In the past six months, hedge fund manager George Soros has been an outspoken critic of the economicrecovery.And as the U.S. digests the S&P downgrade, it’s helpful to remember that as Barclays analysts Ajay Rajadhyaksha and Anshul Pradhan put it, The S&P’s action is not a surprise. So to gain a market expert’s view, we’ve gone through many of Soros’ recent interviews and selected his main points.
Soros describes the key arguments the market is dealing with right now and makes predictions on what will happen next.
His quotes are dated in chronological order.
Phi Beta Iota: The original article has photos and more context for each quote. Eleven quotes only are below the line.
February 20, 2011: The Republican party is going to force spending cuts and the extension of the Obama tax cuts and it will have a negative effect on the economy.
February 20, 2011: When QE expires, interest rates are going to go up, which will choke off the recovery.
February 20, 2011: Cutting spending before private demand is stronger will hurt employment.
April 18, 2011: We’re not about to have a replay of 2008.
April 18, 2011: The financial system takes up a very large part of our economy but we haven’t yet decided if that’s a benefit or a detriment.
June 9, 2011: The crisis in which we find ourselves is a failure of the prevailing dogma about markets: the efficient market hypothesis and the rational expectation theory.
June 9, 2011: Financial markets always provide a distorted view of reality.
June 9, 2011: Currently credit-controlling tools are fixed irrespective of the market’s mood. Authorities need to vary margin and capital requirements to control asset bubbles.
June 26, 2011: Weaker euro-region economies will probably have to exit the Euro.
July 12, 2011: The euro crisis was caused by holding European countries responsible for bailing out their own institutions.
July 12, 2011: A Greek default may be inevitable and some contagion in Portugal and perhaps Ireland is unavoidable