The man who broke the pound

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When George Soros was a child, he thought he was God. Today he is a legend: the Man who Broke the pound, the ultimate gambler who set $10 billion on Black Wednesday and won. Soros has also made his name as the billionaire benefactor of the eastern bloc.

At 5.30 p.m. (10.30 p.m. in London) on September 15, 1992, George Soros was sitting in his Manhattan office, perched on the 33rd floor of a mirrored skyscraper overlooking Central Park. Confident that sterling could not stay in the Exchange Rate Mechanism, Soros instructed his head trader, Stanley Druckenmiller, to sell $10 billion-worth of sterling, taking a giant gamble that it would have to be devalued overnight.

That evening, in his Fifth Avenue apartment, he enjoyed a simple supper, cooked by his French chef, before retiring to bed. Next morning he was woken at 7 a.m. by a call from Druckenmiller telling him he had made $958m. Later he learned he had made further gains by siding with the French authorities against speculators attacking the franc. All in all, from the events of what became known as “Black Wednesday”, he made close to $2 billion.

Attractive, with thick wavy grey hair, apple cheeks and appraising eyes behind aviator glasses, Soros bears none of the accoutrements of a tycoon. His simple $60 watch and patterned tie could have been picked up at an airport shop. “I have a very, very abstract mind,” he says, “and as a result I don’t really take pleasure in material possessions. if I were a different person I’d buy old masters, but I don’t like to collect.”

Born in 1930 in Budapest he was the beloved younger son of a Hungarian Jewish lawyer, Tivadar, who had been a prisoner of war in Siberia between 1917 and 1921. He and his elder brother were doted on by their parents, particularly by their father, who worked very little when he came back from the war, spending most of his time with his sons. Soros often credits his success as a trader to the inflated sense of self his father gave him.

In 1947 Soros, aged 17, escaped the communist regime, leaving his parents behind in
Hungary and emigrating to London. His only source of income was money given to him by an aunt who had already fled to Florida. It was a desperately lonely period: he made few friends, partly because he couldn’t speak the language properly, partly because he had no money. One of his strongest memories is of being envious of the cat because it got sardines for breakfast and he did not. In 1949 he became a student of economics at the London School of Economics and then, later, in 1956, aged 26, he moved to New York with $5000, his share of the profit he had made on £1000 given to him by a relative to invest. Then in 1957 George’s parents also left Hungary for the States but, apart from one disastrous attempt to open an espresso stand on Coney Island, they did not work and George had to support them. He was still poor and when his father developed cancer in the early 1960s George was forced to ask the husband of a friend to help him find a surgeon who would treat him free of charge.

The turning point came in 1963. He was hired by Arnhold and S. Bleichroeder to advise American institutions on their European investments. Some time later, in 1973, he parted company with his employees. It was then that he set up the Soros Fund which, by the late 1970s, was already beginning to make large profits. Its initial investment of $4.8m has grown to nearly $6 billion, one third of which is the personal stake of Soros.

Since 1976, Soros, a native Hungarian, has ploughed more than $100m of his speculation profits into funding an 18-strong network of foundations spanning central and eastern Europe and Russia. Out of the $250m he plans to donate in the next two years, $100m has gone to set up an International Foundation for Science in Russia and $50m to the Hungarian Initiative in Bosnia. In “The Man Who Broke The Pound”, a Thames Television documentary shown in December, Soros said the money had made represented the equivalent of £12 for every man, woman and child in Britain, who, he said, really ought to have contributed it to the transformation of eastern Europe. “But I am happy to do it for them.”


Wordlist:

  • gambler – a man who risks money on the result of a game, race, or competition – hazardzista
  • benefactor – someone who gives money to help an organization or person – darczyńca
  • to perch (sth) on/in/above, etc – to be in a high position or in a position near the edge of something, or to put something in this position – umieścić się/ coś lub usadowić (się) na/w/nad itp.
  • skyscraper – a very high building – drapacz chmur
  • Exchange Rate Mechanism – the system in which a group of European countries agreed to control the value of their currencies so that exchange rates between the countries did not change beyond particular limits. This system existed before the euro started to be used as a currency – Mechanizm Kursów Walutowych
  • overnight – very quickly or suddenly – z dnia na dzień
  • to gain by – to get an advantage or something valuable from something – skorzystać na czymś
  • Black Wednesday – Wednesday, September 16, 1992, when the UK left the European Exchange Rate Mechanism and the pound (£) lost a lot of its value – Czarna Środa (Biała Środa)
  • to appraise – to examine something and judge it – oceniać
  • accoutrement – the equipment needed for a particular activity or way of life – wyposażenie, akcesorium
  • tycoon – someone who is very successful and powerful in business and has a lot of money – potentat
  • to dote on sb – to love someone completely and believe that they are perfect – świata poza kimś nie widzieć
  • to inflate – to make something such as a number, price, etc larger – zawyżać
  • desperately – a desperate situation is very bad or serious – rozpaczliwie
  • envious – wishing that you had what someone else has – zazdrosny
  • relative – a member of your family – krewny
  • attempt – when you try to do something – próba
  • initial – first, or happening at the beginning – początkowy
  • plough – to turn over soil with a plough – orać
  • to span – to exist or continue for a particular distance or length of time – obejmować
  • ought to – used to say or ask what is the correct or best thing to do – powinien coś zrobić

Na podstawie: Daily News & First Certificate Gold
Zdjęcie G. Sorosa: Wikipedia

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