Sorosian Hunches

SOROSIAN HUNCHES
BY
DAVID ARTHUR WALTERS

Once upon a time George Soros was the young Hungarian man named Schwartz Gyorgy who spoke Esperanto fluently because his dad taught it. He was the tyke renamed George Soros, purportedly to hide his Jewish roots. He was the teenager who assumed a Christian identity, avoided the extermination of 500,000 Hungarian Jews, and survived the Communist and Nazi house-to-house battle over Budapest. He was the youth who defected from the Communist regime while attending an Esperanto youth congress, and got a degree from the London School of Economics. He was the man who headed for America with a Wall Street career and Professor Popper’s metaphysical science of scientific uncertainty in mind, the very man who eventually made four-thousand percent on his quantum-leaping Quantum Fund, ringing up a net worth of several billions of dollars in ten years flat. He is the bubble man who thrives on punctured bubbles, the man who profits on market manias and panics, he is the man who capitalizes on the wild swings or extreme disequilibrium of free markets and then philanthropically plunges a goodly portion of the plunder into propagating the political-economic reform of the system that made him rich.

Needless to say, but we repeat it again and again to reinforce the inspiring notion that almost any poor slob can get filthy rich in America if he really wants to, George has done awfully well with his hunches. He is the boom-bust-cycle man, the bubble punctuator who, for example, allegedly broke the Bank of England and ran the Malaysian and Thai currencies into the ground. He is the man who bragged about doubling his money on the mortgage-trust bust among many other things exemplary of the consequences of human fallibility. And he is the man who recently scooped up $4,000,000,000 on the housing crisis. In fact, he considers the current mortgage meltdown and foreclosure run up to be indicative of the biggest financial crisis of his lifetime, hence much more is to be made if the capitalist system does not completely collapse for want of appropriate regulation of animal instincts. In that case, no doubt the great market alchemist would turn the dross of civilization’s ruination into gold.

George has lost a lot of dough too, and his fat lady has yet to sing her aria; but we do not expect him to crash and burn given his fabulous fortune, which would be impossible to personally spend, especially given his age. He is giving hundreds of millions away to propagate liberal causes; perhaps he should turn his entire fortune over to Open Society Incorporated for the salvation of the world from the depredations of the regressive neoconservative faction – perchance Open Society Incorporated could buy its own continent one day. Yes, it is true that the doom he predicted for 1998 did not come about, but he is predicting doom again; given his record, we doubt that his hunch is probably wrong. What are we cattle to do? Stampede into the Great Depression? May Open Society Incorporated save us!

We know George makes his big hauls on radical, short-term moves. Cattle are directed to invest for the long run, dollar-cost-averaging along the way; yet in the long run each and every one of us in fact doomed, so why not go for broke now? Sure, we may gradually pile up a fortune for our old age, for our kids and grandkids, and for charitable works. A certain Canadian gentleman has seats on several exchanges, seats that he keeps, he says, simply to keep up with what is going on while he looks for investment opportunities that he and his clients can salt away for their kids. He does not try to outwit the market as a whole, but looks for particular opportunities he understands. Fine, but the sharp incline of the S-curve and the anarchic irrationality of free-marketers gives us cause to believe that the apocalypse is nigh, that the last of Toynbee’s civilizations is about to bite the dust. We are doomed all the more if there is no god nor gods to appease; if there is one or more of them, we had better find better rituals.

Let Doom be damned! Liberal-minded, nonjudgmental people have little faith in the domination of Dom or in Dom’s Doom or in redemption. Still, we like the excitement of periodic bloodbaths that cleanse the channels for the compound growth of our personal investments, so let the lion eat his predecessor’s cubs and plant his own. We want to make a big crop with a little seed if not get something for nothing. Others want to make a fast buck by all means, including risking everything. After all, the average return is boring. The fixed point or soul of a stable equilibrium is death. It does not exist among the living, and its existence after death is highly unlikely despite the ancient absurdity of ultimate skepticism, to the effect that nothing exists because nothing is permanent. So let life swing from mania to panic while we study the psychology of crowds and wonder when the market will break and where the inflation will go next.

Enter George Soros to take advantage of volatility, the speculator’s best friend. Anybody can have a hunch. We should not rely on hunches without the benefit of a great deal of water under the bridge and numerous imaginative exercises in respect to what the future might bring. He reflects a great deal before having a hunch that things are reflexively overvalued or undervalued by the elite, who ride herd on the manic-depressive market until paranoia mounts, shots are randomly fired, and the crowd stampedes from delusions of grandeur to delusions of persecution. He runs with the cattle until his animal instinct informs him that the lowing herd is about to run off the wall of worry, and then he scoops up a lion’s portion of the kill.

Back spasms are reportedly the reflex that moves George to place his bets. They must be a symptom of his intuition, a subconscious judgment on his considerable experience and education if not a transcendental revelation from the money-god. Let us not underestimate the potential of the human brain mounted on the economic animal; surely a randomly walking monkey could not chalk up as many wins as George. Nor should we overestimate the workings of the marvelously complex biological brain: he may be enjoying a rather long lucky streak. Almost every extraordinarily successful person takes a bow to Lady Luck or Bon Fortuna after giving standard lip-service to the virtues of hard work and long hours. And many hard-working traders prosper because they know what they are doing, and their knowledge is sometimes a hunch in some hysterical form, such as a back spasm or itching palm. Any one of them might have been George Soros, but they did not take his place on the curve, and for good reason: their fate was not his.

George has said that he is not to blame for the downfalls, for if he had not taken his position someone else would have enjoyed the windfalls from the punctured bubbles. Now he is not the man who jumped off the Brooklyn Bridge at midnight on New Year’s Eve because only 85 had jumped before he arrived, and he wanted to obey the so-called law of averages, which stated that 86 people on the average jump off the bridge annually. No, George was pushed off the bridge, not to plummet fatally but to catch the updraft and circle far above the madding Wall Street crowd. The cause of his success is, in a word, Fate. Perchance George Soros would contest the circular argument that he is the world’s greatest speculator because he is the world’s greatest speculator, which in effect is to say that the effect is the cause, but that is his problem, not ours. That is not to say that we discount his acumen or begrudge him his fate; we celebrate both.