Soros FTSE shorting: 'No comment'

Is George Soros selling the UK short? Well-placed City sources say the financier-cum-philanthropist is convinced the FTSE and perhaps the Dow Jones are heading for a dramatic tumble and has been placing bets accordingly.

In the last few weeks, as more economic gloom has emerged, the pace of these bets has stepped up, it is said, with nephew Peter Soros taking charge of the UK arm of this operation — though that's not confirmed.

In 1992, George Soros famously bet against the pound, eventually forcing it out of the European Exchange Rate Mechanism and earning himself a profit of £500 million (it seemed like more at the time).

The word is he expects a much higher return from shorting the FTSE, though it is not clear if he is betting against individual stocks or just the whole market. Soros's man in New York, who doesn't like to be named and who speaks off the record if at all, points out that the Quantum Fund is $20 billion in size and takes any number of different investment positions at any one time.

Of course the fund will be short of some UK equities and long of others. It doesn't follow that Soros is betting on a market collapse just because he's got a few short positions.

The spokesman was sanguine about Soros being revealed as heavily short the FTSE, claiming this would be little more than "a nuisance" and arguing that we in the UK get way too excited by his activities because of all that old stuff about how he "broke the Bank of England". "He is a character in your national drama," was the phrase used.

Still, some City folk are irritated and want him outed.

Press cuttings don't quickly suggest Peter Soros is an experienced hedge investor — he's variously described as a former investment banker, a freelance columnist or the husband of Flora Fraser.

Reached by phone, Soros was far from keen to talk.

Could he confirm he was working closely with George Soros? No comment. Is he active in the market? No comment. Would we be wrong to suggest he was heavily shorting the FTSE? No comment.

Maybe he just doesn't like talking to reporters. Or maybe uncle George was on the other line screaming "sell".

- Simon English, Evening Standard