Chapter 24 Chapter Twenty-Four

"He was very depressed, like a cold fish. Now people are talking about how he can change the market, saying he is a leader, and it infected him. He is more cheerful and loves life. I see him smiling a lot too ." Quarter 1 Washington Suspicions Things are often ironic.For a long time, George Soros hoped that he would get the attention of politicians, and now they do.But Soros wanted their respect, not suspicion, and he got the latter. Soros' dizzying moves in early 1993, combined with the news that he had made $650 million in 1992, gave politicians pause.They vividly remember everything that happened in the eighties and how Michael Milken, Ivan Pojski and other stars of the buyout era made their money.

It turns out that Milken, Bojsky, and a bunch of other lesser figures are making a fortune on inside information.At first, everyone was amazed at how smart these guys were: but then they were told that these eighties businessmen weren't as smart as they made out to be. Now, politicians think they should turn their attention to George Soros.Although they had no reason to believe that Soros' methods were the same as those of Milken and Poysky, they felt that Soros' crime was that he made too much money.Thus, a feeling of unease was generated in Washington. Since there are a large number of financial experts in Washington, who handle large sums of money, Yuan people have no connection with Wall Street, and seem to know how financiers behave and get rich, so this view gradually takes hold in Washington. Get your feet wet: Ask Soros and other hedge fund folks probing questions and asking for clarification.

Thus, in June 1993, the power-threatening House Banking Committee Chairman Henry Gonzales announced his intention to ask the Federal Reserve Bank and the Securities and Exchange Commission to closely monitor foreign exchange transactions conducted by George Soros' Quantum Foundation. Notice.Speaking on the House floor, Gonzales said he was interested in knowing how Soros made such a huge profit and wanted to know how much of Soros's capital came from bank loans and to what extent Bank of America Open to Soros funds. "shortly in the future," said the congressman, "I will be asking the Federal Reserve Bank and the Securities and Exchange Commission to evaluate Mr. Soros's influence on the foreign exchange market in order to determine whether an individual like Mr. Soros may be manipulating the foreign exchange market ."

"manipulate".That's a strong word, and it's not as easy as a Chinese walk in the park for Soros. Gonzales also said, "It is in the interest of the Federal Reserve Bank and other central banks to fully understand Mr. Soros's methods of manipulating the foreign exchange market. At the end of the day, they are competing with him to manipulate the value of various offers ." Such a hearing won't take place for nearly a year, but Gonzales' statement still casts a heavy shadow over all hedge fund activity.On the sidelines, Soros and all the hedge fund folks will have to figure out what lies ahead for them.

Section 2 Take it easy However, by the summer of 1993, Soros was feeling much better again.He seemed at ease, calmly raving about being the leader in the market.Compared with 10 years ago, he seems more cheerful.His partner in London, Edgar Astaire, found that he was much more content with the status quo than in his early years.At that time, "he was very depressed, like a cold fish. Now people talk about how he can change Shitang, say that he is a leader, and it affects him. He is more open and loves life. I see him also Smile a lot." Soros seems to like the limelight.But he took this only as superficial."I'm not manipulating the market," he said. "But I can't deny that there was a time when there was a mystery around me as a market dominator. People pay a lot of attention to what I do now." After the Newmont stock deal The $15 rise in gold (in mid-May 1993) did have something to do with my buying. But if I get it wrong, people get quiet."

Soros would also manipulate the media intelligently.After attracting the interest of the press, he knew he would have to fend off a barrage of questions from reporters about what he was doing in the market.He wants to keep the focus on his aid program and has had great success in doing so.Actually: As of 1993 and 1994, most of what was written about Soros was primarily about his philanthropy.Journalists did feel compelled to report on Soros's investing activities, but because they could only get a sliver of information of real value.They had to touch on the subject roughly. Soros, well aware of the benefits that publicity can bring to his aid campaigns, has adopted an avid attitude towards the media.In the period after September 1992, he sat down for interviews more often, and with that came a lot of positive coverage, especially in the UK.For example, the headline of the "Observer" report on him on January 10, 1993 was "The man who conquered the banking world"; the "London Standard" report on March 14 was entitled "The master of the universe".

Television producers from the UK and US have also asked Soros to cooperate in a documentary about his life.So, for the first time, he allowed filming in his investment office in New York and in the Budapest basement where he fled to avoid the Nazis. For Soros, it was certainly worth it.In an ABC documentary aired on television on December 13, 1993, he said: "(My fund) has grown so large that if I don't spend some money, it's Doesn't make sense anymore. . . . Seems like it's easier to make money than to spend it. I seem to be more talented at making money than at making good money decisions."

Section 3 Leaders talk about "Leaders" In terms of his own identity, Soros has not experienced much crisis. He seems to be an extremely contented person.Still, many things about other aspects of his life left him choked up, as clearly reflected in his famous interview with Leader magazine in July 1993. When a reporter asked Soros how he saw himself at this time, he replied: "I am a machine that is getting better and better. I am very satisfied with the development trajectory of various events. Compared with when I just set foot in I feel much more satisfied with myself today and feel more fulfilled while making money... If I had a better understanding of how things fit together, that would be very satisfying."

All in all, Soros still wants to find answers to the questions he was concerned about when he was a student in London in the 1950s. The reporter also asked whether he had a cessation point, meaning whether he would retire. Soros replied in a tone of reluctance: "I think that is a failure. I will keep things within a certain limit so that I don't get to that stage. Obviously, things always go wrong." Too many times for me to handle." Did he ever feel like he was useless?All sensible people think that from time to time.What about Soros? "No. I've done a pretty good job of noticing this kind of danger and avoiding it. I see that as part of the game," Soros replied.

The reporter also asked: "You talked about the responsibility of having so much money and handling it in a way that doesn't make you come across as selfish. Is that a difficult thing to enjoy?" Soros replied: "I don't really care about that. I'm sure the story will be written if it hasn't been written yet. I don't think I have anything to defend. My party's problems lie elsewhere. What am I A slave to my successful career, or master of my destiny?" "It's a state where you feel you're too successful, but you feel like there's so much more to be done. I need to strike a good balance, Not getting me swept aside by my own success. I don't have to get sucked into things that are beyond my abilities. That's the real race in my life, because it takes risk."

The next question to ask is a great one: If you weren't making this much money, what might you be doing right now? Soros admits that he, too, has considered such questions.The first time he asked himself this question was when he first returned to Hungary in the early sixties.At the time, he said, "my answer was that I would be a taxi driver picking up tourists to try to earn some foreign currency." Soros may have portrayed himself as a wealthy middle-class businessman.Did he really think that if things had gone differently, he would have been an ordinary taxi driver, working to support his family? Section 4 Expedition to Europe As the summer of 1993 rolled around, Soros was becoming a growing enigma in the financial world. "At this time, in people's eyes, he is almost a myth, and every word he says is regarded as a signal to the future market. But during this summer's financial turmoil in the European Community, Soros watchers found it increasingly difficult to gauge what the financier was thinking and guessed that he liked to focus on that aspect of financial markets.He rose and fell like a man on a seesaw, confusing those who tried to follow him. Everyone is struggling to figure out what Soros is going to do when Europe's exchange rate regime appears to be unraveling.In the past, every time Soros made an idea on this mechanism, he won a success.Now some people are starting to worry that he will make a comeback. The French franc is under increasing pressure.High German interest rates kept capital away from the franc and sucked into the Deutsche mark, which drove the French currency down to the lowest the ECRM would allow.Speculators are auctioning off the franc, but the French are unwilling to devalue it. On Monday, July 26, Soros told the French newspaper Le Figaro that he was not going to make a fuss about the franc for one reason: he didn't want anyone to accuse him of destroying the exchange rate mechanism.In essence, Soros has cast a vote of confidence in the franc, showing that the franc will withstand the current crisis, and that France does not have to withdraw from the exchange rate mechanism for this. Soros looked at ease at this point.However, when the Deutsche Bundesbank decided not to change its basic discount rate through internal negotiations, Soros couldn't help being quite annoyed, as if he felt that he had been betrayed. "I think the system is dying," he predicted. July Knife Day, Friday.Soros faxed a copy to Reuters in London.In it he stated: "Following the decision of the Deutsche Bundesbank not to lower its discount rate, I feel that I am no longer bound by the statement I made in Le Figaro. It is futile for the Commonwealth Bank to attempt to protect the system by standing out of currency transactions when the Commonwealth Bank is not acting in the interests of other members." He likened the French franc to a wife who had been beaten badly.Despite all the blows she's had, she's still staying with her husband—in this case, the exchange rate mechanism—together."I don't expect the current arrangements to work out next Monday morning," said Soros, who also declared that at this point he has full freedom to trade in French francs. Confusion about Soros once again flooded the financial world. People don't know what he is going to do and what he wants to express.While European ministers scramble to save currency machines in Brussels, Soros remains above the crisis, trying to create the impression that he has no intention of throwing another The crisis of the exchange rate mechanism is on the mind. Soros was lounging by the swimming pool at his Southampton home when a New York Times reporter called.The reporter felt that Soros sounded more like a veteran politician than a currency dealer on the phone. "It's because I don't want to drive the market into a frenzy that I'm not going to say what I'm going to do," Soros told reporters.He didn't give away any secrets at all, all he said was that before noon on Friday, he didn't have time for European currencies to move.That sounds like he's going to be in action after that time. indeed so? Soros didn't want to say anything more about it.Eager to dissuade others from seeing him as a mere speculator, he continues to behave like a veteran politician."I strongly believe that the system should exist and that its participants should focus on how to preserve it rather than how to make money for themselves," he said. But then Soros no longer felt he could stay out of it. August 4th.Soros made a public statement on the Deutschmark.He expressed his belief that the policies of the Deutsche Bundesbank were pushing Germany further into recession, for which he wanted to throw the mark. "I'm speculating on the mark myself, selling the mark. Buying the dollar and the yen," Soros told German television. "In the long run, that's what you should do with the mark." He added, Deutsche Bank's high interest rate policy is self-serving, and it should lower interest rates to help revitalize the European economy. At first, Soros seemed to have a point.In June, when Soros made his first forecast, the mark was 1.625 against the dollar.At the end of July it fell to 1.75.but.By mid-September, the position of the German currency against the U.S. dollar was significantly stronger again, reaching 1.61 marks for one U.S. dollar. Section 5 Siege At this juncture, few question Soros's right to make public statements about his own trading status, and only a few top figures have done so.Still, there is a growing sense that Soros may have gone too far in advising the world's statesmen. For example, on August 1, Thor Ross appeared on a British TV program and talked about Western military intervention in the Balkans.He asserted that a state philosophy that tolerated "ethnic cleansing" marked the end of civilization. Who and how did the immortals acquire this status? An editorial in The Daily Telegraph of August 5, 1993 aptly summed up the inexplicable, inexplicable feeling many had about Soros that summer.It says: "Ever since he bet ten billion dollars that the British pound would leave the exchange rate mechanism, his every word has been held in high regard as an oracle, and his letters and articles in newspapers have been regarded as divine strokes... ..." "No one should expect Mr. Soros to be ill. Continental European politicians and central bankers, who have been blaming speculators like him for the collapse of the exchange rate mechanism in recent days, should restrain themselves anger; the fault is entirely their own for trying to maintain unsupported exchange rates and interest rates..." "There are reasons to be cautious though. Mr. Soros' increasingly rhetorical messages to the media can be frustrating make him a bit tall and arrogant "When we learned this week that Mr. Soros supported an air strike to break the siege of Sarajevo, we began to think he needed to go on vacation. He may have come to believe that deciding the foreign exchange market and even foreign policy was easy for him..., but The whole world's willingness to listen to Mr. Soros should not make him so foolish as to be quite self-righteous about what Hua said. Two days later, on August 7, The Economist was even more critical of Soros in an article titled "The Chatter". "Is George Soros crazy? The New York-based, Hungarian-born investor increasingly fills newspapers and radio with sensational utterances on everything from finance to Bosnia. Mr. Soros's views have attracted at least as much attention as the head of the Deutsche Bundesbank when the mechanism is plagued by problems. It is not for nothing that the press is interested in Mr. Soros, after all, he is the man who made the Bank of England so strong. Hurt people....But other investors with his same power tend to be super calm, why not him?" Why, the magazine asked, did Mauros publicly criticize so often?It gave the following answer: "The first reason must be that Mr. Soros is not shy about being seen as a contemporary investment leader with a reputation for being stupid. And he certainly deserves that honor." "Another motivation may be that Soros, no longer content to be just a rich man, wants to influence public policy on the great issues of our time. It's a laudable ambition, but perhaps a better way to achieve it is Through the philanthropy he's implementing in Eastern Europe." "A final reason behind Mr. Soros' apparent desire for the limelight is that he is far more reckless than he was when he was buried in the day-to-day affairs of the Quantum Foundation." The media continued to fire fiercely at Soros. On August 16, another magazine joined the attack.It said: " "In the past, Soros was a quiet type. For many years, he has been a person who has been well-received and well-received by us. However, now he is not a spokesman for his actions. God knows he How do you say it's not over?" "George has reneged excessively on his promises to keep quiet lately. Hardly once in a few weeks you turn on television in London without him filling the screen. He writes letters to newspapers, writes columns, gives interviews to reporters, Blame the Deutsche Bundesbank publicly - in short, he has become a public activist as well as a legendary investor." "George may have felt something impelling him to shout about his philanthropy, or pay a tacky philosopher the way rich people do when money has become a worthless job, and that's not true. Surprised us. If we didn't know him well enough, we'd wonder if he had a little bit of a common problem called high do." A BusinessWeek reporter found an opportunity that summer to ask Soros the question: Why have you become so "chattery"? "I usually don't want to be in the public eye unless I have something to say," Soros replied as soon as he came up.He continued, "To the extent possible, I am willing to use my own words. But I find that after I have given an interview, my words are often quoted out of context. Even The quote is my exact words, which are distorted and not what I meant." He also said: "I don't have a love or hate relationship with the media. If something happens, I stay away from it. If you write a review that is not good for me now, pick something from me. Fuck, it won't do me any harm. So go ahead and do it." Soros seems to be saying that he doesn't really care much about the media, but that's clearly not true.Without the use of a large, well-functioning public-relations agency, Soros would have become as playful as his best spokespeople.He's smart enough to realize that if he sends a fax or writes a letter to the Chronicles.rather than being interviewed.He has a better chance of making his meaning understood.This tactic has worked so well that newspapers and magazines publish the full text of Soros's letters or faxes.He also learned to sometimes say something to the press and sometimes to keep his mouth shut.When Soros took the bold step that year of hiring the respected New York firm of Coxter Public Relations, he trusted the firm to say as little as possible about him. To some, Soros was too cunning in his public statements about the development of the investment landscape."I don't know why I'm making these public statements," said the person, who asked not to be identified because of Soros' actions, one of Wall Street's leading financial figures. He insisted that Soros It is inappropriate to make these declarations in the context of the situation.This may not be a legal issue, but it is an ethical one. " Section 6 shut up soros Soros still didn't shut his mouth.By the end of August, he caused another media-related storm.This time, his face was on the cover of "Business Monthly".In the past, he might have seen this achievement as the kiss of death.Some of his assistants are squirming about it, for reasons that can be seen from the opening paragraph of this cover story. A reporter from BusinessWeek claimed that Soros was about to give the magazine an interview.This upset Gerald Marolovisi, who has been said to be Soros' senior securities investment manager. "Grey," Marlowesi said to Gershaw Glassten, Soros' chief executive, "you have to stop this, and I'm serious about it." Glassten turned to the reporter, smiled apologetically, and said, "We don't like being the center of attention. We like to keep a low profile." One insightful Wall Street observer commented that a man like Soros's penchant for attracting public attention was neither prudent nor lucky. "Wall Street is a tacky place to do business. Jocha Soros was dealing with guys who didn't care about anything other than making money and who didn't care about their place in history. Soros may have cared about that, but they didn't. It's a common wisdom on Wall Street that once you get noticed, you're history; You can kiss reality goodbye. And Soros is on the cover." Soros was under increasing pressure from his aides, including Stanley Druckenmiller, to keep his mouth shut.The thinking inside Soros' fund was that his public statements limited the fund's freedom of action.As one of his former colleagues put it, "He may think he's a genius in an investment world full of mediocrities, but the reality is that his position has become so visible that he needs to be constantly buying and selling. to prove it. And having so much currency and fixed income makes its funds lose flexibility in the market. Thus, after a "talkative" summer of 1993, Soros adopted a new strategy.Whenever asked by a reporter, he always refused to say what securities or currencies he liked or disliked.He seemed aware that his every word was being monitored.If he had the authority he was given, this might in turn only get him into trouble.He knows this.So he became less talkative than he used to be. Chapter 7 Indignant Soros has tried to build good relations with European politicians, from whom he has received little praise.They are very annoyed that he has been "interfering" in European monetary affairs. At the end of September 1993, Belgian Foreign Minister Willy Klass, then chairman of the Council of Ministers of the European Community, indirectly accused Soros of attempting to subvert the great cause of European unity.In a conversation with the French magazine Le Opinion, Klass said, "There is a conspiracy, some organizations and individuals in the Anglo-Saxon world who would like to have a Europe that is fragmented and plays a second-rate economic role. Don't want Want a strong Europe with its own currency and foreign policy. Soros's spokesman, David Knofeld, dismissed Klaas' remarks, saying, "We are not going to answer this nonsense about some Anglo-Saxon conspiracy." He reiterated that Soros Ross supports a functioning European monetary system, but is convinced that until its recent disintegration, it no longer had a positive effect on European countries. Section VIII Soros in 1993 Overall, 1993 was a very good year for the Quantum Foundation, with its assets up 61.5%.The $10,000 invested in the Quantum Foundation in 1969 has risen to $21 million today.In the same period, the US$10,000 invested in the securities of standArd&POOR500 only increased to US$122,000. Every fund project of Soros performed very well.The best is "Quantum Emerging Growth", with an increase of 1o9%, followed by "Quantum" and "Quota", which are more than 72% respectively.Since 1969, Soros has produced an astonishing annual growth rate of about 35%.This index for the S&P500 is only 10.5%. Soros's largest purchase in the last quarter of 1993 was Ramon Communications, followed by companies in the computer networking field: Newbridge Networks and DSC Communications. .He sold the most shares in Medco Containn lentserv lces.The other sales showed Soros was trying to shield himself from financial firms, where five of his 10 biggest sales were.