A hedge, backwards
IT HAS BLOWN no good to the specula- tive 'hedge funds', whose exposure is the talk of the markets, and George Soros has been getting his name in the papers again. City and Suburban, as you may remember, went short of Mr Soros. He is the fund manager who sold sterling on its way out of the exchange rate mechanism, an easier and more rewarding exercise than taking candy from a baby. (Babies can be dirty fighters.) This did wonders for Mr Soros. It got him labelled as the man who broke the Bank of England. His portrait appeared on magazine covers, his views were solicited on Bosnia, bullion and other matters and, as the man whose name was supposed to move markets, he had it taken in vain by those trying some manipulation of their own. I took these as classic sell signals. This year has got off to a choppy start for Mr Soros. First he found himself a shareholder in Banesto, the overstretched Spanish bank known (after its flashy former president) as the Conde Nasty. Then he took a view on the yen and the dollar, and found that it cost him $600 million. Fixed rates of exchange are what can make currency mar- kets a one-way bet and the yen and the dol- lar have been spared them. The Bank of England is keeping an admirably straight face about Mr Soros's misfortunes, and this column is content to close its short position.
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