Showing posts with label Global financial crises. Show all posts
Showing posts with label Global financial crises. Show all posts

Friday 14 April 2017

Warren Buffett's actions in the 2007 - 2008 financial crisis

2007-08 financial crisis

Buffett ran into criticism during the subprime crisis of 2007–2008, part of the recession that started in 2007, that he had allocated capital too early resulting in suboptimal deals.   "Buy American. I am." he wrote for an opinion piece published in the New York Times in 2008.  Buffett called the downturn in the financial sector that started in 2007 "poetic justice".   Buffett's Berkshire Hathaway suffered a 77% drop in earnings during Q3 2008 and several of his later deals suffered large mark-to-market losses.


  1. Berkshire Hathaway acquired 10% perpetual preferred stock of Goldman Sachs.  
  2. Some of Buffett's put options (European exercise at expiry only) that he wrote (sold) were running at around $6.73 billion mark-to-market losses as of late 2008.   The scale of the potential loss prompted the SEC to demand that Berkshire produce, "a more robust disclosure" of factors used to value the contracts. 
  3. Buffett also helped Dow Chemical pay for its $18.8 billion takeover of Rohm & Haas. He thus became the single largest shareholder in the enlarged group with his Berkshire Hathaway, which provided $3 billion, underlining his instrumental role during the crisis in debt and equity markets.


In 2008, Buffett became the richest person in the world, with a total net worth estimated at $62 billion by Forbes and at $58 billion by Yahoo, overtaking Bill Gates, who had been number one on the Forbes list for 13 consecutive years.  In 2009, Gates regained the top position on the Forbes list, with Buffett shifted to second place.

  • Both of the men's values dropped, to $40 billion and $37 billion respectively—according to Forbes, 
  • Buffett lost $25 billion over a 12-month period during 2008/2009.


In October 2008, the media reported that Buffett had agreed to buy General Electric (GE) preferred stock.  The operation included special incentives: 
  • He received an option to buy three billion shares of GE stock, at $22.25, over the five years following the agreement, and 
  • Buffett also received a 10% dividend (callable within three years). 
In February 2009, Buffett sold some Procter & Gamble Co. and Johnson & Johnson shares from his personal portfolio.

In addition to suggestions of mistiming, the wisdom in keeping some of Berkshire's major holdings, including The Coca-Cola Company, which in 1998 peaked at $86, raised questions. Buffett discussed the difficulties of knowing when to sell in the company's 2004 annual report:

  • That may seem easy to do when one looks through an always-clean, rear-view mirror. 
  • Unfortunately, however, it's the windshield through which investors must peer, and that glass is invariably fogged.


In March 2009, Buffett said in a cable television interview that the economy had "fallen off a cliff ... Not only has the economy slowed down a lot, but people have really changed their habits like I haven't seen". Additionally, Buffett feared that inflation levels that occurred in the 1970s—which led to years of painful stagflation—might re-emerge.

Tuesday 6 September 2016

Stay Rational in the Downturn


There's been a bloodbath in the markets lately. Investors, banks, and investment banks are all trying to stay afloat in a sea of red ink.
Forgetting about the happier, more bullish times is easy to do when circumstances turn against us, but we must do our best to stay calm. To keep your cool as a rational investor, here are a few wise words to remember when dealing with the stock market's ups and downs.

It happens, even to the best investorsYou can easily feel isolated when you're handed huge losses, but even the best investors falter.
Charlie Munger, now vice chairman of Berkshire Hathaway (NYSE: BRK-A  ) (NYSE: BRK-B  ) , ran an investment partnership called Wheeler, Munger & Co. back in the '60s and '70s. Munger's partnership performed admirably and trounced the indexes. However, in the brutal bear markets of 1973 and 1974, it recorded back-to-back annual losses of 31.9% and 31.5%, compared with losses of 13.1% and 23.1% for the Dow.
Wheeler, Munger & Co. persevered. It returned 73.2% in 1975, and Munger went on to become a billionaire with Berkshire Hathaway. I'm skipping the interim details, but the moral of the story is: Just because you're sitting on a big loss doesn't make you a horrible investor.

Some losses are temporaryAn article in the latest issue of Barron's noted that private-equity firm Warburg Pincus remains committed to its capital infusion of $500 million into besieged bond insurer MBIA (NYSE: MBI  ) , even though its cost basis will be about $31 per share, compared with the current trading price of around $11.43 per share.
In the article, a Warburg spokesperson pointed out that the firm's early '90s investment in Mellon Bank -- now part of the Bank of New York Mellon (NYSE: BK  ) -- also rang up a sharp loss before it turned into a huge gain.
Time will tell whether Warburg's patience will be rewarded. It's worth noting that successful firms and investors draw a sharp distinction between temporary and permanent losses of capital.
Bill Ackman, a prominent bear on the other side of MBIA trade, feels the same way about differentiating between temporary and permanent losses. His large stake in Target (NYSE:TGT  ) plummeted as investors dumped recession-prone stocks.
However, Ackman pegs Target's worth, given its valuable underlying real estate, credit card receivables, and strong cash flows, at $120 per share, and on Bloomberg.com he said that Target "is a case actually where I think a mark-to-market loss is not a real loss." In other words, as long as an investment thesis remains intact, Ackman doesn't consider a stock that's down because of short-term market movements is a permanent loss.
Look for buying opportunitiesIf the stock market will make us suffer huge losses, the least we can do is take advantage of the great prices. If you've ever wondered how Warren Buffett does what he does, one crucial factor is when he does it.
During the banking crisis of the early '90s, when everyone else was running for the exits, investors such as Buffett and Prince Alwaleed made fortunes buying huge stakes in ailing banks, including Wells Fargo (NYSE: WFC  ) and Citigroup (NYSE: C  ) . When everyone else was dumping stock, the smart guys were looking to buy.
Foolish thoughtsKeeping your composure isn't easy when the stock market plummets. However, Fools need to stay rational and composed to make the most of a temporarily bad situation.


http://www.fool.com/investing/value/2008/01/22/stay-rational-in-the-downturn.aspx


Comment:  Warren Buffett "timed" his buying of the market during the Global Financial Crisis.  He asked the public to buy in October 2008 when the Lehman collapsed.

Wednesday 27 May 2015

Global Financial Crisis: Documentary on Why the World Faces Financial Meltdown





Published on Oct 5, 2014
http://www.learncurrencytradingonline... This documentary shows why we face a global financial crisis and looks at past financial meltdowns such as 2008 and before to show we face a global financial meltdown again in the future, The documentary is one of the best at looking at the causes of stock market crashes and explaining why another is probably inevitable - what are the solutions? Well there are easy solutions but Governments and central banks are ignoring them and leading the global economy into crisis - a frightening look at what could happen in the near future in the global economy. Debt is to high, banks are run in a reckless fashion all encouraged by the central banks and governments.

Tuesday 9 April 2013

Not doing anything differently: Buffett (16.11.2009)



Uploaded on 16 Nov 2009
Warren Buffet, chairman and CEO, Berkshire Hathway, has faith in his long standing value investing philosophy

Wednesday 12 September 2012

The stock markets of Singapore, US, Mexico and Sweden are above their 2007 highs

This chart shows different countries and their struggle with the bounce back from the Great Financial Crisis.
The chart shows the performance of 30 markets as measured by MSCI indexes, and of the MSCI All Country World Index, which includes all markets MSCI classifies as developed or emerging.




Click to enlarge

The X Axis shows how deep the plunge for the countries. As you can see the ones who was best insulated was Japan at –50% and the worse Ireland at > –80%
The Y Axis shows the returns since the market top in Oct 2007. Only 4 countries including Singapore and US is positive. The amazing thing was the PIIGS are still at 2009 doldrums.


Thursday 14 June 2012

The European debt crisis explained: The debt levels around the globe are unprecedented in peacetime.





The European debt crisis explained: The debt levels around the globe are unprecedented in peacetime.

The odds of restructurings and/or defaults are higher than most believe. When does debt become unsustainable? The video shows the debt levels of numerous countries have reached "problem" levels. Since the bill coming due in the form of maturing bonds is so large, policymakers in Europe have no easy way out.

"Solutions" may include printing money to create inflation or debt restructurings/defaults; or a combination of the two. 

Chris Ciovacco of Ciovacco Capital Management compares healthy markets to the current state of affairs.
Which investments tend to perform well during deflation/defaults/restructurings?
Which investments tend to perform well during periods of inflation/money printing by central banks?
What is a back-door bazooka?





 A breakdown of the European debt situation, starting with Greece and consuming the entire continent.

Wednesday 18 January 2012

Fear of Investing

Fear of Investing

My father's generation viewed investing as speculation. I'm afraid that same state of mind is back.

By Fred W. Frailey, Editor
From Kiplinger's Personal Finance magazine, January 2009


The real tragedy of the market meltdown we went through in 2008 has scarcely been addressed.

Yes, there really is something worse than standing helplessly by as your savings are depleted by forces over which you have no control. Those of you who have patiently invested in your future retirement all these years, you'll get by. What went down will eventually bob back up. It's our sons and daughters -- my term for the people who are now too scared to invest -- that I'm worried about.

My dad was truly a child of the Great Depression. He finished high school in Kansas in 1928 and college in 1932. Pop was as traumatized by the stock-market crash as everyone else, waiting more than 30 years to become an investor. My father's generation viewed investing as speculation.

Flight to safety

I'm afraid that same state of mind is back. Investors today are fleeing the stock market. Net redemptions from stock mutual funds for the 12 months ended November 3 totaled $245 billion, reports TrimTabs Investment Research. That all but erased the net inflow of money into stock funds in 2006 and 2007. TrimTabs foresaw another $48 billion leaving stock funds in November.

The money is going primarily into money-market funds (which earn almost nothing), CDs (which don't earn you much) and under mattresses. Even bonds are too hot to touch.

You may wonder, given how volatile and ugly the stock market has been lately, what's so bad about a flight to safety. You may even have taken that leap yourself. If such is the case, answer me this: What will be your cue to get back in? Do you ever plan to get back in? And just how do you expect to achieve your financial goals now?

Twice in late 2007, I tried flights to safety in my stock-trading account. Each time that I went to cash, I was soon lured back into stocks. So much for my market timing. I question whether you can do any better. You'll either be drawn in by the first decent rally or still be waiting on the sidelines two years after the bottom for some definitive sign that the coast is clear. If you have an investing plan that made sense a year ago, before this whirlwind began, you should stick with it.

Sidelined

I suspect a lot of people, having been burned by two ferocious bear markets in less than a decade, would reject that advice. They're out and they're staying out. But 80 years of experience tells us that stocks provide the best long-term returns. I believe that more than I do the doomsayers. This is still a great country, working through its problems, and we'll emerge a lot better off for having done so. When will that be? Perhaps sooner than you think.

The last question -- reaching your financial goals from this point forward -- is the biggie. I imagine your goals haven't changed. Achieving them without the long-term help of the stock market is like driving a car on a flat tire or piloting a 747 on one jet engine. In other words, you may get where you're going, but you'll arrive shaken up or in a cold sweat. If you now regard stocks the way my father once did, you had better double or triple the amount you once put aside because you'll need to buy bales of CDs.


Read more: http://www.kiplinger.com/magazine/archives/2009/01/fred_frailey.html#ixzz1jp2ANnsF

Saturday 23 October 2010

How the GFC pushed businesses to the wall

Chalpat Sonti
October 22, 2010

Just how badly, or well, businesses survived the global financial crisis and other economic turmoil of the past two years is evident from new official figures.

Australian Bureau of Statistics data shows in the two years from June 2007 - encompassing the boom and subsequent bust - more than half a million Australian businesses shut up shop.

Nationwide,there was a 73.6 per cent survival rate in the two years, with the number of businesses falling from 2.07 million to 1.52 million.

In Western Australia, about 57,000 businesses, including 10,100 new businesses, were forced to the wall.

That is an attrition rate of 28.3 per cent of all new businesses in the period, but the figures also tell a tale of two distinct years.

In June 2007, there were 211,000 businesses with an ABN and registered for GST in the state. One year later, just before the economy headed south, that had dropped to about 178,000.

A further year on, the number was about 154,000, an overall survival rate of 73.1 per cent.

The public administration and safety sector was the worst performer, with a survival rate of 65.3 per cent. The mining industry saw a 76.5 per cent survival rate, while health care and social assistance did best, at 81.2 per cent.

The number of small businesses (up to 20 employees) fell 24,931 nationally in the period, with more than 80 per cent of the fall occurring during the worst of the financial crisis, in 2008-09.

Most of the fall was in businesses employing between one and four people.

But federal shadow parliamentary secretary for small business Scott Ryan said the national drop in small business numbers was worrying on other future fronts.

"Small business is the economy's canary, a key leading indicator," Mr Ryan said.

"The (federal) Labor government's stubborn intention to saddle small business with extra costs such as the superannuation levy increase and the paperwork burden of being a 'pay clerk' for (a) flawed parental scheme will only ensure this worrying trend worsens in coming years."

Meanwhile shadow small business minister Bruce Billson has confirmed his intention to introduce a private members bill which would see Centrelink take over the running of the government's proposed parental leave scheme.

As it stands, Centrelink will fulfil that role for the first six months of the scheme, before the responsibility for much of the scheme falls to employers.

They will be required to distribute the payments under the scheme to staff, after being forwarded the money by Centrelink.

"Despite strong objection from every corner of this continent, from Gladstone to Esperance and from every organisation that has any concern whatsoever about the compliance and red tape obligations on businesses large and small, the government seems to steadfastly want to persist in imposing this pay clerk obligation... on employers, despite the fact that it has offered no compelling reason for doing so," Mr Billson told Parliament on Wednesday night.

He will need the support of independents or the Greens to make the changes to the scheme, due to start at the beginning of next year.

It will see eligible parents receive the minimum wage ($569.90 a week) for 18 weeks.


http://www.smh.com.au/small-business/how-the-gfc-pushed-businesses-to-the-wall-20101022-16wrx.html

Monday 10 May 2010

Comeback of the Year? Try Corporate Profits

May 7, 2010
Comeback of the Year? Try Corporate Profits
By PAUL J. LIM

THE market remains worried about plenty of things — including a sharp decline late last week, and the spreading debt crisis in Europe. But, recently, it has appeared that investors are ready to strike one item off their list of concerns: corporate profits.

“To say that earnings so far have been off the charts would not be too much of an exaggeration,” said Robert C. Doll, global chief investment officer for equities at BlackRock, the investment management firm.

Of the companies in the Standard & Poor’s 500-stock index that have announced first-quarter results, 77 percent have beaten Wall Street earnings forecasts. And profits for the quarter are on track to grow 56 percent compared with the 2009 period.

These earnings reports, however, started to arrive just as the market has shifted from confidence to much uncertainty.

From Feb. 8 to April 26, the S.& P. 500 gained 15 percent, largely in anticipation of an improved earnings and economic outlook. But the downgrading of Greece’s debt and fears that the crisis may be spreading throughout the region and the world have taken center stage, sending the market tumbling more than 8 percent. Concerns about Europe notwithstanding, many analysts have already begun ratcheting up their forecasts for stocks for the rest of this year.

Still, it’s important to remember that earnings season isn’t over, so it’s premature to proclaim complete victory on the profit front.

Stuart A. Schweitzer, global market strategist at J.P. Morgan Private Bank, noted, “Where the jury is still out is on the sustainability of this upswing, because companies had been achieving improvements in profits largely by slashing costs.”

He added, “Without increased revenues, it would be hard to imagine companies moving from cost-reduction to spending mode and hiring mode.”

So far, sales for the S.& P. 500 have also been stronger than analysts anticipated. Of the 437 that have reported earnings, 66 percent had revenue growth exceeding analysts’ expectations, according to Thomson Reuters.

But the news isn’t all positive. For one thing, revenue surprises pale in comparison with profit surprises. Companies are beating Wall Street profit forecasts by 15 percent but beating revenue projections by just 0.8 percent.

And not all companies are reporting revenue growth. The casino operator MGM Mirage said revenue fell 4 percent in the first quarter versus the 2009 period. And Sara Lee, the food giant, said quarterly sales fell 2.5 percent.

David A. Rosenberg, chief economist and strategist at Gluskin Sheff & Associates, the investment manager in Toronto, said that if figures from just one sector — financial services — were excluded, revenue of S.& P. 500 companies would be just about meeting expectations.

To be sure, analysts’ forecast for first-quarter sales growth is 11 percent — nothing to sneeze at.

“The interesting thing is how much of the good earnings news is coming from the banking and financial sector,” said David C. Wright, managing director of Sierra Investment Management.

He pointed out that this sector, which was hit hardest in the financial crisis, has been a big beneficiary of government stimulus. That ranges from mortgage relief efforts and the government purchase of “toxic” mortgage-backed securities to the recent Fed policy of near-zero short-term interest rates.

Because these efforts can’t continue forever, he said, “I can’t conclude that we’re seeing anything resembling a self-sustaining recovery.”

IF the improved outlook for the financial sector is indeed spreading to the broader economy, he said, an uptick could be expected in commercial and industrial loan activity.

But according to the Federal Reserve Bank of St. Louis, commercial and industrial bank loans nationwide have fallen every month between October 2008 and March 2010, the latest period for which data is available.

For now, at least, Mr. Schweitzer of J.P. Morgan says he is optimistic. “You know that saying that half a loaf is better than none? At this point,” he said, “I’m willing to take a quarter of a loaf.”

But such patience won’t last indefinitely. For evidence of a full recovery, investors will need to keep checking corporate reports through the end of this earnings season — and, quite likely, well into the second quarter.

Paul J. Lim is a senior editor at Money magazine. E-mail: fund@nytimes.com.

http://www.nytimes.com/2010/05/09/business/09fund.html?ref=business

Thursday 1 April 2010

The Role of Hedge Funds in Financial Crise


The Role of Hedge Funds in Financial Crises – Stephen Brown Google

On October 2, the U.S. announced a Hearing on Regulation of  scheduled for Thursday, November 13, 2008. The focus is on the causes and impacts of the financial crisis on Wall Street, and the Committee will hear from  who have earned over $1 Billion.
The underlying premise of these hearings was expressed by Dr. , the  of Malaysia, who wrote on September 26 “Because of the extraordinary greed of American financiers and businessmen, they invent all kinds of ways to make huge sums of money. We cannot forget how in 1997-98 American  destroyed the economies of poor countries by manipulating their ”. The Prime Minister is recognized as an authority on the role of  in , given his experience managing the  as it engulfed his nation in September  ago. He is particularly critical of the role of  who will in fact be invited to testify before the House Committee at their November hearing.
It is perhaps too early to write about the causes and consequences of the current financial crisis while the storm still rages. However, it is not too early to examine the history of the earlier financial crisis. During the 1990s, according to the  had been investing steadily into . There was a net  of about US$20 billion into the region over and above portfolio and direct investment, up until 1995 and 1996 when the amount increased dramatically to US$45 billion per annum. Then with the collapse in both the Baht and the Ringgit in 1997, there was a sudden  of US$58 billion. It was self-evident to the central bankers in the region that the collapse in the currency had everything to do with an attack on the currencies of the region by well-financed international speculators. As Dr. Mahathir observed in a Wall Street Journal opinion piece that was published on September 23, 1997: “We are now witnessing how damaging the trading of money can be to the economies of some countries and their currencies. It can be abused as no other trade can. Whole regions can be bankrupted by just a few people whose only objective is to enrich themselves and their rich clients…. We welcome foreign investments. We even welcome speculators. But we don’t have to welcome share- and financial-market manipulators. We need these manipulators as much as travelers in the good old days needed highwaymen”. What was most remarkable about this statement was that its premises and its conclusion were immediately accepted by the international community, despite the fact that Dr. Mahathir did not provide any evidence to support his analysis of the role of  in the Asian financial crisis.
The first premise of Dr. Mahathir’s argument is that  act in concert to destabilize global economies. This is at best a misapprehension of the definition of a “hedge fund”. There is no such thing as a well defined hedge fund strategy or approach to investing. Rather, a hedge fund is a limited investment partnership otherwise exempt from registering with the Securities and Exchange Commission under Sections 3C1 and 3C7 of the Investment Company Act of 1940. As I note in my testimony last year before the House Financial Services Committee the available data show a remarkable diversity of styles of management under the “hedge fund” banner. The long-short strategy often associated with  captures about 30 to 40 percent of the business. The style mix has been fairly stable (in terms of percentage of funds) although there has been a dramatic rise in assets managed by funds of funds. These diversified portfolios of  are attractive to an institutional clientele. Event-driven funds focussing on private equity have risen in market share from 19% to 25% over the past decade, while the global macro style popularized by Soros has actually fallen from 19% to 3%. In my paper Hedge Funds with Style, with William Goetzmann, Journal of Portfolio Management 29, Winter 2003 101-112 we show that accounting for style differences alone explains about 20 percent of the cross sectional dispersion of hedge fund returns. The facts do not support a presumption that  adopt similar investment strategies coordinated with the objective of causing global instability. If their objective was to profit from the current instability, they were remarkably unsuccessful. According to Hedge Fund Research, the average fund this year is down 10.11 percent through September with equity  down 15.45 percent.
The second premise of Dr. Mahathir’s argument is that  are risktakers – gunslingers on a global scale. While it is true that the aggressive incentive fee structures (often 20 percent of any profits on top of a management fee of about 2 percent of assets under management) appear to encourage risk taking, career concerns are an offsetting factor. Given that the typical hedge fund has a half life of five years or less and the fact that it is hard to restart a hedge fund career after a failure, managers can be quite risk averse as we document inCareers and Survival: Competition and Risk in the Hedge Fund and CTA Industry, with William Goetzmann and James Park, Journal of Finance 61 2001 1869-1886. According to a recent Wall Street Journal article (10/14/2008)some of the few remaining successful  such as Steven Cohen of Advisors, Israel Englander of Millenium Partners and John Paulson of Paulson & Co (who is scheduled to appear in the November 13 hearings) have taken their funds out of the market and are in cash investments.
This last result seems at variance with popular wisdom that has arisen around some recent and spectacular hedge fund failures. The failure of Amaranth, a multi-strategy fund with more than $8 Billion assets under management, with more than 80 percent invested in a natural gas trading strategy, is often cited as an example of undiversified financial risk exposure. However, a close reading of the U.S. Senate Permanent Subcommittee on Investigation’s report on the Amaranth blow-up, Excessive Speculation in the Natural Gas Market shows clearly that excessive risk taking took place in a context of poor operational controls, where trading limits were exceeded multiple times and ordinary risk management procedures were dysfunctional. In recent research forthcoming in the Financial Analysts Journal Estimating Operational Risk for Hedge Funds: The ω-Score, with William Goetzmann, Bing Liang and Christopher Schwarz we argue that operational risk is a more significant explanation of fund failure than is financial risk, and that financial risk events typically occur within the context of poor operational controls.
Given that the initial premises are false, it is not surprising to find that the strong conclusions Dr. Mahathir draws from them are also false. In Hedge Funds and the Asian Currency Crisis of 1997, with William Goetzmann and James Park, Journal of Portfolio Management 26 Summer 2000 95-101 we show that while it is possible that  involved in currency trade could have put into effect the destabilizing carry trade Dr. Mahathir describes, there is no evidence that these funds maintained significant positions in the Asia currency basket over the time of the crisis. As to the question of illicit enrichment that Dr. Mahathir charges  with, his funds did not increase in value, but actually lost five to ten percent return per month over the period of the crisis.
From a point of pure logic, there cannot be any factual basis for any of these claims. Malaysia is fortunate in having a very fine and able Securities Commission. If there were any factual evidence at all to support a claim that Soros had intervened in the markets to bring down the Ringgit, it would have been produced by now. I should note that the silence is deafening. I suspect that what is really going on is that Soros was an expedient target of opportunity. The only remaining question is why, given the lack of evidence, Dr. Mahathir felt compelled to bring such serious charges against the hedge fund industry in general, and  in particular. There is an interesting story here which I document in Hedge funds: Omniscient or just plain wrong, Pacific-Basin Finance Journal 9 2001 301-311.
It is interesting to note that Dr. Mahathir’s feelings about currency speculation have changed over the years. In the shark-infested waters of international Finance the name of Malaysia’s central bank, Bank Negara stands out. In late 1989, Bank Negara was using its inside information as a member of the club of central bankers to speculate in currencies, sometimes to an amount in excess of US$1 billion a day. The US Federal Reserve Board had advised Bank Negara to curtail its foreign exchange bets, which were out of proportion to its reserves which at that time were about US$7 billion. At the time, Dr. Mahathir defended this currency speculation, referring to it as active reserve management and was quoted by the official Bernama News Agency in December 1989 as saying “We are a very small player, and for a huge country like the United States, which has a deficit of US$250 million, to comment on a country like Malaysia buying and selling currency is quite difficult to understand”. According to a report in the Times of London (4/3/1994) . Bank Negara came something of a cropper in 1992 when it thought to bet against  on whether Britain would stay in the European Rate Mechanism (ERM), and promptly lost US$3.6 billion in the process and would end up making a US$9 billion loss for 1992. Malaysia’s loss was Soros’ gain.