Economic depression possible, says George Soros
By staff writers and wires
November 14, 2008 11:50am
and chairman of Soros Fund Management, has warned that the economy could enter a depression.
Testifying before a US Oversight and Government Reform Committee hearing on the financial crisis, Mr Soros said "a deep recession is now inevitable and the possibility of a depression cannot be ruled out."
Mr Soros, who reportedly earns more than $100,000 an hour as a hedge fund manager, said the large, high-risk hedge funds will be "decimated" by the financial crisis.
The 78-year old, made famous by his market know-how and support of decriminalizing drugs, predicted hedge funds will loose up to 75 percent of their assets.
"I fully anticipated the worst financial crisis since the 1930s,'' said Mr Soros, whose fund is flat this year.
"But frankly, what has happened in the last eight weeks exceeded my expectations.''
It is impossible to stop market bubbles forming, said Mr Soros, who made billions speculating on global markets.
However bubbles can be kept within "tolerable bounds", and it should be government's responsibility to prevent future bubbles becoming too big, he said.
Mr Soros urged President-elect Barack Obama to make regulating finance a priority, so all new financial products would be approved by regulators.