Report: Soros Made $10 Billion on S&P Downgrade Bet


A mystery investor reportedly made $10 billion on the S&P downgrade bet that the US would lose its AAA credit rating.
The Daily Mail reported:

A mystery investor or hedge fund reportedly made a bet of almost $1billion at odds of 10/1 last month that the U.S. would lose its AAA credit rating.

Now questions are being asked of whether the trader had inside information before placing the $850million bet in the futures market, or if the bet happened at all.

There were mounting rumours that investor George Soros, 80, famously known as ‘the man who broke the Bank of England’, could be involved.

He made more than $1billion on currency speculation when the British pound left the Exchange Rate Mechanism on Black Wednesday in 1992.

But a source with knowledge of the firm said Soros was not involved in the rumoured trade and questioned whether in fact there had been such a trade at all.

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  • Fiftycal

    Hey, ObamMAO had to pay off his OWNER!

  • befuddled

    Either way, I am sure Obama’s buddy Holder will get right on this….

  • http://heresysubject.com Josh

    Ahhh…. Obama’s puppetmaster profits at our demise………… who would’ve thought!??

    Lord Vader must be proud of his master.

  • Faye

    Told you that the socialist dems and their state run media were throwing victory parties about their accomplishment for the downgrade. ( of course they will blame Bush, Republicans, the Tea Party so their hands appear unsoiled).

  • FU#K OBAMA

    TREASON for distroying our country and bringing us to this point.

  • http://heresysubject.com Josh

    You know the difference between Darth Vader and Obama??

    One uses telepathy to fool his enemies while the other uses a teleprompter.

  • tru

    Soros should be sharing a cell with Made-off.

  • Joanne

    I’m not sure if the markets will recover this time or not, but you can be sure Soros will be making a lot of money off the backs of everyone else.

  • bg

    ++

    somehow already knew that when i woke up this morning..
    just needed confirmation, and whala, thar she blows.. :-(

    ==

  • babeol

    Yes, it is time for charges of treason to be filed against George Soros.

  • Molon Labe

    I do not believe this story which is wrong on so many levels.

  • Ozark Lee

    Soros is a very smart man.

    Collectively I think we are even smarter but the problem is that he has more money than all of us put together.

    We need to brainstorm on how to take the guy down and I mean to take his money away from him. That is what the left has planned for us.

    The markets have made absolutely no sense to me beyond the headline DJIA and S&P 500 numbers.

    Our credit gets downgraded and the bond yield falls – Hmmm.

    The dollar gains ground on the Euro and the Yen – Hmmm.

    I’m only an electrical engineer with a math minor and an econ minor but some one has to splain me what is going on. My bet is the fed monetizing everything but why would the dollar go up?

    Do we suck that much less than the EU folks?

    Confused in Kansas City.

    …Lee

  • Taxpayer

    I’d bet my bippy it was Soros–behind a half-dozen shell companies….

  • myohmy

    George Soros is the epitome of evil.

  • Ginger

    I have some thoughts as to what should happen to that old fart but I will keep them to myself. He is such an evil little man!

  • mg4us

    Wouldn’t be surprised that obama and Geitner planned this out or tipped him off. . Obama is a Sorros puppet. .Sorros and the Chinese that is. .

  • Molon Labe

    #12

    Yes the Euro will not survive another five years. Greece is dead. Italy, Spain, Ireland will soon go zombie. They may pull down France, Germany and the UK. Each nation has a debt situation as bad or worse than the USA.

  • http://bidsfromthepros.com sliderblaze

    wouldnt surprise me at all.

  • Militant Conservative

    Think of it this way. Soros with the aide of Obama

    raped your 401k and savings so your family is

    Poorer. Spreading the wealth around, yours.

    Powder is dry

  • lizzy84

    Hardly a coincidence that this evil SOB took his hedge funds private–2 weeks ago:

    link@:http://online.wsj.com/article/SB10001424053111903999904576469761599552864.html

  • Mitch Rapp

    What kind of commission arrangement does Obama have with Soros?

  • bg

    ++

    btw, not that it matters much now, but BP execs
    cashed in their shares just before the gulf leak..

    flashback:

    Soros Bailing Out of US Stock Market

    ==

  • succotash

    Well there you have it. He has brought down other economies and made large profits..this is the plan that has been in place all along and Obama will profit. BTW today Obama promised Somalia 150million dollars so I guess he didnt get the message that We are Broke. Also they are trying to revive the Fairness doctrine to get rid of talk radio.

  • http://www.itsaboutliberty.com IronDioPriest

    I don’t understand the justification for George Soros to draw one single breath beyond the one her just drew. He is perhaps the greatest enemy this country has known since WWII, and he should be killed with all haste.

  • jainphx

    Just why is this Soros guy not at room temperature long ago. He took England down by shorting the LB and still he’s not satisfied.

  • okie2

    The govenment needs more money, right? Why don’t we tax Soros. We could probably get 1 trillion in revenue….

  • jainphx

    This guy is pure evil, I wonder if he turned his own people in to the Nazi’s. A Jew that hates Jews.

  • rbosque

    I knew it! These bastards set the table, they ate the meal, and we pick up the check!

    Corrupt pigs!

  • bg
  • Conservative Ken

    Soros maked Madhoff look like an alter boy, so naturally he will die a Very, Very, wealthy, free man.

  • bloop bloopington

    Oh dear. Do I have to explain this again?

    George Soros didn’t make $10 billion on that trade because NOBODY made $10 billion on that trade because it was a LOSING trade.

    When you short Treasuries in the expectations that interest rates will go up but interest rates actually go down, you LOSE.

  • jainphx

    bg keep digging I think you’re links are waking up the slumbering giant. Outstanding!!!!

  • jainphx

    Hey bloob tell that to Soro’s accountant. Why you spread that Bs what is your profit here.

  • bloop bloopington

    Ozark Lee:

    “The markets have made absolutely no sense to me …”

    Actually, you’re just about the smartest right-winger I’ve seen on any of these Soros threads I’ve been on today, so let me explain why it doesn’t make sense before I get banned for trolling.

    Your model is wrong. When you say “It doesn’t make sense” what you really mean is “my model doesn’t predict it.” And when a model fails to predict an event that the model is designed to predict, that’s a problem with the model, not a problem with the event.

    BTW, the dollar’s going up because nobody, not even China and Russia who both complained recently about the dollar as the reserve currency, actually wants the dollar not to be the global reserve currency.

    Yields went down because the core problem is aggregate demand, not U.S. debt.

  • Joanne

    The guy is 80; I think it is time for Satan to take him home.

  • bg
  • bg
  • Carbon Pootprint

    Well now we know whose best economic interest the Pnzicrats were looking after when they queered the debt ceiling deal. Even if it wasn’t Soros you can bet it’s a wealthy Progressive that the traitors get funding from.

  • donh

    He’s just fundraising for Obama and his fellow fascists.

  • thescribbler

    This guy is getting older by the day, he can’t live forever, that’s about the only thing that his money can’t buy. His judgement day will come sooner than later. Hate to be him. Just saying…..

  • bg

    ++

    how much did our millionaire congress critters make??

    [Democrats beat the market by 73 basis points per month, compared
    to 18 for Republicans. That’s a rout anyway you look at it. Senators fare
    even better than house members.]

    [Strict laws ban corporate executives from trading on their insider
    knowledge, but no restrictions exist for members of Congress.
    Lawmakers are permitted to keep their holdings and trade shares
    on the market, as well as vote on legislation that could affect their
    portfolio values.]

    ==

  • Ginger

    Soros has children and grand children don’t you think they will continue his evil doings?

  • the Boodge

    I want to know where my portion of his funds are, aren’t you going to spread the wealth? To be “FAIR” soros (a$$hole) needs to pay every LEGALLY DOCUMENTED American citizen $30,000,000! isn’t socialism grand…

  • bg

    ++

    re: #22 & #29

    BP & Qaddafi

    Obama Gives Chrysler To Libya & Muammar Gaddafi

    more @ links & connecting links..

    ==

  • Taqiyyotomist

    #22 bg

    It matters greatly. The intentional (IMO) explosion and resulting leak on the Deepwater Horizon rig resulted in: a net loss of jobs and the destruction of an entire productive industry.

    Remember, at Obama’s command, we gave a couple of billions of dollars to Brazil so they could drill for oil, OFFSHORE, TWICE AS DEEP AS THE HORIZON. Brazil, of course, home to Petrobas, a huge stake of which is owned by none other than George Soros.

    There is nothing we can do. NOTHING. Obama should and could have, BY LAW, been completely impeached and possibly executed, TWENTY TIMES BY NOW, if all that has taken place in America had been fully and completely investigated and known.

    BP and the destruction of our Gulf oil industry. Fannie and Freddy and the CRA and suing banks to intentionally (Cloward-Piven) destroy America. PIGFORD I and II. The murders of three gay men from Trinity United Methodist Church, who may have “known” too much (both objectively and biblically) about Obama. The murders of 20 Navy SEALs. TARP II, and an obviously forged long-form birth certificate.

    All CRIMES. Some are TREASONOUS.

    And we cannot do jack squat. Nor will any of our Reps.

    LOOK TO JESUS CHRIST, PEOPLE. THIS IS TRUTH.

  • http://gatewaypundit pamlinson

    Maybe he can get that eye lift now.

  • bg

    ++

    Taq #45

    albeit there is much more evidence to offer, this alone should make
    the hair on the back of any knowledgeable persons neck stand up..

    [Obama’s top national security advisor declared that the Muslim Brotherhood is a ‘secular’ organization, non-extremist, and dedicated to ‘peace.’ Obama himself, in an interview with Fox News’ Bill O’Reilly, refused to refer to the Brotherhood as an Islamic extremist organization, in spite of the fact that the group’s own charter, and recent statements made by its leadership, indicate exactly that.]

    ‘Why Isn’t There An Outreach To The Christian World’

    yes, why indeed (as if we don’t know).. /s/

    ==

  • Estragon

    Look, Soros is very likely involved in illegal activities involving banking and money laundering in the Cayman Islands and elsewhere, but this story is 100% bogus.

    No bookmaker can take a bet of that size, it just isn’t possible. Suppose you’re the book – you require cash up front on a bet of that size, don’t you? How do you intend to collect if you win otherwise? And it would also be impossible to lay off such large action on an esoteric point so easily subject to insider knowledge. It makes no sense at all.

    Sorry, I don’t buy for one second that there ever was such a bet placed.

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  • JBD

    Would anyone here have bet otherwise? Criticizing a man for having the brains of a sand flea and acting on it seems a little spurious. Once the ratings services started talking about the concept it was obvious it was going to happen and is a good 20 years overdue.

    {O.O}

  • http://www.daveinboca.blogspot.com daveinboca

    Funny joke among the commenters about Holder getting on the case right away… I’ve been saying for years that Soros was banking the far-left lunacy brigade on a crusade to weaken the dollar, but he may have switched tactics because the euro is becoming more pitiful than our greenbacks. Soros started off down the wrong path by pointing out Jewish co-religionists to the Nazis in exchange for some of their loot. A very leftist thing to do, ethically and morally, as their craven leper gene’s variants are disgusting on so many levels.

    Even if it weren’t this specimen of sub-humanity, he’s probably still gunning for a weak dollar like a relentless maniac banging walls with his head.

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  • Matches Malone

    This is a bogus story, as I commented last night on Weasel Zippers:

    They talk about a short sale in July: “The trade was for block trades of 5,370 10-year Treasury futures executed at 124-03 and 3,100 Treasury bond futures executed at 125-01.” Right now the 10 Years are at 128-26, and the 30 Years are at 136-02. Later in the article they stress that it was a short sale, btw each handle is $1,000 per contract. 124-03 to 136-02 is one tick short of $12,000 per contract, and it’s a loss.

    Believe me I get it that most people don’t understand derivatives but let’s not take the press too seriously on these matters, they generally don’t understand derivatives either. For starters if the market for 10 Years and 30 Years went to zero the trade would only net around 1 Billion, and they are not going to price lower than zero. Additionally nobody outside of the exchange (really, nobody outside of the Globex Command
    Center and the CME Clearing House) knows who put this trade on, and I suspect that it was a hedge against something else, another derivative or a cash position.

  • http://gatewaypundit Cutlers bad knee

    What I want to know is how much Obamas kick-back was ?

  • tadcf

    Don’t forget, Eric Cantor also hedged a bet against America–he just didn’t have as much money.

  • jay

    when you fight two wars, which were all paid for by supplements to the budget, and have a financial collapse, pay out trillions of $ to sustain the financial backbone of America, just not the 700 billion TARP, billions to AIG, FREDDIE MAC & FRANNIE MAE, TRILLION OF $ TO SUSTAIN THE COMMERCIAL PAPER MARKET, AND THE MORTGAGE MARKETS, AND ON AND ON, why would standard & poor see America as a good risk? Wake up America.

  • Mama Grizzly

    Thanks Taqi — good post and bg– links.

    Obama is guaranteed an unlimited coffer for his campaign via Soros.
    Off topic:

    Hey Militant Conservative!: hi. I lost the info you gave re: best firearm for females. I’m hoping you copy your stuff and can shoot it my way : )
    Thanks.

  • Matches Malone

    Jim,
    Please Update this post to reflect the fact that this is a bogus story, some of your readers just don’t get it. Besides the fact that there is no reason to believe that Soros put this trade on beyond some wild speculation that sounds like it came from somebody’s disgruntled, and idiotic clerk, the cited trade is a mult-million dollar loser. And to those readers who cantinue to buy into this story, I mock in your general direction.

    There is plenty of reason to go after Soros, nobody needs to make stuff up or buy into such obviously bogus stories.

  • bg

    ++

    disclaimer:

    i do not know if this particular story is true or not..

    i also made no comment related to it..

    i did however post known factual information
    related to George Soros and his associates..

    August 3, 2011

    6 Stocks George Soros Loves

    July 25, 2011

    George Soros’s Top 10 Picks

    July 6, 2011

    George Soros’s Largest Stock Holdings

    Last Update: 2011-05-20

    George Soros – Stock Picks

    ==

  • bg

    ++

    Estragon #48

    look, $10bn is a drop in the old bucket to these
    people
    , not to mention these poor people.. /s/

    sorry, but they do not play by the same rules, they also don’t not live in
    our world, they can and do however, dictate what kind of world the rest
    of us get to live in..

    Matches Malone #55 & #60

    link please,

    thankyouverymuch..

    ==

  • bg

    ++

    oops re: #61

    was in response to:

    mocky me #60

    ==

  • bg

    ++

    re: #62

    also don’t not live = also don’t live

    ==

  • Matches Malone

    bg #62

    I tried to leave a link to the ETF Daily story of July 25 and for whatever reason (Firefox on my computer?) the page here didn’t take it. I found the link to the original ETF Daily story last night in the Daily Caller’s story. But just basic understanding of bond pricing tells me that whoever put this losing trade on could only make around $1 Billion and that’s if the CME/CBOT 6% 30 Year Bond and the 6% 10 Year Note contracts (they currently trade well above par) go to zero before the end of September, what the prevailing interest rate would be I don’t know but I’m figuring a Weimar Republic scenario. The operative issue here is that the Treasury markets have rallied since July and the original story makes it clear the trade was a short sale.

    Another issue is that we no longer have any idea who we trade with. Once was the time when Refco cleared Quantum’s trades along with hundreds of other big-shots and you could at least get a sense of who was on the other side of your trade, electronic markets don’t allow for that. And if it was done in the pit it still wouldn’t be obvious if Quantum was involved, last I checked they weren’t a Clearing Member thus any trade they made would be in another name. And leaks to the media in financial markets are often just somebody’s media play, some short in the market wanted the world to think that the big seller in the market was Soros with inside info, goes on every day, most of those reporters aren’t very good because they aren’t traders.

    Jim really should update this post.

  • redpillpatriot

    It’s time to hang some of these M-F-ers

  • Valerie

    #55 August 9, 2011 at 8:16 am
    Matches Malone commented:

    ….and if the trade were a win the reporter wouldn’t know how to write it up so that someone who knows the rules can tell. I have no argument with your analysis. I just don’t know that the reporter got the underlying facts right enough to tell whether the trade was a loss for the trader, or not.

  • Valerie

    The thing is, Soros is a bear investor. Assuming (which I do not) that he did nothing to help us on our way to this downgrade, it would be in his character to bet big on a downgrade, because he makes his money betting that the government will be stupid.

  • bg

    ++

    re: #36

    “A Disavowal of the pursuit of Middleclassness‘, the heading read. While it is permissible to chase ‘middleincomeness’ with all our might, the text stated, those blessed with the talent or good fortune to achieve success in the American mainstream must avoid the psychological entrapment of Black ‘middleclassness’ that hypnotizes the successful brother or sister into believing they are better than the rest and teaches them to think in terms of ‘we’ and ‘they’ instead of ‘US’!

    — Barack Obama (Dreams from My Father)

    oh yah, George Soros, Maurice Strong
    and company redefine the Middleclass

    ==

  • bg

    ++

    Matches Malone #65

    re: [ETF Daily story last night in the Daily Caller’s story.]

    here you go.. via WZ

    and just in case i didn’t make myself clear.. i really don’t give a
    bats guano about the bet being legit or not, it’s the substance of
    what i posted that counts, just wanted you to back up your claim..

    btw, opinions facts do not make: you are in no position to back
    your claim up.. the story is not bogus w/out proof it was bogus..

    thank you, you’re welcome in advance, & i’ve
    had enough of your unsubstantiated claims..

    ps: please note: GP put nothing in “quotes”..

    ==

  • bg

    ++

    re: #70 re: #65

    [The number of shops or even central banks that can take on this level of market risk is extremely small. Some that come to mind are hedge fund manager John Paulson, Bill Gross’s PIMCO, and the U.S. and Chinese central banks.

    Paulson already scored big – about $6 billion big – on a similar trade years ago when he bet against subprime mortgages, the investments that helped bring down Lehman Bros. and many other investors.

    Whoever was behind it wanted a trade on ASAP,
    and didn’t care about the ripples they would cause.]

    George Soros and MoveOn.org “bought” Democratic Party in 2004

    George Soros is evil.. *sigh*

    ANYONE CATCHING ON TO THE ELITES
    TRICKLE DOWN OBAMANOMICS YET??

    ==

  • bg

    ++

    re: #71

    link for subprime mortgages..

    The Democrat Party platform’s hidden Soros Slush Fund

    all of that & much more is old news, but somehow long forgotten as well..

    [prayers still going out for Marizela.. :*(]

    ==

  • bg

    ++

    re: &72

    Burning Down The House

    ==

  • bg

    ++

    re: #70

    ht vangrungy via WZ:

    When Did the President Know and Who Did He Tell?

    [The tremendous 7% crash in stock market prices over the last five
    trading days serves as over-whelming evidence that the President
    of the United States or someone in his inner circle leaked “material
    non-public information” to Wall Street traders that the AAA credit
    rating of the United States of America would be downgraded..

    Leaking of such information is criminal activity for both the trader
    who profits and the leaker. Depending on the level of the leak
    in his Administration; the President may be forced to resign of
    face severe sanctions.]

    eh, his job of doing US in is more or less done anyways.. 😐

    ==

  • Matches Malone

    bg:

    Look, I’m really sorry that you don’t understand bond pricing. The link I suggested and that you linked to clearly states: “People who were long 30 Year Treasuries panicked as they saw the huge short put on.” What do you not understand about that sentence? The trade referred to was a “short” sale, as I’ve been writing here since this morning. And it’s a loser, just look at the CME web site if you don’t believe me. After linking to the article that reported the trade as a “short” sale bg, you stated in reference to me: “btw, opinions facts do not make: you are in no position to back your claim up.. the story is not bogus w/out proof it was bogus..” Okay, so you don’t understand simple bond pricing (take a finance class already) and you clearly have no familiarity with the Treasury futures markets, something I started trading during the ’80s, and you didn’t read what you asked for and then linked to. As a member of the relevant exchange (CBOT) I sometimes trade in the 10 Year Note market, one of the markets involved in this and if I had heard this story in July I wouldn’t have believed it because there is simply no way of ascertaining who trades what anymore, and that crap about size is ridiculous, it’s way, way bigger than what I trade but I know individuals who’ve traded thousands of Treasury futures at a crack, this was 8000 contracts, the former 30 Year local Tom Baldwin alone was known to trade 5000 and 10,000 lots plus in single trades. And it sounds like the trade was priced (maybe without being entered as an “iceberg”), if not the entire story is just a rumor, we can’t see the firm we trade against, only Globex can see that information and as I explained earlier, I don’t think Quantum is a Clearing Member at the CME/CBOT, so you won’t hear their name in the pit, which is just a shell of its former self anyway.

    Here’s a rough example of the math: 8500 Treasuries sold at 126-00… 8500 x $126,000= $1,071,000,000 – That’s as much as could possibly be made from that trade (the actual trade is a bit different as the 10 years and the 30 years were priced differently, I was generous) only if interest rates went to about 100% plus before the end of next month.

    This is also a good example of why I rarely read the comments here, big talkers who know squat lamely attempting to flame the commenter who is likely the ONLY commenter with relevant experience.

    Jim should update this story. There is plenty to go after Soros for but unless you stick to reality you potentially smear all of the man’s critics as stupid people who can’t do math and don’t care about the veracity of what they say.

  • Matches Malone

    Here’s the full math of the most profit, if the 6% par Treasuries went to zero-

    10 Years:
    1000/32 x 3 + 124,000 = $124, 093.75 x 5370 = 666,383,437.50

    30 Years:
    1000/32 + $125,000 x 3100 = $387,500,031.25

    Grand Total if Treasuries are worth nothing by the end of September: $1,053,883,468.75

    That’s not $10 Billion.

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  • bg

    ++

    MM #75/76

    yawn..

    wash, rinse, repeat..

    ==

  • Matches Malone

    bg #78

    You really have nothing junior, you aren’t even smart enough to understand the simple math.

  • bg

    ++

    MM # 79

    no, tis you who proved zilch to the wrong person..

    like i said..

    i not only don’t give a bats guano, but opinions facts do not make..

    now take your Alinsky crap show on the road, this pit stop is closed..

    ==

  • Deborah

    Whether Soros made 10 billion or 1 billion really doesn’t matter.
    Soros is on video stating that the American economy “must fail”. Obama set this up so Soros could profit.
    Soros has said that the best years of his life was working for the Nazis confiscating Jewish properties when they were sent to the camps.
    Our country is being run by a sociopath, and the sad thing is there is not much we can do about it.
    Powder is dry.

  • Matches Malone

    bg:

    You are still to stupid to understand math? And the reference to Alinsky is pure projection from an uneducated loser.

    Here’s one for you bg:

    If Soros sold 10,000 30 Year Bond futures at par what is the most Soros could possibly make? This is 5th Grade math bg, let’s see how you can do…

  • Matches Malone

    Deborah #82, the trade in question is a loser and nobody but the folks at Globex knows who executed the trade.

  • bg

    ++

    Deborah #81

    Amen..

    ==

  • bg

    ++

    One-Degree of George Soros

    [One final Soros-Balsillie connection: Last January, Soros received the Globalist of the Year Award from the Canadian International Council because he, Soros, was a “main player in the economic downfall of 2009 (also one of the few people to make a lot of money from it).” Balsillie is CIC chairman.

    What are the odds that two billionaire globalists could share such joy at making millions at the expense of others, share a nearly identical globalist agenda, and also could be connected to “English” civil unrest on the other side of the Atlantic driven by the BlackBerry?]

    yes, who indeed… :*(

    ==

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