The New Paradigm for Financial Markets
also by george soros
The Age of Fallibility: The Consequences of the War on Terror The Bubble of American Supremacy: The Cost of Bush’s War in Iraq George Soros on Globalization Open Society: Reforming Global Capitalism The Crisis of Global Capitalism: Open Society Endangered Soros on Soros: Staying Ahead of the Curve Underwriting Democracy Opening the Soviet System The Alchemy of Finance: Reading the Mind of the Market
GEORGE SOROS
The New Paradigm for Financial Markets
the credit crisis of 2008 and what it means
PublicAffairs
n e w yo r k
Copyright © 2008 by George Soros. Published in the United States by PublicAffairs™, a member of the Perseus Books Group. All rights reserved. Printed in the United States of America. No part of this book may be reproduced in any manner whatsoever without written permission except in the case of brief quotations embodied in critical articles and reviews. For information, address PublicAffairs, 250 West 57th Street, Suite 1321, New York, NY 10107. PublicAffairs books are available at special discounts for bulk purchases in the U.S. by corporations, institutions, and other organizations. For more information, please contact the Special Markets Department at the Perseus Books Group, 2300 Chestnut Street, Suite 200, Philadelphia, PA 19103, call (800) 810-4145, x5000, or email special.markets@perseusbooks.com.
text set in janson text
Cataloging-in-Publication Data is available from the Library of Congress. ISBN 978-1-58648-683-9 (hardback) ISBN 978-1-58648-684-6 (e-book)
first edition
1 3 5 7 9 10 8 6 4 2
Contents
Introduction Setting the Stage
vii xiii
Part One: Perspective
1. The Core Idea 2. Autobiography of a Failed Philosopher 3. The Theory of Reflexivity 4. Reflexivity in Financial Markets 3 12 25 51
Part Two: The Current Crisis and Beyond
5. The Super-Bubble Hypothesis 6. Autobiography of a Successful Speculator 7. My Outlook for 2008 8. Some Policy Recommendations...