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| The New Paradigm for Financial Markets: The Credit Crisis of 2008 and What It Means | 
 enlarge | Author: George Soros
Publisher: PublicAffairs
Category: Book
List Price: $22.95
Buy New: $12.50
You Save: $10.45 (46%)
New (49) Used (13) from $12.49
Avg. Customer Rating:  56 reviews
Sales Rank: 234
Media: Hardcover
Number Of Items: 1
Pages: 208
Shipping Weight (lbs): 0.7
Dimensions (in): 7.6 x 5.4 x 0.8
ISBN: 1586486837
Dewey Decimal Number: 332.0973
EAN: 9781586486839
ASIN: 1586486837
Publication Date: May 5, 2008
Availability: Usually ships in 1-2 business days
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| Customer Reviews:
 Soros at his best October 2, 2008
6 out of 8 found this review helpful
Don't buy this book if you're looking for an in depth analysis of the credit burst. There are many other books out there with depth. Buy this book if you love (or curios about) what one, if not the GREATEST MIND IN THE MARKETS, thinks currently (well, with a bit of delay).
ON REFLEXIVITY; Soros finally explains his philosophy of reflexivity clearly. He 'failed' in his book Alchemy of Finance and left millions of readers like me puzzled. That's already worth the price of the book. He offers his philosophy as an alternative for the market equilibrium theory. Hence the titel of the book. A new pardigm.
THE SUPER BUBBLE HYPOTHESIS; short and to the point, Soros explains his hypothesis. he sees two bubbles: the super bubble and the real estate bubble. get ready, it's gonna be nasty.
Soros shows some major mistakes been done in the financial system, the consequences, and potential solutions. Simply Soros at his best.
 Good for Some Light Reading May 26, 2008
5 out of 8 found this review helpful
This book was pretty short, so whether you end up liking it or not, it's not like you will have wasted much time in reading it.
Basically, George Soros is just explaining his perception of the economy as a linear, historical process rather than a series of cycles. I think he is trying to say that history does not repeat itself. My explanation may not be the greatest, but that's what I got out of it...
I think if you really want to know what is going to happen in the next year, don't expect too much from this particular book. On the other hand, if you are interested in gaining some perspective, understanding a different viewpoint, and maybe learning a few basics about the elements of finance and economics relevant to the credit crisis, it is a good book to read. It doesn't matter if you are a staunch Republican and can't stand George Soros' politics (I am most definitely not a Liberal, by the way). It will still provide some food for thought, and it would be a shame for political alignment to prevent any intelligent readers out there from reading a different point of view without getting upset.
Conclusion: read it to learn and gain perspective, not for economic forecasting.
I give 3 stars because it was pretty interesting, but not life-altering.
dave July 15, 2008
5 out of 13 found this review helpful
3 stars because well written. Get inside the mind of the man who is attempting to destroy America. Or rather talk America into self destruction. A man who grew up under and understands propaganda. Founds and Funds the newest best propaganda organization in america (Moveon.org).
This man states in this book that facts don't matter. It's only what people believe that matters. This is true right up until the tyrant seizes control of all power. It is true right up until the other speculators looses all their money. Soro's made his fortune in the futures markets.
This is Mr. Soro's 'Mien Koff' ("My Struggle" referring to the book by Adolph Hitler; 'Mien Koff')
I recommend this book because you should read the words and attempt to understand your enemies.
 Soros Gets Two Thumbs Up September 24, 2008
5 out of 5 found this review helpful
I recommend Soros' "The New Paradigm for Financial Markets: The Credit Crisis of 2008." He's the back out of retirement billionaire hedge fund mogul who brought down the English pound and is blamed for the Malaysian economy's demise during the Asian economic crisis. His calling card is exploiting currency arbitrage opportunities. I recommend this book for two reasons: First, he is a smooth and elegant writer, which is nice if you appreciate the English language and a readable book. Second, he really writes on a secondary market problem, which is the real problem since it is huge due to the world of derivatives. You may need Investopedia to help translate some of what he describes, then again, you may not. As an added bonus, Soros delivers his philosophy on the markets and confirms what many already know - perception is reality and it is unpredictably dynamic. Most people understand the problem on Main Street: 6.5 million foreclosures by 2012 and $2 trillion in credit losses. Few understand the bigger problems coming from Wall Street that is closer to $40 or $50 trillion in size. The U.S. economy is $14 trillion in size. Soros helps make these matters clear. This is not reading for the faint of heart with a cup of hot chocolate in warmed hands. This is scotch and water on the rocks reading.
Peter Hebert
Author of Mortgaged and Armed
www.MortgagedAndArmed.com
Difficult Reading, but Worth It! June 16, 2008
4 out of 5 found this review helpful
The "bad news" about George Soros is that he wants to be known as a philosopher, and fills "The New Paradigm for Financial Markets" with arcane language in that pursuit. The "good news" is that the book is worth plowing through.
Soros opens with "This is the worst crisis since the Great Depression," and goes on to explore its origins and implications. Soros sees the housing bubble as not merely another bubble bursting, but also the end of a "super-bubble" that has covered the last 25 years or so. This super-bubble is caused by a prevailing credit expansion, accompanied by the Fed bailing out investors one crisis after another (creating a moral hazard), along with an increasingly laissez-faire market environment. Globalization further encouraged the super-bubble as the U.S. (via IMF and World Bank positions) forced developing nations to adhere to cyclical policies while bending the rules for itself - thus creating a higher-yielding haven in the U.S. for investors in those nations. Reagan-era deficits also served as a source of credit expansion. Still another was the new financial instruments and greater use of leverage by banks and hedge funds.
The housing bubble had its origins in the late 2000 bursting of the Internet bubble, followed by 9/11. The Federal funds rate went from 6.5% to 1% (7/03); for 31 consecutive months the base short-term rate was negative. The bubble was also fueled by new vehicles to keep positions off balance sheets and shift risks to eg. pension and mutual funds. Meanwhile, rising home values boosted asset values on banks' balance sheets, prompting them to loan more. Prices rose still further, etc., etc.
Half of GDP growth in the first half of 2005 was housing related (includes indirect effect of spending cash from refinanced mortgages). Forty percent of homes purchased in 2005 were investments or 2nd homes. Since income growth during that period was anemic, loans required increasingly strained ingenuity to qualify those involved. Complex mortgage-protection deals reached $43 trillion (1.5% margin requirements), vs. a U.S. stock market capitalization of $18.5 trillion, U.S. treasuries only $4.5 trillion; obviously the "protection" was superficial at best. Collapse of the housing bubble is now leading to an increasingly unwillingness of other nations to continue holding dollars.
Why the repetitive bubbles? Soros contends that financial markets are not perfect - in fact, they are usually wrong. The problems began in the '70s when defense conglomerates saw their earnings falling with the end of the Vietnam War, so they used their then still high-multiples to acquire other firms, creating the ILLUSION of sustainable earnings growth. Eventually the acquisitions required to sustain the growth were too large to pass even a limited perception of reality; at the same time, accounting shenanigans began coming to light, a recession loomed, and it all collapsed. Basically the same thing with REITs - accompanied by ever relaxation of lending and regulatory standards, and expansion of loan-to-value ratios, LTCM, international markets (Russian Ruble, Mexican Peso, etc.).
Soros confuses his discourse with an extended discussion of "reflexivity" - a term he never well defines, though I sense he means the trend-following habits of speculators. Alternatively, the "bigger fool" theory is a much simpler and similar explanation, though not as inclusive.
A brief review of Soros' investments over the years suggests he has made billions investing on the front-end of over-shooting bubbles, and shorting their similarly over-reacting down-sides.
Where do we go from here? Soros believes that credit conditions have been relaxed so far it is difficult to see how they could continue as such. (However, he also admits being wrong in the past, and also sees printing more money as an option. The latter, however, is somewhat inhibited by existing popular outcries against rising oil prices and other commodities - especially food.) He also believes regulatory authorities need to prohibit financing mechanisms that are beyond basic comprehension. The 2008 market will go below 2007's low. About 40% of subprime loans and ARMs will default over the next 2+ years - housing prices will need to decline over 20% to clear the market, and government intervention is essential. Unfortunately, Soros does not comment on what would happen if Asian and Arab states stop holding dollars.
What's Soros doing now? He's short on U.S. and European stocks, U.S. ten-year government bonds, and the dollar; long on Chinese, Indian and Gulf States stocks (even though he sees them as overvalued) and non-US currencies (China's in particular seems guaranteed to rise).
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