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The Crash of 2008 and What it Means: The New Paradigm for Financial Markets
In the midst of one of the most serious financial upheavals since the Great Depression, George Soros, the legendary financier and philanthropist, writes about the origins of the crisis and proposes a set of policies that should be adopted to confront it. Soros, whose breadth of experience in financial markets is unrivaled, places the crisis in the context of his decades of study of how individuals and institutions handle the boom and bust cycles that now dominate global economic activity. In a concise essay that combines practical insight with philosophical depth, Soros makes an invaluable contribution to our understanding of the great credit crisis and its implications for our nation and the world.
288 pages, Paperback
First published January 1, 2008
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1567 people want to read
About the author
George Soros
114 books573 followersGeorge Soros is a Hungarian-American financier, businessman and notable philanthropist focused on supporting liberal ideals and causes. He became known as "the Man Who Broke the Bank of England" after he made a reported $1 billion during the 1992 Black Wednesday UK currency crises. Soros correctly speculated that the British government would have to devalue the pound sterling.
Soros is Chairman of Soros Fund Management, LLC.
As one of history’s most successful financiers, his views on investing and economic issues are widely followed.
Soros is Chairman of Soros Fund Management, LLC.
As one of history’s most successful financiers, his views on investing and economic issues are widely followed.
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Displaying 1 - 30 of 140 reviews
December 7, 2008
The other reviews for this book mostly get it right, so I will not rehash what they have written. I have read the last few books by Soros, and his philosophy takes a while to sink in, but I did not find this book to be overly complex or confusing. Rather, I feel that in explaining the current crisis, Soros's theories on reflexivity, fertile fallacies and his attacks on market fundamentalism are perfectly timed - and if people are serious about a more sophisticated and subtle understanding of the markets, about economics as a social science (which does not conform to immutable rules) and perhaps about man's understanding of reality itself, then Soros's thought will help us toward a new paradigm. I am especially attracted to Soros's thought because it combines two seemingly disparate disciplines (finance and philosophy) and emerges with a novel meta-perspective - drawing from each, yet a discrete and separate entity or pursuit.
November 23, 2010
I was hoping to find an intelligently written response to Forbes' advocacy for free markets in "How Capitalism Will Save Us," but only found the ego of George Soros. His son, Robert, summed him up best, "My father will sit down and give you theories to explain why he does this or that. But I remember seeing it as a kid and thinking, Jesus Christ, at least half of this is bullshit. I mean, you know the reason he changes his position on the market or whatever is because his back starts killing him. It has nothing to do with reason." He used the words "reflexivity" and "super-bubble" like he was churning out articles for Search Engine Optimization (SEO). Sorry Mr. Soros, you are still a failed philosopher.
July 17, 2024
Soros’ unique framework for understanding financial markets is as unorthodox as his approach to social justice; and equally as profound. At times this book gets a little redundant, and many of his theories are more or less working hypothesis’ that he himself is still attempting to fully understand. But I personally believe gaining a bit of his perspective is beneficial to understanding the complexity of market conditions, especially the 2008 sub-prime loan market crash.
Soros may be one of the most misunderstood people of this time. Reading this book helped me understand (at least in a rudimentary way) a little more of his thought process, like why he rejects the concept of market equilibrium, or why he pursues market plays the way that he does.
However, despite how avuncular he is, I think I might like him less than I did going into this. It’s difficult for me to like a guy who profits so much off of shorting America….
Nevertheless, I certainly wouldn’t let my feelings get in the way of learning everything I can from him. However little that might be.
Soros may be one of the most misunderstood people of this time. Reading this book helped me understand (at least in a rudimentary way) a little more of his thought process, like why he rejects the concept of market equilibrium, or why he pursues market plays the way that he does.
However, despite how avuncular he is, I think I might like him less than I did going into this. It’s difficult for me to like a guy who profits so much off of shorting America….
Nevertheless, I certainly wouldn’t let my feelings get in the way of learning everything I can from him. However little that might be.
December 7, 2013
This book was painful to read because of it's all-too-frequent idiocy. He obviously has figured out how to recognize when markets are vulnerable and can be manipulated to the downside, but he isn't a thinker, no matter how much he tries to imitate one. His constant insistence that markets operate according to phenomenon only seen in quantum mechanics at a sub-atomic level is beyond ludicrous. Even if you ignore those theories, he still contradicts himself regularly and his logic is tortured. I only finished reading it because my mother had asked me to discuss it with her afterwards. There are a few insights into the markets that are valuable, but I would recommend getting them from a much better source.
November 6, 2008
This book marks what George Soros promises is his final treatment of the invaluable theory of reflexivity. The New Financial Paradigm is too long by half, yes, and Soros occasionally tries to cram reflexivity into his explanations of unrelated phenomena. But for all that, reflexivity is a wonderful tool that has been both undeservedly dismissed and undeservedly unremarked upon.
The term reflexivity is derived from Romance languages’ transitive and self-referential verbs. Effectively it is derived from, say, Spanish’s ability to express an object taking an act upon itself. Soros said as much in an interview sometime just after his seminal – and this time too long by 2/3 - The Alchemy of Finance, 22 years ago.
Soros’ own attempt at redefining reflexivity in pseudo-epistemological terms in his latest book only confuses thing, unfortunately:
“Reflexivity is a two-way feedback mechanism that affects not only statements (by rendering their truth value indeterminate) but also facts (by introducing an element of in determinacy into the course of events).”
For now, just think, An object taking an act upon itself.
This idea is a really big deal, but it has an (admittedly) imperfect messenger in Soros. He desperately wants to cause a dialogue about his idea and has been fruitlessly trying to do so for a quarter-century at least. Market traders have mostly dismissed it as common sense. Academics have mostly dismissed it as unscientific. Both groups have dismissed it for lacking a predictive value. Both camps are right, to some extent. Soros would agree that his billions of dollars of success in the markets has made reflexivity somewhat ubiquitous for market participants. He would also agree that it is unscientific. Soros has always seen himself as a philosopher, not a scientist.
But what he does with explaining the real-estate bubble that has now dragged the world into a historic financial crisis, the way he uses reflexivity to explain it, is really something to behold:
“The willingness to lend influences the value of the collateral.”
That is exactly inverted. It is a seminal treatment of this crisis. As money becomes cheaper – through a sustained policy of low interest rates – synthetic tools, like mortgages, are promoted to lend the money as rapidly as possible. Once the availability of mortgages outpaces the demand for houses, the demand for houses grows to meet the availability of mortgages; supply begets demand. These two objects act on one another until the demand for houses far outpaces the supply of houses. And home prices spiral upwards. Soon – in a phenomenon like the re-finance boom of years past – the upwards-spiraling value of the collateral (home) takes an affect on the lender’s willingness to do further lending. More lending, then, takes its effect on the supply/demand balance of homes, driving the value of homes (collateral) still higher. And so on.
Reflexivity, in other words, is a thought from bygone days – those which preceded the belief that economics is a science. It has a wonderful descriptive value. But much to Soros’ dismay, it has almost no predictive value. That is, one must already be entrenched in the reflexive scenario before s/he can predict the next event. Reflexivity, in other words, is incapable of predicting starting points. But only a fool dismisses it for that reason. How well, after all, did our litany of “scientific” economics models predict the nationalization of our banking system on September 18, 2008?
In the penultimate chapter of The New Financial Paradigm, Soros returns to the same sort of real-time-trading experiment he used in The Alchemy of Finance (in every way, actually, this book is a return to his first book – and a blessed departure from his loopy political ideas). And this is where the old master fails. Those who like symmetricality aren’t going to like this. But then, those who like symmetricality were scared away from the markets at least eight years ago.
How does he fail? He fails in his bias against the dollar. Soros is long emerging markets – always a dicey proposition – and short U.S. securities and the U.S. currency. Despite aptly predicting a violent credit contraction, Soros has a blind spot for the deflation this must cause. He correctly imagines the deleveraging of the U.S finance sector but somehow misses the consequence that a sudden absence of dollars will have on the value of the dollar. He is too certain that crises always manifest themselves as inflation.
He writes: “The invasion of Iraq has much to do with the rise in the price of oil and the unwillingness of the rest of the world to hold dollars. A recession in the United States and the resilience of China, India, and the oil-producing countries will reinforce the decline in the power and influence of the United States.”
But there he is blinded by his own loopy political ideology and misses the trade perfectly. The credit contraction, as we now know, led to a sudden scarcity of dollars. The value of the dollar raced upwards. The price of a barrel of oil dropped from $143 to 62 in a month. This brought Soros’ oil-producing countries to the precipice of insolvency (1/3 of Venezuela has not had electricity for 50 days).
What comes next? Once Soros realizes how wrong he was and adjusts his model – and he probably has already (this book was published in July) – he will be able to use reflexivity to tell us what will come of the U.S. and emerging-markets countries. We can look forward to his afterword.
The term reflexivity is derived from Romance languages’ transitive and self-referential verbs. Effectively it is derived from, say, Spanish’s ability to express an object taking an act upon itself. Soros said as much in an interview sometime just after his seminal – and this time too long by 2/3 - The Alchemy of Finance, 22 years ago.
Soros’ own attempt at redefining reflexivity in pseudo-epistemological terms in his latest book only confuses thing, unfortunately:
“Reflexivity is a two-way feedback mechanism that affects not only statements (by rendering their truth value indeterminate) but also facts (by introducing an element of in determinacy into the course of events).”
For now, just think, An object taking an act upon itself.
This idea is a really big deal, but it has an (admittedly) imperfect messenger in Soros. He desperately wants to cause a dialogue about his idea and has been fruitlessly trying to do so for a quarter-century at least. Market traders have mostly dismissed it as common sense. Academics have mostly dismissed it as unscientific. Both groups have dismissed it for lacking a predictive value. Both camps are right, to some extent. Soros would agree that his billions of dollars of success in the markets has made reflexivity somewhat ubiquitous for market participants. He would also agree that it is unscientific. Soros has always seen himself as a philosopher, not a scientist.
But what he does with explaining the real-estate bubble that has now dragged the world into a historic financial crisis, the way he uses reflexivity to explain it, is really something to behold:
“The willingness to lend influences the value of the collateral.”
That is exactly inverted. It is a seminal treatment of this crisis. As money becomes cheaper – through a sustained policy of low interest rates – synthetic tools, like mortgages, are promoted to lend the money as rapidly as possible. Once the availability of mortgages outpaces the demand for houses, the demand for houses grows to meet the availability of mortgages; supply begets demand. These two objects act on one another until the demand for houses far outpaces the supply of houses. And home prices spiral upwards. Soon – in a phenomenon like the re-finance boom of years past – the upwards-spiraling value of the collateral (home) takes an affect on the lender’s willingness to do further lending. More lending, then, takes its effect on the supply/demand balance of homes, driving the value of homes (collateral) still higher. And so on.
Reflexivity, in other words, is a thought from bygone days – those which preceded the belief that economics is a science. It has a wonderful descriptive value. But much to Soros’ dismay, it has almost no predictive value. That is, one must already be entrenched in the reflexive scenario before s/he can predict the next event. Reflexivity, in other words, is incapable of predicting starting points. But only a fool dismisses it for that reason. How well, after all, did our litany of “scientific” economics models predict the nationalization of our banking system on September 18, 2008?
In the penultimate chapter of The New Financial Paradigm, Soros returns to the same sort of real-time-trading experiment he used in The Alchemy of Finance (in every way, actually, this book is a return to his first book – and a blessed departure from his loopy political ideas). And this is where the old master fails. Those who like symmetricality aren’t going to like this. But then, those who like symmetricality were scared away from the markets at least eight years ago.
How does he fail? He fails in his bias against the dollar. Soros is long emerging markets – always a dicey proposition – and short U.S. securities and the U.S. currency. Despite aptly predicting a violent credit contraction, Soros has a blind spot for the deflation this must cause. He correctly imagines the deleveraging of the U.S finance sector but somehow misses the consequence that a sudden absence of dollars will have on the value of the dollar. He is too certain that crises always manifest themselves as inflation.
He writes: “The invasion of Iraq has much to do with the rise in the price of oil and the unwillingness of the rest of the world to hold dollars. A recession in the United States and the resilience of China, India, and the oil-producing countries will reinforce the decline in the power and influence of the United States.”
But there he is blinded by his own loopy political ideology and misses the trade perfectly. The credit contraction, as we now know, led to a sudden scarcity of dollars. The value of the dollar raced upwards. The price of a barrel of oil dropped from $143 to 62 in a month. This brought Soros’ oil-producing countries to the precipice of insolvency (1/3 of Venezuela has not had electricity for 50 days).
What comes next? Once Soros realizes how wrong he was and adjusts his model – and he probably has already (this book was published in July) – he will be able to use reflexivity to tell us what will come of the U.S. and emerging-markets countries. We can look forward to his afterword.
June 22, 2022
I guess Soros always wanted to be a philosopher? It’s interesting to hear how he thinks about things but I’m not sure I’m taking any of this as gospel. As his son said in the introduction “most of his best decisions were based upon a back spasm”
November 21, 2008
The first Soros I've read. Very interesting. I like his philosophical take on the machinations of the financial markets. Very timely.
Copious notes:
p. 36 Scientific laws cannot be verified; they can only be falsified. That is the role of testing. Scientific laws can be tested by pairing off initial conditions with final conditions. If they fail to conform to the scientific law in question, that law has been falsified. Statements that are not subject to falsification do not qualify as scientific. One nonconforming instance may be sufficient to destroy the validity of the generalization, but no amount of conforming instances are sufficient to verify a generalization beyond any doubt.
p. 37 Generally speaking, the more an investment thesis is at odds with the generally prevailing view, the greater the financial rewards one can reap if it turns out to be correct. I failed to recognize a flaw in Popper’s concept of open society: that political discourse is not necessarily directed at the pursuit of truth. I believe both Popper and I made these mistakes because of our preoccupation with the pursuit of truth. …we can introduce the pursuit of truth as a requirement for an open society.
p. 39 What Popper took for granted needs to be introduced as an explicit requirement. Popper assumed that the purpose of critical thinking is to gain a better understanding of reality. That is true in science but not in politics. The primary purpose of political discourse is to gain power and to stay in power. Those who fail to recognize this are unlikely to be in power. The only way in which politicians can be persuaded to pay more respect to reality is by the electorate insisting on it, rewarding those whom it considers truthful and insightful, and punishing those who engage in deliberate deception. Without such a commitment, democratic politics will not produce the desired results. An open society can be only as virtuous as the people living in it.
p. 40 The pursuit of truth is important exactly because misconceptions are liable to lead to unintended adverse consequences.
The postmodern approach…treat[s] reality as a collection of often conflicting narratives, it fails to give sufficient weight to the objective aspect of reality.
p. 43 Reality is a moving target, yet we need to pursue it. In short, understanding reality ought to take precedence over manipulating it. As it stands now, pursuit of power tends to take precedence over the pursuit of truth.
p. 55 Buy and sell decisions are based on expectations about future prices, and future prices in turn, are contingent on present buy and sell decisions. To speak of supply and demand as if they were determined by forces that are independent of the market participants’ expectations is quite misleading. Rising prices often attract buyers and vice versa. Even a cursory look at commodity, stock, and currency markets confirms that such trends are the rule rather than the exception.
p. 56 participants act not on the basis on their best interests but on their perception of their best interests, and the two are not identical. Rational expectations theory claims that the market as a whole always knows more than any individual participant—sufficiently so that markets manage to be always right. I have considered this interpretation so far removed from reality that I did not even bother to study it.
p. 57 The crux of reflexivity asserts that market prices can influence the fundamentals. The illusion that markets manage to be always right is caused by their ability to affect the fundamentals that they are supposed to reflect. The change in the fundamentals may then reinforce the biased expectations in an initially self-reinforcing but eventually self-defeating process. More often the prevailing bias corrects itself before it can affect the fundamentals.
p. 74 The belief that markets tend towards equilibrium has given rise to policies which seek to give financial markets free rein. I call these policies market fundamentalism, and I contend that market fundamentalism is no better than Marxist dogma.
p. 75 We must reduce our expectations for the social sciences. We cannot expect reflexive events to be determined according to timelessly valid generalizations when reflexivity contains an element of uncertainty and indeterminacy (uncertainty relates to the participants’ thinking, indeterminacy to the course of events).
p. 159 Reflexivity claims that the ultimate truth is beyond our human reach and explores the role that misconceptions play in shaping the course of events.
further reading: Tivadar Soros, Masquerade: Dancing around death (2001), Charles Morris, the trillion dollar meltdown: easy money, high rollers, and the great credit crash (2008), Karl Popper, the open society and its enemies, George Soros, the alchemy of finance (1987), Michael Kaufman, Soros (2002) George Lakoff, cognitive linguist studies metaphors.
Copious notes:
p. 36 Scientific laws cannot be verified; they can only be falsified. That is the role of testing. Scientific laws can be tested by pairing off initial conditions with final conditions. If they fail to conform to the scientific law in question, that law has been falsified. Statements that are not subject to falsification do not qualify as scientific. One nonconforming instance may be sufficient to destroy the validity of the generalization, but no amount of conforming instances are sufficient to verify a generalization beyond any doubt.
p. 37 Generally speaking, the more an investment thesis is at odds with the generally prevailing view, the greater the financial rewards one can reap if it turns out to be correct. I failed to recognize a flaw in Popper’s concept of open society: that political discourse is not necessarily directed at the pursuit of truth. I believe both Popper and I made these mistakes because of our preoccupation with the pursuit of truth. …we can introduce the pursuit of truth as a requirement for an open society.
p. 39 What Popper took for granted needs to be introduced as an explicit requirement. Popper assumed that the purpose of critical thinking is to gain a better understanding of reality. That is true in science but not in politics. The primary purpose of political discourse is to gain power and to stay in power. Those who fail to recognize this are unlikely to be in power. The only way in which politicians can be persuaded to pay more respect to reality is by the electorate insisting on it, rewarding those whom it considers truthful and insightful, and punishing those who engage in deliberate deception. Without such a commitment, democratic politics will not produce the desired results. An open society can be only as virtuous as the people living in it.
p. 40 The pursuit of truth is important exactly because misconceptions are liable to lead to unintended adverse consequences.
The postmodern approach…treat[s] reality as a collection of often conflicting narratives, it fails to give sufficient weight to the objective aspect of reality.
p. 43 Reality is a moving target, yet we need to pursue it. In short, understanding reality ought to take precedence over manipulating it. As it stands now, pursuit of power tends to take precedence over the pursuit of truth.
p. 55 Buy and sell decisions are based on expectations about future prices, and future prices in turn, are contingent on present buy and sell decisions. To speak of supply and demand as if they were determined by forces that are independent of the market participants’ expectations is quite misleading. Rising prices often attract buyers and vice versa. Even a cursory look at commodity, stock, and currency markets confirms that such trends are the rule rather than the exception.
p. 56 participants act not on the basis on their best interests but on their perception of their best interests, and the two are not identical. Rational expectations theory claims that the market as a whole always knows more than any individual participant—sufficiently so that markets manage to be always right. I have considered this interpretation so far removed from reality that I did not even bother to study it.
p. 57 The crux of reflexivity asserts that market prices can influence the fundamentals. The illusion that markets manage to be always right is caused by their ability to affect the fundamentals that they are supposed to reflect. The change in the fundamentals may then reinforce the biased expectations in an initially self-reinforcing but eventually self-defeating process. More often the prevailing bias corrects itself before it can affect the fundamentals.
p. 74 The belief that markets tend towards equilibrium has given rise to policies which seek to give financial markets free rein. I call these policies market fundamentalism, and I contend that market fundamentalism is no better than Marxist dogma.
p. 75 We must reduce our expectations for the social sciences. We cannot expect reflexive events to be determined according to timelessly valid generalizations when reflexivity contains an element of uncertainty and indeterminacy (uncertainty relates to the participants’ thinking, indeterminacy to the course of events).
p. 159 Reflexivity claims that the ultimate truth is beyond our human reach and explores the role that misconceptions play in shaping the course of events.
further reading: Tivadar Soros, Masquerade: Dancing around death (2001), Charles Morris, the trillion dollar meltdown: easy money, high rollers, and the great credit crash (2008), Karl Popper, the open society and its enemies, George Soros, the alchemy of finance (1987), Michael Kaufman, Soros (2002) George Lakoff, cognitive linguist studies metaphors.
November 4, 2018
As with all the finance books written shortly after the financial crisis, this one has its more forgettable and misguided moments. Written as it was during a time of fear and profound lack of confidence in the system. But George's quite intimate understanding of the machinery, his more philosophical view of things, and his candor about his own failings make this a far more interesting read.
His argument is not one of fear, but a rational analysis of what he sees to be more fundamental issues that underpinned the crisis in the first place. If only, he had raised such concerns earlier as his voice is one of the few who might have been able to sway us from that course with less damage.
His argument is not one of fear, but a rational analysis of what he sees to be more fundamental issues that underpinned the crisis in the first place. If only, he had raised such concerns earlier as his voice is one of the few who might have been able to sway us from that course with less damage.
February 6, 2025
I'm glad I read this, it was primarily interesting as a historical document of one well-placed person's perspective of the crash. At times it was painfully boring and self-aggrandizing, at others it was very sharply insightful and interesting.
April 28, 2021
Liked the philosophy, could be more substantially developed using the space he uses for autobiographical discourse.
did-not-finish
August 22, 2008Maybe it's just me, but this book felt overly complex. I personally believe the true mark of genius is someone who can both understand what is seemingly infinitely complex, while at the same time convey that concept to lay people with ease and in simple terms. George, while likely intelligent (I can't tell, I spent too much time trying to decipher what he was trying to say... and not much time really understanding what he was talking about) either cannot, or chose not to do this. The book is complex in terms of the language, the subject, personally doesn't seem to warrant such complexity. So, I'm not sure if he did this just to 'prove' his intelligence, or because he actually speaks in such a complex manor. In any case, I gave up, I spent more time trying to process the words and sentences instead of the concepts, and to me, I want to learn about the topic, not about the most intellectually significant way of extolling that message...
But like I said, maybe it's just me :) Some people may understand this intellectually 'stimulating' language, and may find the book indispensable. I unfortunately, do not.
But like I said, maybe it's just me :) Some people may understand this intellectually 'stimulating' language, and may find the book indispensable. I unfortunately, do not.
April 12, 2008
I felt let down by this book. At first it gives a good overview and timeline of the current credit crunch (although nothing someone wouldn't have known from reading the paper once and a while over the past 6 months). Then, it delves into Soros's theory of "reflexivity", which attempts to debunk efficient market theory. I was highly disappointed in this section. I didn't think it was convincing at all, which says a lot since I'm not a big believer in efficient markets to begin with! All in all, it seemed to be a very confusing way of saying: emotion can drive markets to excess. I knew this before I started.
August 30, 2019
Russell's paradox in the financial markets
George Soros has forgotten more about finance, economics and trading than most of his critics will ever know. He has made more money than most of his critics put together will ever make. So when George Soros speaks on matters to do with money, I listen, and when he writes a new book, I read it.
When Soros speaks about politics, which he frequently does, I also like to listen. He is a sharp critic of the United States especially under the policies of the Bush administration, as well he should be since we'll be paying for the stupidities of the Bush administration both nationally and internationally for many years to come. But here in this book, he puts aside (for the most part) the political and concentrates on one of his pet ideas, which he calls "reflexivity."
This is the idea that human interactions and the "truth" of those interactions are shaped not only by fundamentals and events in the natural world but by our perception of those events. This might be called the Heisenberg uncertainty principle as applied to the social sciences, markets and interpersonal relationships. The value of a stock is influenced by a feedback loop that is in part based on the perceptions of buyers and sellers. This makes the value of a stock or commodity a moving target forever in flux. As in Russell's self-referential paradox, reflexivity makes it impossible to accurately predict where markets will go, or to predict in principle the direction of human activities. Simply put, there is a quality in economics, the financial markets and like phenomena that is self-referential leading to uncertainty. Soros concludes that markets do not tend toward equilibrium and they are not "efficient" and price fluctuations are not "random walks" away from a "true" value. Finally, he concludes that financial bubbles arise because the self-referential quality of markets is not understood by economists and others in the financial world.
Here's how he puts it more generally at the start of Chapter 1: "…our understanding of the world in which we live is inherently imperfect because we are part of the world we seek to understand." (p. 3)
Soros sees reflexivity as a "two-way feedback loop, between the participants' views and the actual state of affairs. People base their decisions not on the actual situation that confronts them but on their perception or interpretation of that situation." Our decisions, he contends, have dual functions. One is the "manipulative function," the other is the "cognitive function." As we try to understand the world, we also try to manipulate it to our advantage. He notes, "The two functions operate concurrently, not sequentially." This "creates an indeterminacy in both the participants' perceptions and the actual course of events." We are (of course) "obliged to form a view of the world, but that view cannot possibly correspond to the actual state of affairs." We are obliged "to act on the basis of beliefs which are not rooted in reality."(pp. 10-11)
Taking a clue from cognitive psychology, evolutionary psychology and neuroscience, it is clear that we construct (as the postmodernists are wont to remind us) a "reality" within our heads that only approximates the "real" world and is biased by our needs and desires and is limited by both our senses and our ability to make meaning of what we perceive. Soros's reflexivity is in essence putting a name on something that has generally been known (but mostly ignored) for a long time.
A consequence of Soros' view is "the postulate of radical fallibility" which, when applied to financial markets allows one to "assert that, instead of being always right, financial markets are always wrong." (p. 76) As for financial bubbles and what follows, he writes (all in italics for emphasis on page 78), "there has to be both some form of credit or leverage and some kind of misconception or misinterpretation involved for a boom-bust process to develop." Of course he is referring most directly to what he calls "The Current Crisis and Beyond" which is the title of Part II of the book.
In Chapter 7 Soros makes some predictions about what is to come. The last note in the book is dated March 23, 2008. I read through the "outlook," and from the perspective of today (February 13, 2009) it's easy to see that Soros is substantially right. He is not only an expert on international markets but a fine connoisseur of bubbles and the opportunities they present. "Nothing is quite as profitable as investing in an early-stage bubble," he writes. (p. 129)
Soros has a way of saying the obvious that some of his critics have disparaged, but sometimes the obvious is what we overlook. According to his "new paradigm" based on reflexivity, "events in the financial markets are best interpreted as a form of history. The past is uniquely determined, the future is uncertain. Consequently it is easier to explain how the present position has been reached than it is to predict where it will lead." (p. 104)
I would add that this is what economists are quite expert at: telling us what has happened. Guessing what is going to happen is what Soros is very good at.
--Dennis Littrell, author of “The World Is Not as We Think It Is”
George Soros has forgotten more about finance, economics and trading than most of his critics will ever know. He has made more money than most of his critics put together will ever make. So when George Soros speaks on matters to do with money, I listen, and when he writes a new book, I read it.
When Soros speaks about politics, which he frequently does, I also like to listen. He is a sharp critic of the United States especially under the policies of the Bush administration, as well he should be since we'll be paying for the stupidities of the Bush administration both nationally and internationally for many years to come. But here in this book, he puts aside (for the most part) the political and concentrates on one of his pet ideas, which he calls "reflexivity."
This is the idea that human interactions and the "truth" of those interactions are shaped not only by fundamentals and events in the natural world but by our perception of those events. This might be called the Heisenberg uncertainty principle as applied to the social sciences, markets and interpersonal relationships. The value of a stock is influenced by a feedback loop that is in part based on the perceptions of buyers and sellers. This makes the value of a stock or commodity a moving target forever in flux. As in Russell's self-referential paradox, reflexivity makes it impossible to accurately predict where markets will go, or to predict in principle the direction of human activities. Simply put, there is a quality in economics, the financial markets and like phenomena that is self-referential leading to uncertainty. Soros concludes that markets do not tend toward equilibrium and they are not "efficient" and price fluctuations are not "random walks" away from a "true" value. Finally, he concludes that financial bubbles arise because the self-referential quality of markets is not understood by economists and others in the financial world.
Here's how he puts it more generally at the start of Chapter 1: "…our understanding of the world in which we live is inherently imperfect because we are part of the world we seek to understand." (p. 3)
Soros sees reflexivity as a "two-way feedback loop, between the participants' views and the actual state of affairs. People base their decisions not on the actual situation that confronts them but on their perception or interpretation of that situation." Our decisions, he contends, have dual functions. One is the "manipulative function," the other is the "cognitive function." As we try to understand the world, we also try to manipulate it to our advantage. He notes, "The two functions operate concurrently, not sequentially." This "creates an indeterminacy in both the participants' perceptions and the actual course of events." We are (of course) "obliged to form a view of the world, but that view cannot possibly correspond to the actual state of affairs." We are obliged "to act on the basis of beliefs which are not rooted in reality."(pp. 10-11)
Taking a clue from cognitive psychology, evolutionary psychology and neuroscience, it is clear that we construct (as the postmodernists are wont to remind us) a "reality" within our heads that only approximates the "real" world and is biased by our needs and desires and is limited by both our senses and our ability to make meaning of what we perceive. Soros's reflexivity is in essence putting a name on something that has generally been known (but mostly ignored) for a long time.
A consequence of Soros' view is "the postulate of radical fallibility" which, when applied to financial markets allows one to "assert that, instead of being always right, financial markets are always wrong." (p. 76) As for financial bubbles and what follows, he writes (all in italics for emphasis on page 78), "there has to be both some form of credit or leverage and some kind of misconception or misinterpretation involved for a boom-bust process to develop." Of course he is referring most directly to what he calls "The Current Crisis and Beyond" which is the title of Part II of the book.
In Chapter 7 Soros makes some predictions about what is to come. The last note in the book is dated March 23, 2008. I read through the "outlook," and from the perspective of today (February 13, 2009) it's easy to see that Soros is substantially right. He is not only an expert on international markets but a fine connoisseur of bubbles and the opportunities they present. "Nothing is quite as profitable as investing in an early-stage bubble," he writes. (p. 129)
Soros has a way of saying the obvious that some of his critics have disparaged, but sometimes the obvious is what we overlook. According to his "new paradigm" based on reflexivity, "events in the financial markets are best interpreted as a form of history. The past is uniquely determined, the future is uncertain. Consequently it is easier to explain how the present position has been reached than it is to predict where it will lead." (p. 104)
I would add that this is what economists are quite expert at: telling us what has happened. Guessing what is going to happen is what Soros is very good at.
--Dennis Littrell, author of “The World Is Not as We Think It Is”
August 22, 2018
Can we observe the market objectively, being participants as well? What is reflexivity, and why is it a must to understand it? What is George Soros’ long-term scenario for the financial markets? This book consists of two parts: (1) Perspective and (2) The Current Crisis and Beyond. The second part is good. The first is great. For the first time, I believe I understand his thoughts on the two driving forces behind reflexivity. And now, in the current dangerous monetary experiment - it’s obvious why it’s so important to understand, especially for the professional investor. This well written book is a great improvement in explaining his philosophy – far better than the more famous Alchemy of Finance.
George Soros needs no introduction. His accomplishments as a hedge fund manager are legendary, and his philanthropy for “Open Societies” is impressive. But his efforts within Economic Theory have not been successful so far. One of the first chapters is even called “Autobiography of a Failed Philosopher”. One hundred years from now, I would not be surprised if he is mainly remembered as a philosopher. We are moving away from the theory of equilibrium and its stepdaughter, the theory of rational expectations. Complexity Guru Doyne Farmer said recently at a Soros-sponsored Institute for New Economic Thinking seminar in Berlin that economics has not really improved during the last 50 years. But a lot is happening now, and the theory of reflexivity seems to be a part of the journey.
Soros’ philosophical starting point is that our understanding of the world is inherently incomplete because we are part of the world we try to understand. “Reflexivity can be interpreted as a circularity, or two-way feedback loop, between the participant’s views and the actual state of affairs. People base their decisions not on the actual situation that confronts them but on their perception or interpretation of that situation. Their decisions make an impact on the situation (the manipulative function), and changes in the situation are liable to change their perceptions (the cognitive function).”
The new paradigm states that instead of being always right, the financial markets are always wrong. ”The illusion that markets manage to be always right is caused by their ability to affect the fundamentals that they are supposed to reflect. The change in the fundamentals may then reinforce the biased expectations in an initially self-reinforcing but eventually self-defeating process. Of course such boom-bust sequences do not occur all the time. More often the prevailing bias corrects itself before it can affect the fundamentals. But the fact that they can occur invalidates the theory of rational expectations. When they occur, boom-bust processes can take on historic significance.” When does this happen and what can be done? These are the remaining questions for the theory of reflexivity to answer for it to be of great value. Misconceptions of the situation and leverage are probably parts of the answer. But unlike the current paradigm of utopian economics - that tries unsuccessfully to be deterministic like a natural science, based on ridiculous assumptions - the theory of reflexivity does not claim to make predictions in time.
The other part of the book – the current crisis and beyond – is still interesting even though it was written several years ago. Soros focuses on the Housing Bubble and its big brother, the Super- Bubble, which is a cocktail of globalization, liberalization (market fundamentalism) and the ever increasing credit expansion to avoid recessions and banking system risks.
I believe every reader will have second thoughts about their beliefs after they have finished this book. It’s intriguing. George Soros will be remembered as a true free thinker.
George Soros needs no introduction. His accomplishments as a hedge fund manager are legendary, and his philanthropy for “Open Societies” is impressive. But his efforts within Economic Theory have not been successful so far. One of the first chapters is even called “Autobiography of a Failed Philosopher”. One hundred years from now, I would not be surprised if he is mainly remembered as a philosopher. We are moving away from the theory of equilibrium and its stepdaughter, the theory of rational expectations. Complexity Guru Doyne Farmer said recently at a Soros-sponsored Institute for New Economic Thinking seminar in Berlin that economics has not really improved during the last 50 years. But a lot is happening now, and the theory of reflexivity seems to be a part of the journey.
Soros’ philosophical starting point is that our understanding of the world is inherently incomplete because we are part of the world we try to understand. “Reflexivity can be interpreted as a circularity, or two-way feedback loop, between the participant’s views and the actual state of affairs. People base their decisions not on the actual situation that confronts them but on their perception or interpretation of that situation. Their decisions make an impact on the situation (the manipulative function), and changes in the situation are liable to change their perceptions (the cognitive function).”
The new paradigm states that instead of being always right, the financial markets are always wrong. ”The illusion that markets manage to be always right is caused by their ability to affect the fundamentals that they are supposed to reflect. The change in the fundamentals may then reinforce the biased expectations in an initially self-reinforcing but eventually self-defeating process. Of course such boom-bust sequences do not occur all the time. More often the prevailing bias corrects itself before it can affect the fundamentals. But the fact that they can occur invalidates the theory of rational expectations. When they occur, boom-bust processes can take on historic significance.” When does this happen and what can be done? These are the remaining questions for the theory of reflexivity to answer for it to be of great value. Misconceptions of the situation and leverage are probably parts of the answer. But unlike the current paradigm of utopian economics - that tries unsuccessfully to be deterministic like a natural science, based on ridiculous assumptions - the theory of reflexivity does not claim to make predictions in time.
The other part of the book – the current crisis and beyond – is still interesting even though it was written several years ago. Soros focuses on the Housing Bubble and its big brother, the Super- Bubble, which is a cocktail of globalization, liberalization (market fundamentalism) and the ever increasing credit expansion to avoid recessions and banking system risks.
I believe every reader will have second thoughts about their beliefs after they have finished this book. It’s intriguing. George Soros will be remembered as a true free thinker.
October 16, 2018
Interesting book in many ways. It is Soros' attempt to gain further recognition for his theory of Reflexivity first outlined in The Alchemy of Finance by applying to the financial crisis as it unfolded in the 2008. Not only does Soros attempted not to narrate the events and their causes, but also their implications, which as his own theory makes clear, are inherently unknowable. In many ways he is holding himself to account by setting down his thoughts - this in itself should be applauded (few, apart from Dalio, do this in such a public way).
The most valuable part of the read is some insight into the thought process of Soros as he attempts to construct a coherent outlook - ranging from financial markets to geopolitics. His analysis and insight here in many ways is unique (indeed he plays up the point that he has been an outsider for most of his career), for example his view of the view Russia has with the West: "The West made hardly any efforts or sacrifices to implant Western values in Russia; it merely used the weakness of Russia to extend its sphere of influence further to the East. This is a historical fact that has left an inedible mark on Russian attitudes but it is not recognized in the West."
Any one looking for this book as a insight into trading is probably better to look elsewhere - apart from outline the general macro themes of his trade, there is very little on how to choose, size and manage trades. There are a few nuggets though like: "Nothing is quite as profitable as investing in an early-stage bubble."
The upside of the book is also probably something that is goes against it - it is a wide-ranging discourse on various topics. This breadth means that it certain points are glossed over, especially relating to the technical points that led to and played out during the crisis. In fact Soros modestly acknowledges this by saying that he is not an expert in derivatives, but I have a sneaking suspicion that for a man of his intelligence that most of the things that most of us mere mortals require explanation are obvious for him. This seems to be a theme that pervades most of the topics of that Soros covers.
In conclusion - the The Crash of 2008 and What it Means is a deeply complex book - part recount of a speculator, part philosophical treatise, sprinkled with geopolitical analysis. It is a rewarding read for those who invest the time - in many places it gets quite dense (some parts required re-reading). Hard to recommend for one looking to broaden their knowledge in a specific category. Found myself with more questions and lines of inquiry to follow after finishing it. But I have a sneaking suspicion that that's what Soros intended.
The most valuable part of the read is some insight into the thought process of Soros as he attempts to construct a coherent outlook - ranging from financial markets to geopolitics. His analysis and insight here in many ways is unique (indeed he plays up the point that he has been an outsider for most of his career), for example his view of the view Russia has with the West: "The West made hardly any efforts or sacrifices to implant Western values in Russia; it merely used the weakness of Russia to extend its sphere of influence further to the East. This is a historical fact that has left an inedible mark on Russian attitudes but it is not recognized in the West."
Any one looking for this book as a insight into trading is probably better to look elsewhere - apart from outline the general macro themes of his trade, there is very little on how to choose, size and manage trades. There are a few nuggets though like: "Nothing is quite as profitable as investing in an early-stage bubble."
The upside of the book is also probably something that is goes against it - it is a wide-ranging discourse on various topics. This breadth means that it certain points are glossed over, especially relating to the technical points that led to and played out during the crisis. In fact Soros modestly acknowledges this by saying that he is not an expert in derivatives, but I have a sneaking suspicion that for a man of his intelligence that most of the things that most of us mere mortals require explanation are obvious for him. This seems to be a theme that pervades most of the topics of that Soros covers.
In conclusion - the The Crash of 2008 and What it Means is a deeply complex book - part recount of a speculator, part philosophical treatise, sprinkled with geopolitical analysis. It is a rewarding read for those who invest the time - in many places it gets quite dense (some parts required re-reading). Hard to recommend for one looking to broaden their knowledge in a specific category. Found myself with more questions and lines of inquiry to follow after finishing it. But I have a sneaking suspicion that that's what Soros intended.
June 4, 2017
Не съм чела другите книги на Сорос, но след тази мисля, че знам как биха звучали. Най-вероятно той пак ще е намесил своята теория. Самата теория се нарича теория на рефлексивността и не е открита от самия него, по-скоро той я доразвива, може и да се каже и разпространява поради известността на самия автор. Изразява се в това, че съществува рефлексивна връзка между възприятието и реалността, тоест участниците в дадена ситуация действат според нея, но те също така се опитват да я разберат и да й влияят и така манипулират ситуацията или събитията. Следователно участниците в събитията винаги грешат, защото никога не могат да разберат напълно ситуацията и техните гледни точки никога не отговарят на действителното състояние на нещата и така не може да се постигне равновесието, което предполага икономическата теория. С две думи, онези две линийки на търсенето и предлагането и общата икономическа теория може да се окажат безполезни.
Вероятно всеки, който си има малко понятие от икономика, се е съмнявал в перфектната теория на равновесието, която е с две думи too good to be true. Но и всеки разбира, че всичките предположения, които я правят идеални, са по-скоро за да се опрости и да се правят изводи по-лесно. И в крайна сметка, за мен тя наистина работи. И то не само в идеалния свят с изолираните други фактори.
Сорос май не успява да се аргументира много добре. Макар че теорията се нуждае от минимална защита. Естествено, че инвеститорите взимат решенията си въз основа на наблюденията си върху пазара, естествено, че поради невъзможността да разполагат с цялата информация, която им е нужна, винаги малко или много грешат. И естествено, че от друга страна, не само пазарът влияе на решенията им, но и техните решения влияят на пазара и т.н.
Това, което ме подразни, когато четох тази книга, беше всеобхватната приложимост на неговата теория на рефлексивността. Със същия успех книгата можеше да е за съвсем различно явление (а не финансовата криза), обяснено пак със същата тази теория, която дори не ми звучи като откритие.
Вероятно всеки, който си има малко понятие от икономика, се е съмнявал в перфектната теория на равновесието, която е с две думи too good to be true. Но и всеки разбира, че всичките предположения, които я правят идеални, са по-скоро за да се опрости и да се правят изводи по-лесно. И в крайна сметка, за мен тя наистина работи. И то не само в идеалния свят с изолираните други фактори.
Сорос май не успява да се аргументира много добре. Макар че теорията се нуждае от минимална защита. Естествено, че инвеститорите взимат решенията си въз основа на наблюденията си върху пазара, естествено, че поради невъзможността да разполагат с цялата информация, която им е нужна, винаги малко или много грешат. И естествено, че от друга страна, не само пазарът влияе на решенията им, но и техните решения влияят на пазара и т.н.
Това, което ме подразни, когато четох тази книга, беше всеобхватната приложимост на неговата теория на рефлексивността. Със същия успех книгата можеше да е за съвсем различно явление (а не финансовата криза), обяснено пак със същата тази теория, която дори не ми звучи като откритие.
January 20, 2024
The book spends an outsized amount of time on Soros's idea of the "theory of reflexivity", which if removed probably could have shortened the book by half, hence only three stars. This "theory" can probably be succinctly be summed up as markets are inefficient due to the components moving due to the self-reinforcing biases of the participants. However, he continually opaquely re-defines this "theory", which blurs whatever message he's trying to convey. He claims that his theory is obviously correct and should become a new paradigm, in place of efficient market theory or evolutionary economics. Despite the lack of clarity, he also continually complains that his ideas have been ignored in favor of these established ideas. His theory is more of a anti-theory against efficient markets or any other theory for that matter, than does it stand on its own. Without ever formalizing it into a model, as he never does, it is incomprehensible how he expects it could ever be used practically.
The most interesting parts of the book were the very beginning where the causes of the crash were summarized and the latter chapters where he talks about how he saw the economy before and after the crash. These latter chapters on how he saw the world going forward were then followed up with an update written a year or so later where he discussed what he got right and wrong. I found this one of the high points.
The most interesting parts of the book were the very beginning where the causes of the crash were summarized and the latter chapters where he talks about how he saw the economy before and after the crash. These latter chapters on how he saw the world going forward were then followed up with an update written a year or so later where he discussed what he got right and wrong. I found this one of the high points.
January 13, 2022
As an institutional allocator investing billions of dollars for a dozen years in both alternatives and traditional money managers, I have had the opportunity to meet with thousands of very successful money managers Carl Icahn, Dan Och, Stephen Schwartzman, Barry Rosenstein, Leon Cooperman, Howard Marks, just to name a few. In other words, I know a great money manager when I meet one. George Soros is without question, the best macro manager to ever step face on this planet and possibly the best money manager ever. As a macro manager myself, although I never met him, I have always considered him a mentor through osmosis.
Over the years, I have read many books written by and/or about George Soros, Alchemy of Finance, Ahead of the Curve, etc. and now the Crash of 2008. Although the Alchemy of Finance was the first book of his that I read and my first introduction to his Reflexive Theory of Economics, the Crash of 2008, to me, really conveyed how wicked smart George truly is, the insight he provides into the weaknesses and strengths of the global financial markets is mind boggling. I always knew he was a great investor and speculator but until I read this book I had no idea how knowledgeable he is/was of the inner workings of the capital markets. After reading this book, I have concluded George Soros is without question in a league of his own!
Over the years, I have read many books written by and/or about George Soros, Alchemy of Finance, Ahead of the Curve, etc. and now the Crash of 2008. Although the Alchemy of Finance was the first book of his that I read and my first introduction to his Reflexive Theory of Economics, the Crash of 2008, to me, really conveyed how wicked smart George truly is, the insight he provides into the weaknesses and strengths of the global financial markets is mind boggling. I always knew he was a great investor and speculator but until I read this book I had no idea how knowledgeable he is/was of the inner workings of the capital markets. After reading this book, I have concluded George Soros is without question in a league of his own!
September 17, 2025
A very interesting read, especially in Soros’s comparison between the theory of market equilibrium and his own concept of reflexivity. His philosophical framing adds depth to what is often treated as purely mechanical market behavior.
The book offers a rare inside view of his trading ideas leading up to the 2008 crisis—such as being short developed economies, long emerging markets, and short 10-year Treasuries. While I wish he had included more of these tactical examples, I understand the proprietary limitations.
His macro views are not only insightful but also practical tools for identifying future bubbles. Soros goes further by proposing regulatory frameworks and philosophical principles to help prevent systemic failures amd Moral hazard.
The personal dimension is also compelling: his challenging upbringing, including his family’s need to forge documents to survive, adds weight to his worldview. We’re also exposed to his father’s wartime memoirs, which enrich the narrative with historical and ethical context. "I became somebody out of Nobody"
All in all, it’s a brief yet informative piece of literature—part memoir, part market theory, and part policy reflection—that helps us think more critically about financial systems and their fragility.
The book offers a rare inside view of his trading ideas leading up to the 2008 crisis—such as being short developed economies, long emerging markets, and short 10-year Treasuries. While I wish he had included more of these tactical examples, I understand the proprietary limitations.
His macro views are not only insightful but also practical tools for identifying future bubbles. Soros goes further by proposing regulatory frameworks and philosophical principles to help prevent systemic failures amd Moral hazard.
The personal dimension is also compelling: his challenging upbringing, including his family’s need to forge documents to survive, adds weight to his worldview. We’re also exposed to his father’s wartime memoirs, which enrich the narrative with historical and ethical context. "I became somebody out of Nobody"
All in all, it’s a brief yet informative piece of literature—part memoir, part market theory, and part policy reflection—that helps us think more critically about financial systems and their fragility.
October 25, 2018
Difficult reading at best. I could not understand the technical and theoretical portions of it and ended up skimming and speed reading most of it. I had expected it to be what the title stated: an analysis of the crash of 2008 and what it means for the American people. Instead it turned out to be a continuation and explanation of his first book, The Alchemy of Finance, with details about his Theory of Reflexivity.
The book was in three parts: (1) background including various economic theories and a brief autobiography of Soros, (2) causes of the crash of 2008, including the housing bubble and subprime loans, (3) explanation of the crash of 2008 and what Soros would have done if he were in charge.
Not for lay people - seems to be intended for economists, Wall Street professionals, and financial experts. For a better understanding of the crash of 2008 see the PBS Frontline show, Inside the Meltdown.
The book was in three parts: (1) background including various economic theories and a brief autobiography of Soros, (2) causes of the crash of 2008, including the housing bubble and subprime loans, (3) explanation of the crash of 2008 and what Soros would have done if he were in charge.
Not for lay people - seems to be intended for economists, Wall Street professionals, and financial experts. For a better understanding of the crash of 2008 see the PBS Frontline show, Inside the Meltdown.
December 29, 2024
An okay assessment of the global economy post 2008. Soros is at least consistent with his critique of market fundamentalism, and has some good ideas with his theory of reflexivity. The markets assessment is also on point a lot of times. The last star is lost for me in two ways: one, that he does seem a bit repetitive at times and not that readable. And two, much like the China Study book, he's a bit too dismissive of other perspectives, labeling looking into them a waste of time, and sometimes for wholly personal reasons (he didn't go through mathematics so he doesn't have much respect for mathematical models - fine, but having an opinion on something one is not learned on is not really that strong of an opinion). Otherwise the book is a nice quick read, which also helps the score for me.
August 20, 2017
Anyone as successful as him is worth reading about, but his economic theory was not sufficiently fleshed out and was difficult to understand. Still in all, it was worth reading. He used this information which he developed through 40 years of investing to accumulate over 25B in assets, primarily by not following the precepts of traditional economics, realizing the principal of reflexivity, that similar to quantum mechanics, the presence of investors impacts economic equilibrium. The book was published in mid 2008 and made very accurate predictions of what was about to occur in September 2008.
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August 16, 2022It's a nice book, explaining the 2008 bust. And goes on to make some pretty good predictions about what's to come in the future. The brilliant mind of George Soros is quite accurate about the big picture of the future events.
It's recommended to read The Alchemy Of Finance: Reading The Mind Of The Market before reading this one. This will help the reader get the context about the author theory of reflexivity.
It's recommended to read The Alchemy Of Finance: Reading The Mind Of The Market before reading this one. This will help the reader get the context about the author theory of reflexivity.
December 20, 2024
Surprisingly mediocre book. The underlying idea of reflexivity (and corresponding assumptions like radical fallibility) are deeply interesting both in and of themselves and with regard to financial markets. Soros, however, struggles to comprehensively explain his theory of reflexivity and at times leaves the reader very confused. One gets the sense that Soros himself is rather confused by his theory, and, to his credit, he admits as much a few times throughout the book.
The application to politics seems rather forced as well.
The application to politics seems rather forced as well.
October 4, 2022
I read /The New Paradigm for Financial Markets: The Credit Crisis of 2008 and What It Means/, by George Soros:
https://www.youtube.com/watch?v=r8pUZ...
I was surprised that so much of this book was philosophy and not financial markets... but markets are, of course, driven by human fear and greed, and thus the philosophy and psychology and sociology of markets and their human participants is relevant.
https://www.youtube.com/watch?v=r8pUZ...
I was surprised that so much of this book was philosophy and not financial markets... but markets are, of course, driven by human fear and greed, and thus the philosophy and psychology and sociology of markets and their human participants is relevant.
June 10, 2020
Soros knows about macroeconomics better than anyone I've ever seen. He uses this book as a way to explain his theory of how the markets work and at the end explains what he thinks the outcome of the 2008 crash will be. His theory of how markets work is good at a high level but I would like more explanation of how one can put his theory into practice.
March 18, 2017
I suspect Soros was aspired to be a politician. This book discusses less about money, but more on how to understand the world around us by taking the Global Meltdown in 2008 as an example. Reflexivity is the word.
PostScript: There is a chapter dedicated on his political aspiration in Russia.
PostScript: There is a chapter dedicated on his political aspiration in Russia.
December 27, 2018
Finishing this book was a difficult task in itself. The language is overly complicated and complex to comprehend. Repeating one idea over 30 times in a book doesn't make any sense. Moreover this is something that almost everyone knows already. Not wasting my time on this anymore.
May 9, 2019
Regardless of his politics, which I disagree with, there is no doubting Soros' financial markets knowledge. The lessons from this book have still not been absorbed by the financial community. This does not bode well for the next financial crisis, which will be even worse than 2008.
January 25, 2022
What I learned:
- Reflexivity Theory;
- The time Soros almost broke the bank of England;
- A really good overview on the 2008 financial crisis;
- Theory of boom and bust cycles.
- Opens the door to behavioral economics. Contains a really good mix of philosophy and economics.
- Reflexivity Theory;
- The time Soros almost broke the bank of England;
- A really good overview on the 2008 financial crisis;
- Theory of boom and bust cycles.
- Opens the door to behavioral economics. Contains a really good mix of philosophy and economics.
This entire review has been hidden because of spoilers.
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