Hedge Fund Legend Soros Speaks Up

George Soros has always had a unique view on the global economy. Fleeing Hungary as a young child influenced him profoundly, and he brings a unique perspective to the global economy, of which he has been a major player for years now.

Soros' political views have long rankled conservatives, with the firestorm over MoveOn.org merely the latest dustup. A recent interview with Maria Bartiromo might have cleared the air, although I doubt we have heard the last of it:

Fox News and others are calling you the man behind MoveOn.org. How much have you given to MoveOn during this election cycle, and what influence do you exert over MoveOn and its message?
I have absolutely no influence over their decisions. I had nothing to do with the [Petraeus] ad. But I'm a convenient target. [A spokesman interjected that Soros has not given any money to MoveOn since 2004. He did not disagree.]

Did you think that the ad questioning the integrity of General Petraeus was out of line?
It's in line with other similar ads and is basically no worse than many ads from the right wing.

Bartiromo is on a roll, snagging interviews with everyone from Greenspan to President Bush. But her Business Week interview might provide the greatest interest for investors, as he ruminates on everything from the U.S housing market to the burgeoning influence of sovereign funds:

How much oomph has the U.S. housing market taken out of global economic strength—which has been the redeeming factor in the whole economic picture, right?

Yes. I think that is going to continue and counterbalance the weakness in the U.S. So I don't expect a worldwide recession, but a rebalancing between the U.S. and the rest of the world.

So the strength around the world continues?

I think there’s a very good chance, and also that sovereign wealth funds [entities that invest on behalf of a nation] will be investing in emerging markets, particularly India, Latin America, and Africa, as much as those markets can absorb those investments. So you have an investment boom going on in those countries.

Even with the sovereign funds becoming more aggressive investors—Abu Dhabi buying into the Carlyle Group, Qatar buying into big Western businesses—some people worry that Middle Eastern money is being turned away. Is America too protectionist about such investments?

There’s a tremendous transfer of wealth under way. Part of it is going to the oil-rich countries and part to China. But there aren’t enough financial instruments available to those countries to put their surplus in. So they have set up sovereign wealth funds. Unless we allow those funds to invest, the system is going to break down. These wealth funds are opaque, and they need to become transparent. But once they meet the rules of disclosure, they should be allowed to invest for the system...to survive.

Soros might be slowing down at 77-years old, but his comments are food for thought, like him or not. And if you expected him to mellow in his old age, forget about it.

Facetime with Maria Bartiromo
Business Week
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The content contained represent the opinions of 1440 Wall Street. This commentary in no way constitutes a solicitation of business or investment advice. It is intended solely for the entertainment of the reader, and the author.

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