Soros Goes Long on Italian Bonds

Remember MF Global, the John Corzine flameout? Guess who was able to write a check for $2 billion (with a B) to buy some of the one year maturity Italian government bonds from MF Global’s bankruptcy trustee? None other than the Daddy Warbucks of the left, George Soros. A few tidbits from the story in the Wall Street Journal today:

The Soros move, in turn, is something of a wager that a wider collapse of euro-zone finances will be averted. Italy has emerged as the center of the financial storm engulfing Europe because, following bailouts of Greece and other nations, Italy is widely considered too big to save should it run out of funds to service its debts, though some on Wall Street view pessimism surrounding the country’s finances as overdone.

Mr. Soros’s credibility as an investor rests in part from a controversial bet he made against the British pound in 1992, which netted more than $1 billion and is considered one of the most successful trades in history.

Scott Bessent, who managed Mr. Soros’s European investments for eight years earlier in his career, returned to Soros Fund Management this year as its chief investment officer. Mr. Bessent is believed to have played a role in the big European debt trade.

Mr. Soros recently took his $26 billion (with a B) fund into his private account:

After a disappointing second quarter, Mr. Soros decided to hand back $1 billion to outside investors and turned his firm into a “family office,” a move that allows it to avoid a new level of regulatory oversight facing many hedge funds.

Of course he did. Don’t want those nasty regulators getting in the way of a little currency manipulation for fun and profit.

His bonds mature in December 2012, giving him twelve months to make sure nothing happens to the value of his investment. Now we know why Obama stands ready to help bail out the Euro. He might as well have the Federal Reserve write a check to Soros for $2 billion (with a B) and be done with it.

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