© CNNGeorge Soros
We are not in a recovery. What we are witnessing right now is the creation of a speculative bubble of epic proportions and that bubble is going to burst. We've been saying this for some time now, but when a major player like George Soros, a billionaire investor known for positioning himself on the right side of a risky trade starts actively betting against the U.S. stock market trouble is brewing.
Soros has recently purchased 1.3 billion dollars worth of put options on the S&P 500. Some have tried to down play this as merely hedging, but putting everything on one single position (the decline of the S&P) looks more like a calculated gamble than a conservative hedging strategy.
Of course Soros probably isn't going to come right out and tell us what he's up to, but his comments in a recent blog post hinted at the fact that he sees the danger of a repeat of the 2008 crash (though he claims the slowdown in China is the biggest danger).
Maybe Soros is wrong, maybe the bubble will keep on inflating for a bit longer, but keep in mind that in 1992 he made a billion dollars by betting against the pound in what later came to be known as black Wednesday.
Sources:
Soros doubles down on his bearish bet: http://blogs.marketwatch.com/thetell/2014/02/17/soros-doubles-a-bearish-...
Is the recovery over? : http://www.theguardian.com/business/2014/feb/23/has-uk-economic-recovery...
Soros and his billion dollar win in his bet against the British pound in 1992: http://en.wikipedia.org/wiki/Black_Wednesday
From The Guardian - This is no recovery, this is a bubble - and it will burst: http://www.theguardian.com/commentisfree/2014/feb/24/recovery-bubble-cra...
If Soros is thinking of cutting and running away with a pile of wealth, he's sadly mistaken.
If he truly believes that what he is doing is right, he would not abandon his ship with passengers still on board.
Let's see what George Soros is really made of.