George Soros expose: Have you ever heard about the term called conflict of interest? I bet you do. One thing most of us are not aware of is that, it is not only political offices that suffer from this problem. Of all of the possible domains, it is the stock market which is hotbed for it.
You must have seen market experts appearing on morning news shows, minutes before the trading bell rings. Do you really think these experts are there to help you? They are there to drive the prices according to their own whims and fancies. They know that their opinion on a particular share can move the share price in any direction.
There are thousands of such experts all over the world. It is like a round trip. They have built their reputation by analysing trends correctly during their heydays. When they are credible, it is them who become the bull or bear, benefitting from the toils of early years.
Remember Harshad Mehta? He became the bull by rising through ranks. Multiply his impact by 100 or may be 1000 times. This is the dreamland of Hindenburg Research and George Soros. Both believe that they can cause havoc through their opinions, just like they have done in the past.
George Soros betting against India?
Some analysts have come to believe that George Soros is betting big against India. No, no, not in political terms. He is a political nobody and just a rich American elite in his 90s having money. On political issues, Soros is as incoherent, ill-informed and as opinionated as an average uneducated tea shop owner. Soros’ main domain is the financial market, which in turn is linked to the economy, which ultimately is linked to politics.
It is here that George Soros has always won big, through which his political opinions get irrationally reverberated. Soros has spent his life creating disharmony, spreading social conflicts, weakening the population for the sake of his own gain. It all started way back in Nazi Germany when George was a teenager. His ethnicity is Jewish and his father was quite influential in Hungary.
Opportunist from a tender age
At the age of 14, George was supposed to accompany his Jewish community along their painful journey. Instead, the shrewd George assumed a false identity and accompanied a Nazi officer who went on to confiscate properties owned by Jews in Budapest. In a 1998 interview, George credits this monstrosity as the building block of his character. That is some honesty on Soros’ part.
It seems that the teenage boy conflated sadism with personal benefits and has been doing that ever since. The man has traditionally relied on breaking economies, declining growth rates and increasing poverty to make money. Not even England remained immune from this level of devilishness.
In 1992, his hedge fund named Soros Fund Management decided to degrade the British Pound. Soros told the world that the British Pound was not backed by a good inflation and interest rate regime and therefore the Pound was overvalued. George Soros used Pounds to buy German Frank, which just got freed from Soviet clutches.
Responsible for tanking of Pound
It’s tough to chalk out exact fundamentals of Pound at that juncture of time, but George Soros’ negative opinion on the selected reading of currency made it impossible to retain value. The Bank of England did try to intervene by spending their existing forex reserve to buy more coins, but they were helpless against Soros’ onslaught.
The British government lost more than 3.3 billion pounds. The crisis resulted in inflation, increased taxes, social unrest and political turmoil, leading to the coming to power of Tony Blair in 1997, the man who joined the US in the Iraq war.
On the other hand, George Soros made one billion American dollars by causing these disasters. One may claim that currency was already weak, but investors like Stanley Druckenmiller are of the opinion that for his own benefit, Soros worsened the looming crisis.
He was not going to stop there. He allegedly tried that with Finnish Makkas as well, but failed. In 1997, the man repeated his Sterling stunt in Asia.
Asian Financial Crisis and conviction
In July, Thai authorities had decided to unpeg their currency Baht from American Dollar. The clever George Soros had already brought forward a contract for a specific rate. After unpegging the currency, its value went down. When that happened, Soros bought Baht worth more than a billion Dollars in the spot market. You want to know how he sold it? He sold them using his own forward contacts and doubled his investments.
George Soros later went on to do the same with Malaysian Ringgit, triggering an economic collapse unprecedented in Asia since the 1940s. South Korea, Indonesia, Thailand, Hong Kong, Laos, Malaysia, Philippines, Brunei, mainland China, Japan, Singapore, Taiwan and Vietnam were affected by it. In Indonesia, Thailand, Malaysia, South Korea and the Philippines, the nominal GDP per capita decreased by 43.2%, 21.2%, 19.%, 18.5%, and 12.5%, respectively. That happened in a span of a single year.
George Soros has never accepted his role in clear terms. But, Paul Krugman, renowned economist, had no qualms in putting it out. Pointing to Soros’ effect on Financial system of the world, Paul said, “Nobody who has read a business magazine in the last few years can be unaware that these days there really are investors who not only move money in anticipation of a currency crisis, but actually do their best to trigger that crisis for fun and profit. These new actors on the scene do not yet have a standard name; my proposed term is “Soroi”.”
When George Soros was asked about the impact of his actions on the lives of common people, the man asserted that he doesn’t care. He used the academic jargon of Economics being an amoral domain to plead innocence. Quote, “I am basically there to make money. I cannot and do not look at the social consequences of what I do…I don’t feel guilty. Because I’m engaged in an amoral activity which is not meant to have anything to do with guilt.”
Despite his astuteness, Soros has been caught red handed many times. He has been convicted of insider trading, illegal manipulation of shares and naked short selling in the past. France, Hong Kong and even his native country Hungary have been caught napping.
Modus operandi of George Soros and Hindenburg
George Soros’ modus operandi is simple. And while we are talking about his modus operandi, it is worthwhile to mention that this is the same modus operandi which Hindenburg Research used against Gautam Adani. Here is how.
During the course of its cycle, every business, economy, commodity and currency goes through ups and downs. There are times when the entity looks strongest and vice-versa. These are measured in terms like customer acquisition, sales revenue, profit margin, gross margin, EBITDA and many other terms. If the crux of all these metrics predicts a good future, the entity is slated to rise or nosedive.
Now, with a company with decades old history like Adani Enterprises or a national economy, ups and downs come in cycles. So, for instance, the Adani group is currently expanding itself and that too in the domains in which it is not known for. While most of us know Adani for infrastructure, the company’s business domain includes port management, electric power generation and transmission, renewable energy, mining, airport operations, natural gas and food processing.
Doing all at once requires lots of time and most importantly money. It is true for every big industrial conglomerate, including Dhirubhai Ambani. Resultantly, Adani has taken a lot of money from banks, putting it under debt. Any risk taker business person does that. As of September 2022, this debt is over Rs 1.96 lakh crores on Adani.
Naturally, key metrics take a hit for the time period till these debts do not start producing results. Same happens in the case of national economies that are going through temporary economic turmoil. What these short sellers do is take advantage of their own established reputation in the market and pick selective metrics that pose a bad light for them and create hara-kiri in the market. So, for instance, one of the metrics used by Hindenburg is current ratio. It is a liquidity ratio that measures a company’s ability to pay short-term obligations or those due within one year.
During the expansion phase, it is next to impossible to keep it balanced. But that imbalance is temporary and with the kind of reputation the Adani empire has built, it is not a big problem. It is quite evident by the way investors have trusted Adani on the basis of fundamentals.
No, Hindenburg wasn’t exposing Adani, it was only for profit
The crux of Hindenburg’s problem with Adani is that Adani was not running a tenable business as debt was too big. According to DLF chairman K P Singh, Adani was on his way of balancing this debt to equity. The ‘Follow on Public Offer’ before which Hindenburg released its report was a step in that direction. And this is where the notoriety of the financial world kicked in. The kind of experts Nathan Anderson led Hindenburg Research possess, it is hard to believe that nobody told the organisation about the intent behind Follow on public offer.
Hindenburg still decided to go ahead with it. They may turn out to be true a few decades down the line. But then again why would they squander a company’s opportunity to correct something which they themselves claim to have exposed. The report came just 2 days before the launch of FPO. By shorting Adani, Anderson and Co made millions, possibly billions of Dollars.
It is not different from what George Soros does to national economies. The only difference is that Soros is politically anarchist, while Hindenburgs’ political viewpoint is yet unknown. Don’t get surprised if they donate to left-wing parties in the future.
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