Really? Not entirely convinced but I think it’d be much harder to have a stand-off against a central bank than long yields which had reached theory defying, unacceptably low levels.
What soros did in my opinion, generate >100% returns on short, was quite extraordinary. You cn do it in smaller trades, but to put on a bet that big and win! That deserves some serious serious respect IMHO.
Soro > Paulson > Gross paper trade
totally agree. there’s a big difference between “breaking” a market and making it move. Soros is a god for this reason. he basically single-handed forced his trade to work on his timetable. even 2007 callers were probably mostly lucky as if regulatory or central bank steps were taken, 2008 could’ve been delayed that those who called it in 2007 could’ve been “wrong”. Gross may have even been partially responsible for instigating the move. if anything, it speaks to his unprecendently following as the bond king more so than his ability to make regal market calls.
My reasoning is that at the time, many factors were pointing to the pound’s peg (in the context of the EUropean Exchange Rate Mechanism) being unsustainable.
In the case of the bund, it is impossible to determine with reasonable certainty that ANYTHING currently going on is unsustainable in the short-term.
Soros had very solid reason to believe that he could pull off his campaign against the pound, based on solid facts. And by the way, while Soros initianed the sell off, much of the market was also selling pounds, so he was not alone against the Bank of England, obviously.
That he actually did have the balls to go through with it probably makes it the trade of the century and on that level I agree that Gross’ call is just a fart next to that.
In terms of the call itself, I maintain that predicting the bund’s short term movement is a much more complex thing.