George Soros’s latest prediction
Billionaire investor and fund manager, George Soros, was interviewed by Bloomberg Television’s Francine Lacqua on Thursday, January 21, 2016, at the World Economic Forum being held in Davos, Switzerland.
The investment community has ardent followers of Soros’s market opinions. They have enough reason to be. The founder and Chairperson of Soros Fund Management has a net worth of $24 billion. He is also credited with correctly predicting the United Kingdom’s devaluation of the pound in 1992, the rise of Germany’s mark after 1989, and the Japanese stock plunge of 1989. His most recent prediction is associated with the idea that we’re currently heading toward a repetition of 2008.
The subprime crisis of 2008–2009 shook the United States and the world (ACWI) (VEU) economy at large. What started with a housing market collapse left the United States in a major recession. It’s been seven years, and the US economy (SPY) (IWM) (QQQ) and its housing market haven’t recovered fully. This is despite the Federal Reserve’s monetary policy initiatives, including an asset-purchase program and zero-bound interest rates.
“We are repeating 2008,” says Soros
According to Soros, global markets are currently facing a crisis reminiscent of the 2008 market collapse. There are certain factors that make Soros believe that we’re repeating 2008. Points of similarity he sees between 2008 and now include:
- a financial crisis, see Why Is the US Economy Broke? for more perspective
- a bear market, check out Plunge in US Stock Market Increases Demand for Safe Havens
What’s different this time?
However, there is something different this time. In 2008, the root cause of the bear market was the subprime crisis in America. Now, the root cause is China (YINN).