George Soros sees fall of financial system ‘as we know it’ - The Globe and Mail

George Soros sees fall of financial system ‘as we know it’ - The Globe and Mail: "Michael Babad
Globe and Mail Update
Published on Thursday, Jun. 10, 2010 3:46PM EDT

Last updated on Monday, Jun. 21, 2010 10:49AM EDT

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Soros sees Act II
Renowned investor George Soros says Europe’s financial troubles means the world has “just entered Act II” of the financial crisis. “The collapse of the financial system as we know it is real, and the crisis is far from over,” Mr. Soros told a conference in Vienna. 'Indeed, we have just entered Act II of the drama, when financial markets started losing confidence in the credibility of sovereign debt. Greece and the euro have taken center stage, but the effects are liable to be felt worldwide.“
Among his other comments:
“We find ourselves in a situation eerily reminiscent of the 1930s. Keynes has taught us budget deficits are essential for counter-cyclical policies, yet many governments have to reduce them under pressure from financial markets. This is liable to push the global economy into a double-dip.”
'The simplest case of a purely financial bubble can be found in real estate. The trend that precipitates it is the availability of credit; the misconception that continues to recur in various forms is that the value of the collateral is independent of the availability of credit.'
'Credit-default swaps (CDS) are particularly dangerous"