作者: George Soros
副标题: The Credit Crash of 2008 and What It Means
ISBN: 9781586486839
页数: 162
定价: $22.95
出版社: PublicAffairs
装帧: Hardcover
出版年: May 19, 2008
the current crisis marks the end of an era of credit
expansion based on the dollar as the international reserve
currency. The periodic crises were part of a larger boombust
process; the current crisis is the culmination of a superboom
that has lasted for more than twenty-five years.
p3 On the one hand people seek to understand
the world in which they live. I call this the cognitive
function. On the other, people seek to make an impact on the
world and change it to their advantage. I used to call this the
participating function, but now I consider it more appropriate
to call it the manipulative function.*
p7 This brings me to the central idea in my conceptual
framework: I contend that social events have a different
structure from natural phenomena. In natural phenomena
there is a causal chain that links one set of facts directly with
the next. In human affairs the course of events is more complicated.
Not only facts are involved but also the participants’
views and the interplay between them enter into the causal
chain. There is a two-way connection between the facts and
opinions prevailing at any moment in time: on the one hand
participants seek to understand the situation (which includes
both facts and opinions); on the other, they seek to influence
the situation (which again includes both facts and opinions).
The interplay between the cognitive and manipulative functions
intrudes into the causal chain so that the chain does not
lead directly from one set of facts to the next but reflects and
affects the participants’ views. Since those views do not correspond
to the facts, they introduce an element of uncertainty
into the course of events that is absent from natural
phenomena. That element of uncertainty affects both the
facts and the participants’ views. Natural phenomena are not
necessarily determined by scientific laws of universal validity,
but social events are liable to be less so.(Soros seems learn a lot from quantum theory)
p10 Reflexivity can be interpreted as a circularity, or 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. 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 two functions operate
concurrently, not sequentially. If the feedback were sequential,
it would produce a uniquely determined sequence leading
from facts to perceptions to new facts and then new
perceptions, and so on. It is the fact that the two processes
occur simultaneously that creates an indeterminacy in both
the participants’ perceptions and the actual course of events.
This way of looking at reflexivity will be particularly useful,
as we shall see, in understanding the behavior of financial
markets. Whether we speak of a circularity, or a feedback
mechanism, is a matter of interpretation; but the two-way interaction
is real. The circularity is not an error of interpretation;
on the contrary, it is the denial of a circularity that is the
error. The theory of reflexivity seeks to correct that error.
p15 I was having a snack at a Lyons
Corner House, and after paying for my food I had no money
left. “I have touched bottom,” I told myself, “and I am bound
to rise. This will be a valuable experience.”
p59 One of my early successes as a hedge fund manager was in
exploiting the conglomerate boom that unfolded in the late
1960s. It started when the managements of some high-technology
companies specializing in defense recognized that the
prevailing growth rate their companies enjoyed could not be
sustained in the aftermath of the Vietnam War. Companies
such as Textron, LTV, and Teledyne started to use their relatively
high-priced stock to acquire more mundane companies,
and, as their per-share earnings growth accelerated,
their price-earnings multiples, instead of contracting, expanded.
They were the path breakers. The success of these
companies attracted imitators; later on, even the most humdrum
company could attain a higher multiple simply by going
on an acquisition spree. Eventually, a company could
achieve a higher multiple just by promising to put it to good
use by making acquisitions.(an important chapter)
p62 This method is inappropriate to mortgage trusts because the price
that investors are willing to pay for the shares is an important
factor in determining the future course of earnings. Instead
of predicting future earnings and valuations separately, we
should try to predict the future course of the entire initially
self-reinforcing but eventually self-defeating process.(Price decided by process,important)
p65 The Boom-Bust Model
Using the conglomerate boom as my model, I devised a
typical boom-bust sequence. The drama unfolds in eight
stages. It starts with a prevailing bias and a prevailing trend.
In the case of the conglomerate boom, the prevailing bias
was a preference for rapid earnings growth per share without
much attention to how it was brought about; the prevailing
trend was the ability of companies to generate high earnings
growth per share by using their stock to acquire other companies
selling at a lower multiple of earnings. In the initial
stage (1) the trend is not yet recognized. Then comes the period
of acceleration (2), when the trend is recognized and
Reflexivity in Financial Markets 65
reinforced by the prevailing bias. That is when the process
approaches far-from-equilibrium territory. A period of testing
(3) may intervene when prices suffer a setback. If the bias
and trend survive the testing, both emerge stronger than
ever, and far-from-equilibrium conditions, in which the normal
rules no longer apply, become firmly established (4).
Eventually there comes a moment of truth (5), when reality
can no longer sustain the exaggerated expectations, followed
by a twilight period (6), when people continue to play the
game although they no longer believe in it. Eventually a
crossover point (7) is reached, when the trend turns down
and the bias is reversed, which leads to a catastrophic downward
acceleration (8), commonly known as the crash.
p96 In a not-so-strange coincidence,
the United States developed a chronic current account
deficit in the Reagan years. The deficit has continued
to grow ever since, and it reached 6.6 percent of GDP in the
third quarter of 2006. The American consumer became the
motor of the world economy.
p109 I belong to the first generation of
hedge fund managers. There was not more than a handful of us
when I started.
p119 Alan Greenspan did inveigh against the “irrational
exuberance” of the stock market in December 1996
but did not go beyond words and stopped talking about it
when his words did not have the desired affect. Greenspan
had a more profound understanding of the economic processes
than most experts, and he knew how to use the manipulative
function in expressing his views. I was impressed by his
forward-looking, dynamic approach, which stood in sharp
118 The New Paradigm for Financial Markets
*The Federal Reserve focuses on so-called core prices, excluding energy and
food.
contrast to the static, rearview-mirror assessment of European
central bankers. He can be faulted, however, for allowing
his Ayn Rand–inspired political views to intrude into his
conduct as chairman of the Federal Reserve more than
would have been appropriate. He supported the Bush tax
cuts for the top 1 percent of the population and argued that
the budget deficit should be reduced by cutting social services
and discretionary spending. And keeping federal funds
at 1 percent longer than necessary could have had something
to do with the 2004 elections. Responsibility for the real estate
bubble can be justly laid at his feet.(soros still sing for Greenspan)
p126 renminbi ran own way from soros' prediction.
p130 (early bubble)There is a long
queue of companies whose managers are eager to get rid of
state ownership, and they do not want to see the process interrupted.
Nothing is quite as profitable as investing in an
early-stage bubble.
I visited China in October 2005, and although I was no
longer actively making investments, I saw greater opportunities
there than at any time in my career. The Chinese economy
had been growing at better than 10 percent a year over
the past decade, but corporate earnings were not keeping
pace with growth, and, after the initial euphoria that is characteristic
of newly established stock markets, stocks had been
in a bear market for the preceding four years. The government
had just announced a scheme whereby all state-owned
shares would become tradable within twenty-four months. I
My Outlook for 2008 129
saw the opportunity of a lifetime, but I was not willing to go
back into active money management, and I could not find a
suitable Chinese partner. We did put some money to work in
China, but, as always in these cases, not enough. The Shanghai
index has risen by more than 400 percent since then.
p208 the trading process on March,2008
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