George Soros $1 Billion Bet !!!


$1 Billion bet in July of US downgrade brings questions of insider information

Kenneth Schortgen Jr, Finance Examiner
August 6, 2011 – Like this? Subscribe to get instant updates.

In late July, a mystery investor or hedge fund made a nearly $1 Billion bet that the US would lose their AAA credit rating, and on August 5th when S&P issued its downrade to AA+, that investor now stands to make a return of 1000%, and leads to serious questions of who the mystery trader is, and did they have insider information well before hand.

In 1992, George Soros nearly destroyed the British Pound, and made a profit of $1 Billion by betting agains the currency. The British government had been propping up the Sterling for some time, and this led to a weakness that Soros was able to exploit when rejection of the Maastricht Treaty led to a massive devaulation of the Pound, and a huge profit for his bet.

That belief, or perhaps knowledge of events is very similar to the bet placed against the American credit rating just two weeks ago.

Someone dropped a bomb on the bond market Thursday – a $1 billion Armageddon trade betting the United States will lose its AAA credit rating.

In one moment, an invisible trader placed a single trade that moved the most liquid debt market in the world.

The massive trade wasn’t placed in bonds themselves; it was placed in the futures market.

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.

The value of the trade was about $850 million dollars. In simple terms, if that was a direct bond buy, no one would be talking about it.

However, with the use of futures, you have to have margin capacity behind the trade. That means with a single push of a button someone was willing to commit more than $1 billion of real capital to this trade with expectations of a 10-to-1 return ratio. – ETF DAILY News

While the identity of the ‘mystery investor’ remains unknown, many indicators do point to George Soros as the principal benefactor. First, Soros has been tied to the Obama administration since the 2008 elections. In February of this year in fact, a Soros investment fund profited well on President Obama’s new green energy policies. Secondly, right about the exact same time as the $1 Billion bet took place on the US credit rating downgrade, Soros made public the move to divest his management fund of outside investors, and quietly go private. This move allows him to make trades and investments without being required to notify the SEC under the new Dodd-Frank act passed in Congress last year.

Of course, this mystery bet could have been made by any Hedge Fund that followed Soro’s course of action, and went private on their own. However, very few people have the inside contacts with the Treasury Department and Obama administration that Soros does, and the historical evidence does point strongly to this bet being one that he has done in the past.

While the point here is not necessarily who made the bet on the a US downgrade, but rather, the question is how much was known by the Obama administration and Treasury Department in advance of a downgrade coming? In April of this year, an interview with Secretary Tim Geithner led him to say unequivocally that there is no chance of the US being downgraded, and assuredly, the government has close communication with the ratings agencies through the Treasury and the Fed. This downgrade did not come as a surprise to the government, only the timing of it may have been unwanted.

There is a saying when it comes to theft in America. If you steal $100, you go to jail, but if you steal $1 Billion dollars, you work on Wall Street. The SEC and American justice system has been a process that picks and chooses whom it prosecutes for insider information, and the higher up you are in the banking system, the less likely you are to be investigated, or prosecuted. Since the 2008 credit crisis, small fish such as Bernie Madoff were made public scapegoats, and brought to trial, but larger names such as Angelo Mozillo of Countrywide simply got a slap on the wrist, and a large retirement.

The timing of a massive bet of nearly $1 Billion dollars on the US losing its AAA rating just two weeks before S&P made the call on August 5th is eerily similar to what took place in 1992 on the British Pound. There is no doubt that someone had insider information that a ratings downgrade was coming, and only time will tell if the mystery investor is ever revealed who just made $10 Billion dollars off the investment.

Continue reading on $1 Billion bet in July of US downgrade brings questions of insider information – National Finance Examiner |

Timmy Geithner “No chance of Downgrade !!!:

One Response to “George Soros $1 Billion Bet !!!”

  1. Did George Soros Make $1B betting S&P would Downgrade United States credit rating? | Politisite Says:

    […] George Soros $1 Billion Bet !!! ( […]

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