By Simon Kennedy and Rainer Buergin
October 5, 2009 (Update2)
SourceOct. 5 (Bloomberg) -- Billionaire investor George Soros said the U.S. economic recovery will be sluggish as “basically bankrupt” financial companies and indebted consumers impede it.
“The U.S. will be very slow in recovery,” Soros said in a panel discussion in Istanbul, where the annual meetings of the International Monetary Fund and World Bank begin tomorrow. “The United States has a long way to go.”
Financial companies in the Americas have written down or lost $1.1 trillion since the financial crisis began two years ago, while the U.S. savings rate has risen to its highest level in 24 years as consumers retrench. Soros signaled a stronger rebound in Europe, a view at odds with the IMF. The Washington- based lender last week said the U.S. economy will grow 1.5 percent next year, five times the pace of the euro area.
“Europe has been less damaged,” Soros said today. The European Central Bank may be faster than the Federal Reserve to start withdrawing stimulus, he said, adding that it is “too early, certainly for the United States,” for policy makers to start reversing their emergency measures.
Policy makers may struggle to revamp the regulation of the financial system now that the economy and markets are recovering, he said. “It will be very difficult to accomplish,” he said. “The crash of 2008 now seems like a bad dream and people like to treat it like a bad dream and forget about it and get back to business as usual.”
To contact the reporters on this story: Simon Kennedy in Istanbul at
skennedy4@bloomberg.net; Rainer Buergin in Istanbul at
rbuergin1@bloomberg.netLast Updated: October 5, 2009 06:56 EDT