Chronicles Of Depression 2.0: #025

The Face of a Prophet

George Soros will not go quietly.

At the age of 77, Mr. Soros, one the world’s most successful investors and richest men, leapt out of retirement last summer to safeguard his fortune and legacy. Alarmed by the unfolding crisis in the financial markets, he once again began trading for his giant hedge fund — and won big while so many others lost.

Mr. Soros has always been a controversial figure. But he is becoming more so with a new, dire forecast for the world economy. Last week he rushed out a book, his 10th, warning that the financial pain has only just begun.

“I consider this the biggest financial crisis of my lifetime,” Mr. Soros said during an interview Monday in his office overlooking Central Park. A “superbubble” that has been swelling for a quarter of a century is finally bursting, he said.

Emphasis added by me.

And:

He envisions a time, not so distant, when the dollar is no longer the world’s main currency and people will have a harder time borrowing money.

Emphasis added by me.

Let me hit Pause here.

Check that sentence again, because it is wrong. It is sloppy journalism.

Reiterating the important — and wrong — bit:

and people will have a harder time borrowing money.

No no no.

Not “people.” Americans.

Now let me hit Rewind to quote sentences I’ve skipped in the sequence:

Mr. Soros thinks that this time he is right. Now in his eighth decade, he yearns to be remembered not only as a great trader but also as a great thinker. The market theory he has promoted for two decades and espoused most of his life — something he calls “reflexivity” — is still dismissed by many economists. The idea is that people’s biases and actions can affect the direction of the underlying economy, undermining the conventional theory that markets tend toward some sort of equilibrium.

Mr. Soros said all aspects of his life — finance, philanthropy, even politics — are driven by reflexivity, which has to do with the feedback loop between people’s understanding of reality and their own actions. Society as a whole could learn from his theory, he said. “To make a contribution to our understanding of reality would be my greatest accomplishment,” he said.

Emphasis added by me.

Pay attention while I parse this.

reflexivity, which has to do with the feedback loop between people’s understanding of reality and their own actions.

Again, we are dealing with a wrong word. This time it is not necessarily poor journalism, but ignorance on the journalist’s part.

Reiterating:

reflexivity, which has to do with the feedback loop between people’s understanding of reality and their own actions.

Emphasis added by me.

The wrong word? “Understanding.” The correct word? Perception.

Perception is a very important thing. Perception is often more important than stark reality. In its worse form, perception subverts and becomes a substitute for reality.

Hence my insistence that this sentence:

and people will have a harder time borrowing money.

is incorrect. That it is we Americans who will suffer the brunt.

Because perception is what will work against us — has been working against us — in the world.

Imagine a German. What attributes come to mind? Frugal, driven, neat, disciplined, rich (for that last point: remember that after the collapse of the Berlin Wall, West Germany basically purchased all of East Germany!).

Imagine a Japanese. Attributes: Hard-working, exotic, smart, perhaps prejudiced (the Japanese believe they are descended from the Sun God; the word “gaijin” is not simply “stranger” or even “foreigner,” it’s actually like calling someone, for instance, a spick, nigger, or cracker).

Now imagine the rest of the world imagining an American. Attributes? Fat, greedy, lazy, stupid, drug addicts. Perhaps even evil. Certainly possessed of an attitude of entitlement towards the rest of the world. A fatal smugness.

Now all three come before a loan officer: A German, a Japanese, and an American.

Which one is going to walk away empty-handed?

Bingo.

Because even though most Americans are just as smart, disciplined, hard-working, and driven as a German or a Japanese, the perception we have allowed to form in the mind of the rest of the world is counter to that.

Now let me rewind again to include some other sentences I’ve skipped in this sequence:

Shortly after that luncheon Mr. Soros began meeting with hedge fund managers like John Paulson, who was early to predict a crisis in the housing market. He interrogated his portfolio managers and external hedge funds that manage his fund’s money, and he took on new positions to hedge where they might have gone wrong. His last-minute strategies contributed to a 32 percent return — or roughly $4 billion for the year.

Emphasis added by me.

Let me reiterate something:

His last-minute strategies contributed to a 32 percent return — or roughly $4 billion for the year.

Soros asked, What are people seeing? Is what they are seeing real? If what they are seeing is distorted by their personal prejudice, what should I be looking at to find out what’s real?

So, on the one hand, there is you, refusing to believe all that I’ve just explicated.

And on the other hand, there is Soros — who made four billion dollars last year.

What percentage of that did you make?

Do you think perhaps your vision could use some improvement?

Further, don’t you think we’d better have the world see us in a different way?

Before it’s irrevocably too late?

Explore posts in the same categories: C.O.A.T. - Belief, C.O.A.T. - Money, C.O.A.T. - Politics, C.O.A.T. - Scams, Depression 2.0

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