George Soros recently spoke in Sri Lanka at an economic forum and warned that the world was at risk of a similar crisis to that of 2008s. Soros is famously known for forcing the pound out of the mechanism in 1992. His remarks came after China suspended its benchmark CSI 300 stock index after just fifteen minutes of trading. The first time that day the market leapt 5% triggering a 15 minute circuit breaker. When fixed the market dropped another 2% forcing them to close the trade for the day. This was the second time in a week. According to an article in business, Insider, http://www.businessinsider.com.au/george-soros-markets-remind-me-of-2008-financial-crisis-2016-1 the halting of the market was done under the new regulations that were designed to prevent panic selling.
The Guardian, Business, Economics http://www.theguardian.com/business/2016/jan/07/global-markets-turmoil-echoes-2008-financial-crisis-warns-george-soros George Soros is quoted saying that China had serious adjustment problem. His comparison of the current scenario indeed would be taken seriously based on his expertise and previous experience. Many financial experts, however, seems not to agree with his view. Mark Ostwald in the same article is quoted to have said that Soros parallel comparison of the two crisis would “only serve to cast a long shadow” over the markets. The crisis is not parallel to 2008. This is because there is no reckless lending, wayward blindness to credit sector risk, irresponsible supervision and bad regulations of the market.
CNBC Economy (http://www.cnbc.com/2016/01/07/soros-its-the-2008-crisis-all-over-again.html ) also mention U.S. stocks index futures had sharp lower opens. The focus is however mostly in China. Analyst have shown concern over Chinese market regulators who seems to have no grasp of the market. The circuit breakers seem not to be of much help to them. There have been new rules though by the Chin securities regulator, the number of shares that can be sold by major shareholders.
George Soros had warned of a similar catastrophe back in 2011, but it never came to pass. His worries cannot be ignored. Likewise, investors must be cautious moving ahead.
No two crisis are the same. An article in NASDAQ website (news) http://www.nasdaq.com/article/why-george-soros-is-wrong-when-he-says-this-is-like-2008-cm562380, investors, should be hopeful. The present crisis has been observed for a long period and this period of turmoil is of no shock. What causes huge reactions in the market sometimes is the shock. 1998 was a perfect scenario when there was a huge reaction causing a market to a crisis. All this could also be as a result of the strengthening dollar or weakness in China and other emerging markets.
2016 could be more close to 1998 than it is to 2008. However bad the current scenario is, one can almost be sure that it will not be like the previous scenario. The current crisis has been detected and is being observed carefully and for that reason, past mistakes are not likely to be repeated.