stepped in. You could say that he is similar to Snowden or other whistleblowers in many ways. They through the government into chaos, likely endangered a lot of the economy and possibly lives, and they did it all because exposing the bad things the government was doing was more important. Of course, I'm not arguing that it's the same, as the whistleblowers do this despite the fact that it ruins their lives, and Soros did it to make money. What I am saying is, it's great we've setup a system where people like Soros are incentivized to uncover government screwups, so we can do better next time.
      - mercurial 12y ago
        > As to your other point, this is how markets are supposed to work. Soros in effect helped show the incompetency of the government, which was a net good. People got screwed, certainly, but the situation was terrible and no one did anything about it until Soros stepped in. > You could say that he is similar to Snowden or other whistleblowers in many ways. They through the government into chaos, likely endangered a lot of the economy and possibly lives, and they did it all because exposing the bad things the government was doing was more important. Grotesque. Soros certainly didn't give a damn about the public good. A better comparison would be somebody blowing a nuclear power plant to make a point that the security measures are insufficient. Should we congratulate terrorists next, because we can "do better" next time in terms of security? > Of course, I'm not arguing that it's the same, as the whistleblowers do this despite the fact that it ruins their lives, and Soros did it to make money. What I am saying is, it's great we've setup a system where people like Soros are incentivized to uncover government screwups, so we can do better next time. Really? Let me ask you, why was the situation terrible exactly? Because the pound was overvalued and exposed to the same predatory behaviour Soros demonstrated? Oh, right...
    - SixSigma 12y ago
      I think a £3.3b loss is hardly devastating. GDP in 1994 was £693bn Govt. spending was £4,687 per capita and this loss was about £54 per capita. Not zero but hardly devastating. http://www.ukpublicspending.co.uk/piechart_1994_UK_total http://www.ukpublicspending.co.uk/piechart_1994_UK_total £3.3b in 1994 would be £6bn today. As a comparison, in 1999 Gordon Brown sold the UK's gold before the market moved up, the equivalent of a £9b loss, £13b in today's money. He did this to give the banks an under the radar bailout by manipulating the markets. http://blogs.telegraph.co.uk/finance/thomaspascoe/100018367/revealed-why-gordon-brown-sold-britains-gold-at-a-knock-down-price/ http://blogs.telegraph.co.uk/finance/thomaspascoe/100018367/...
      - zacinbusiness 12y ago
        It's less about the total loss of money and more about the valuation of the currency. The mid-nineties saw the pound drop even further in value and it's only recently begun to grow stronger again.
        btbuilder 12y ago
        Not sure I agree that it has been 20 years of straight recovery. In the late 2000s it was 2:1 with USD for a time.
      - pja 12y ago
        As a comparison, in 1999 Gordon Brown sold the UK's gold before the market moved up, the equivalent of a £9b loss, £13b in today's money. He did this to give the banks an under the radar bailout by manipulating the markets. Gold doesn't pay interest, whereas the cash raised from the gold sale was used to buy (mostly) long term US treasuries to replace the gold in the BoE's asset portfolio. These have performed very well as an investment over the intervening years (look at, eg the BTTRX fund for a rough equivalent in the private sector) so the net loss is much smaller than you'd think.
  - PhasmaFelis 12y ago
    > Who screwed Britain? If you're going to tell me that it was George Soros, I'd like to hear why you're holding him more responsible than e.g. Helmut Schlesinger, or the reporter who paraphrased Schlesinger's quote and sent the market into a panic? As I said elsewhere, there's plenty of blame to go around. Lots of people were complicit, some of them more so than Soros. But Soros is the only one who's commonly held up as some sort of heroic capitalist ubermensch, so he's the one I went after.
- loso 12y ago
  Soros profited off of a screw up by the British government. And not just one screw up, many if you look at the full history of what happened. I think the British government screwed their people way more than Soros did.
- gatehouse 12y ago
  The British government might be the least "innocent" institution in existence.
  - PhasmaFelis 12y ago
    I was referring to the British taxpayers, not the government.
  - btbuilder 12y ago
    You think the British government is the "most guilty" institution in existence? Unless you cling to the idea that eradicated institutions (such as the Third Reich) don't count this seems more than a little harsh.
    - girvo 12y ago
      Well, the British Empire certainly has blood-stained hands, but that's sort of irrelevant to the discussion here (and what country/empire doesn't?)
    - gatehouse 12y ago
      Well just to clarify, I wasn't counting the 3rd Reich since it is "dead", similar for Ghengis Khan and the Romans. To me, guilt is what you've done, innocence is what you haven't done. The British government has done pretty much everything.
    - CocaKoala 12y ago
      Doesn't the phrase "in existence" by definition disqualify institutions which are eradicated and thus don't exist?
bronson 12y ago
And selling bad credit default swaps wasn't a crime either. So, according to your theory, the perpetrators of the last downturn should have sold as many bogus CDS packages as possible, right? Regardless of the damage? I'm happy most people don't subscribe to the same law-defined morals that you seem to.
- AndrewBissell 12y ago
  If Soros's bet had gone against him, he would have lost all of his investors' money and been left penniless. There would have been no bailout waiting in the wings. The guys selling CDSs they couldn't pay out had none of their own skin in the game, and were profiting from the presence of then implicit (now very EXPLICIT) government backstops. When they lost money, the public was forced to pay through devices like the AIG bailout, TARP, ZIRP, etc. There's no legitimate comparison between the two.
  - M2Ys4U 12y ago
    > If Soros's bet had gone against him, he would have lost all of his investors' money and been left penniless. There would have been no bailout waiting in the wings. Well, no. This is explained in the article: If Soros' assumption (that the exchange rate would plummet) hadn't been realised Sterling would've stayed at the lower bound of the ERM and Quantum wouldn't have lost much at all.
    - gabemart 12y ago
      We can have reasonable confidence in that assessment in hindsight. At the time, I would have been unwilling to gamble my net worth against the possibility of some unforeseen event causing a spike in the value of the pound. It was a non-zero risk.
      - VintageCool 12y ago
        Soros clearly had confidence in it. That's why he's the player that won the pot.
MarkPNeyer 12y ago
> you should feel bad for committing crimes, even if it's clear that if you didn't somebody else would i don't think edward snowden should feel bad for what he did, even if it's considered a crime. as for robbing a drunk guy in the gutter, you could argue that you are teaching him a lesson, and that the price of this lesson is the cash he has in his wallet now. it would be a rather aggresive marketing strategy, but hopefully the guy does learn from it. likewise, you could argue that soros breaking the bank of England is him teaching the people of the world a lesson - you can't prop up a currency indefinitely. people like him - folks with lots of money and more desire to earn money than to support practices they think are unsustainable - will prevent governments from pegging rates indefinitely, just as muggers will prevent people from wandering carelessly through parts of town where no one is watching them. i'd like to live in a world where people were more interested in gaining a positive reputation by passing on the chance to profit from destruction, even if it's legal. that wish is exactly like wanting to live in a world where nobody gets mugged: both of those situations are inevitable if omnipresent surveillance takes off. if being caught is a certainty, nobody's going to pick a wallet anywhere. if databases of people's responses to your actions are publicly available, many supporters of government-backed monetary policy - as well as the friends and families of those who suffered from his actions - will shun soros and anyone else who helps knock a tower over because 'it was going to fall anyhow.'
- CocaKoala 12y ago
  I have no idea what you're saying. You're bringing up Edward Snowden, who has literally nothing to do with the conversation at hand. Then you're proposing some form of defense for the idea of mugging the drunk guy. Then you're shifting right to omnipresent surveillance, which again has nothing to do with what we're talking about. Your comment is utterly incomprehensible to me; I know what all the individual words mean, but I can't put them together into a cohesive thought that's relevant. Can you rephrase yourself in a way that's more understandable?
  - PhasmaFelis 12y ago
    > You're bringing up Edward Snowden, who has literally nothing to do with the conversation at hand. That was pretty clearly a response to the line he quoted directly above, i.e. rebutting the notion that an action's morality is solely determined by whether or not that action is classified as a crime.

PhasmaFelis 12y ago

I was under the impression that we frown on screwing innocent people because it's a shitty thing to do, not because it happens to be designated as a crime. I'm not saying that what Soros did should be illegal, mainly because overregulation can wind up screwing innocent people in all sorts of different ways that I'm not wise enough to predict. But I surely don't understand why he's being held up for praise.

CocaKoala 12y ago
We do frown on screwing innocent people, and it is a shitty thing to do. Who screwed Britain? If you're going to tell me that it was George Soros, I'd like to hear why you're holding him more responsible than e.g. Helmut Schlesinger, or the reporter who paraphrased Schlesinger's quote and sent the market into a panic? edit: Or as loso pointed out in a comment above mine, is George Soros more responsible than the members of the British government who put the pound sterling in the terrible position to begin with?
- zacinbusiness 12y ago
  Most (or at least some) of the politicians likely acted in good faith, believing they were doing the best for their country. Soros knew he would leave the people devastated but didn't care.
  - CocaKoala 12y ago
    That may be true, but I don't think it's relevant. The politicians still made bad decisions that led the country to ruin; you can say they didn't mean it, but that doesn't make it not their fault, nor does it mean it wouldn't have happened if Soros hadn't shorted the pound. And to rephrase the second sentence: Soros knew that the bad policy decisions of the politicians would leave the people devastated, but didn't care. Again, I'm not convinced that's relevant; Soros didn't make the situation, he just profited by it. That doesn't make it his fault.
  - edanm 12y ago
    I agree with CocaKola that this isn't relevant - I'd vote against having people acting in good faith, if the end result is getting screwed. As to your other point, this is how markets are supposed to work. Soros in effect helped show the incompetency of the government, which was a net good. People got screwed, certainly, but the situation was terrible and no one did anything about it until Soros stepped in. You could say that he is similar to Snowden or other whistleblowers in many ways. They through the government into chaos, likely endangered a lot of the economy and possibly lives, and they did it all because exposing the bad things the government was doing was more important. Of course, I'm not arguing that it's the same, as the whistleblowers do this despite the fact that it ruins their lives, and Soros did it to make money. What I am saying is, it's great we've setup a system where people like Soros are incentivized to uncover government screwups, so we can do better next time.
    - mercurial 12y ago
      > As to your other point, this is how markets are supposed to work. Soros in effect helped show the incompetency of the government, which was a net good. People got screwed, certainly, but the situation was terrible and no one did anything about it until Soros stepped in. > You could say that he is similar to Snowden or other whistleblowers in many ways. They through the government into chaos, likely endangered a lot of the economy and possibly lives, and they did it all because exposing the bad things the government was doing was more important. Grotesque. Soros certainly didn't give a damn about the public good. A better comparison would be somebody blowing a nuclear power plant to make a point that the security measures are insufficient. Should we congratulate terrorists next, because we can "do better" next time in terms of security? > Of course, I'm not arguing that it's the same, as the whistleblowers do this despite the fact that it ruins their lives, and Soros did it to make money. What I am saying is, it's great we've setup a system where people like Soros are incentivized to uncover government screwups, so we can do better next time. Really? Let me ask you, why was the situation terrible exactly? Because the pound was overvalued and exposed to the same predatory behaviour Soros demonstrated? Oh, right...
  - SixSigma 12y ago
    I think a £3.3b loss is hardly devastating. GDP in 1994 was £693bn Govt. spending was £4,687 per capita and this loss was about £54 per capita. Not zero but hardly devastating. http://www.ukpublicspending.co.uk/piechart_1994_UK_total http://www.ukpublicspending.co.uk/piechart_1994_UK_total £3.3b in 1994 would be £6bn today. As a comparison, in 1999 Gordon Brown sold the UK's gold before the market moved up, the equivalent of a £9b loss, £13b in today's money. He did this to give the banks an under the radar bailout by manipulating the markets. http://blogs.telegraph.co.uk/finance/thomaspascoe/100018367/revealed-why-gordon-brown-sold-britains-gold-at-a-knock-down-price/ http://blogs.telegraph.co.uk/finance/thomaspascoe/100018367/...
    - zacinbusiness 12y ago
      It's less about the total loss of money and more about the valuation of the currency. The mid-nineties saw the pound drop even further in value and it's only recently begun to grow stronger again.
      - btbuilder 12y ago
        Not sure I agree that it has been 20 years of straight recovery. In the late 2000s it was 2:1 with USD for a time.
    - pja 12y ago
      As a comparison, in 1999 Gordon Brown sold the UK's gold before the market moved up, the equivalent of a £9b loss, £13b in today's money. He did this to give the banks an under the radar bailout by manipulating the markets. Gold doesn't pay interest, whereas the cash raised from the gold sale was used to buy (mostly) long term US treasuries to replace the gold in the BoE's asset portfolio. These have performed very well as an investment over the intervening years (look at, eg the BTTRX fund for a rough equivalent in the private sector) so the net loss is much smaller than you'd think.
- PhasmaFelis 12y ago
  > Who screwed Britain? If you're going to tell me that it was George Soros, I'd like to hear why you're holding him more responsible than e.g. Helmut Schlesinger, or the reporter who paraphrased Schlesinger's quote and sent the market into a panic? As I said elsewhere, there's plenty of blame to go around. Lots of people were complicit, some of them more so than Soros. But Soros is the only one who's commonly held up as some sort of heroic capitalist ubermensch, so he's the one I went after.
loso 12y ago
Soros profited off of a screw up by the British government. And not just one screw up, many if you look at the full history of what happened. I think the British government screwed their people way more than Soros did.
gatehouse 12y ago
The British government might be the least "innocent" institution in existence.
- PhasmaFelis 12y ago
  I was referring to the British taxpayers, not the government.
- btbuilder 12y ago
  You think the British government is the "most guilty" institution in existence? Unless you cling to the idea that eradicated institutions (such as the Third Reich) don't count this seems more than a little harsh.
  - girvo 12y ago
    Well, the British Empire certainly has blood-stained hands, but that's sort of irrelevant to the discussion here (and what country/empire doesn't?)
  - gatehouse 12y ago
    Well just to clarify, I wasn't counting the 3rd Reich since it is "dead", similar for Ghengis Khan and the Romans. To me, guilt is what you've done, innocence is what you haven't done. The British government has done pretty much everything.
  - CocaKoala 12y ago
    Doesn't the phrase "in existence" by definition disqualify institutions which are eradicated and thus don't exist?

bronson 12y ago

And selling bad credit default swaps wasn't a crime either. So, according to your theory, the perpetrators of the last downturn should have sold as many bogus CDS packages as possible, right? Regardless of the damage? I'm happy most people don't subscribe to the same law-defined morals that you seem to.

AndrewBissell 12y ago
If Soros's bet had gone against him, he would have lost all of his investors' money and been left penniless. There would have been no bailout waiting in the wings. The guys selling CDSs they couldn't pay out had none of their own skin in the game, and were profiting from the presence of then implicit (now very EXPLICIT) government backstops. When they lost money, the public was forced to pay through devices like the AIG bailout, TARP, ZIRP, etc. There's no legitimate comparison between the two.
- M2Ys4U 12y ago
  > If Soros's bet had gone against him, he would have lost all of his investors' money and been left penniless. There would have been no bailout waiting in the wings. Well, no. This is explained in the article: If Soros' assumption (that the exchange rate would plummet) hadn't been realised Sterling would've stayed at the lower bound of the ERM and Quantum wouldn't have lost much at all.
  - gabemart 12y ago
    We can have reasonable confidence in that assessment in hindsight. At the time, I would have been unwilling to gamble my net worth against the possibility of some unforeseen event causing a spike in the value of the pound. It was a non-zero risk.
    - VintageCool 12y ago
      Soros clearly had confidence in it. That's why he's the player that won the pot.

MarkPNeyer 12y ago

> you should feel bad for committing crimes, even if it's clear that if you didn't somebody else would i don't think edward snowden should feel bad for what he did, even if it's considered a crime. as for robbing a drunk guy in the gutter, you could argue that you are teaching him a lesson, and that the price of this lesson is the cash he has in his wallet now. it would be a rather aggresive marketing strategy, but hopefully the guy does learn from it. likewise, you could argue that soros breaking the bank of England is him teaching the people of the world a lesson - you can't prop up a currency indefinitely. people like him - folks with lots of money and more desire to earn money than to support practices they think are unsustainable - will prevent governments from pegging rates indefinitely, just as muggers will prevent people from wandering carelessly through parts of town where no one is watching them. i'd like to live in a world where people were more interested in gaining a positive reputation by passing on the chance to profit from destruction, even if it's legal. that wish is exactly like wanting to live in a world where nobody gets mugged: both of those situations are inevitable if omnipresent surveillance takes off. if being caught is a certainty, nobody's going to pick a wallet anywhere. if databases of people's responses to your actions are publicly available, many supporters of government-backed monetary policy - as well as the friends and families of those who suffered from his actions - will shun soros and anyone else who helps knock a tower over because 'it was going to fall anyhow.'

CocaKoala 12y ago
I have no idea what you're saying. You're bringing up Edward Snowden, who has literally nothing to do with the conversation at hand. Then you're proposing some form of defense for the idea of mugging the drunk guy. Then you're shifting right to omnipresent surveillance, which again has nothing to do with what we're talking about. Your comment is utterly incomprehensible to me; I know what all the individual words mean, but I can't put them together into a cohesive thought that's relevant. Can you rephrase yourself in a way that's more understandable?
- PhasmaFelis 12y ago
  > You're bringing up Edward Snowden, who has literally nothing to do with the conversation at hand. That was pretty clearly a response to the line he quoted directly above, i.e. rebutting the notion that an action's morality is solely determined by whether or not that action is classified as a crime.