Billionaire investor George Soros spoke to BBC business editor Robert Peston and warned of the following:

• The “acute phase” of the credit crunch may be over, but the effects on the real economy still have yet to be felt.
• The “financial bubble” of the last 25 years and post-World War II “super-boom” era could be ending.
• The U.S. economy could experience a more serious and drawn-out slowdown than most anticipate:

BBC: So, do you think we’ll see a serious recession in the United States?
SOROS: I think more serious that currently anticipated, and certainly longer. The prediction that by the end of the year we’ll be moving out of it, I think, is without foundation.

The United Kingdom may be worse off that the United States because so much of their recent prosperity depended upon a large financial sector and increasing home prices.

• Financial assets are over-priced. BBC News economics reporter Steve Schifferes wrote yesterday:

Mr Soros believes that oil and other commodities are over-priced, but he sees little chance of the price of oil coming down until there is a big slowdown in the richer economies…

He also said that stock markets are still underestimating the severity and length of the economic downturn, especially in the US, and are now having a “bear market rally.”

A 2 minute 36 second portion of the BBC News interview can be accessed here.

Source:

“Soros warns global boom is over”
Steve Schifferes
BBC News, May 19, 2008

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