The New Paradigm for Financial Markets—The Credit Crisis of 2008 and What it Means

GEORGE SOROS

PublicAffairs

NEW YORK

© 2008 by George Soros.

Published in the United States by PublicAffairs, a member of the Perseus Books Group.

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TEXT SET IN JASON TEXT

Library of Congress Cataloging-in-Publication Data
Soros, George.
The new paradigm for financial markets : the credit crisis of 2008 and what it means / George Soros.
p. cm.

ISBN 9781586486839 (hardcover : alk. paper) —

ISBN 978–1–58648–684–6 (electronic book) 1. Financial crises—United States. 2. United States—Economic policy. 3. United States—Economic conditions—21st century. 4. Credit—United States. I. Title.
HB3722.S673 2008
332.0973—dc22
2008013695

FIRST EDITION

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About the Author

George Soros is chairman of Soros Fund Management and is the founder of a global network of foundations dedicated to supporting open societies. He is the author of several best-selling books, including The Bubble of American Supremacy, Underwriting Democracy, and The Age of Fallibility. He was born in Budapest and lives in New York City.

Acknowledgments

Normally I would circulate my manuscript widely and keep revising it based on the comments I receive. On this occasion I did not have time to do that. Just a few people gave me valuable feedback: Keith Anderson, Jennifer Chun, Leon Cooperman, Martin Eakes, Charles Krusen, John Heimann, Marcel Kasumovich, Richard Katz, Bill McDonough, Pierre Mirabaud, Mark Notturno, Jonathan Soros, Paul Soros, Herb Sturz, Michael Vachon, and Byron Wien. I did receive invaluable assistance on the philosophical part from Colin McGinn, who commented on the text in detail and helped me over some conceptual difficulties. Charles Morris, whose book[*

] I can heartily recommend, understands the intricacies of synthetic financial instruments much better than I do. He and Marcel Kasumovich helped me with the Introduction and Part 2. Raquiba LaBrie and Herb Sturz from my foundation organized a meeting of experts on the foreclosure problem. They along with Solomon Greene and Diana Morris helped with the policy recommendations relating to the subject. Keith Anderson supplied the charts I used in Chapter 5. My publisher, Peter Osnos, and the entire PublicAffairs team achieved the impossible by publishing the book electronically within a few days of my submitting the final text. Yvonne Sheer and Michael Vachon were as helpful as ever with the entire project. The responsibility for the text is, of course, entirely mine.