Bonds Bet Pays Off For Soros

WASHINGTON -- In the weeks leading up to Monday's stock market plunge, global traders like George Soros bet billions of dollars on Treasury bonds, according to professional traders and investors familiar with his firm's activities.


When the storm hit stocks, Soros and other speculators pocketed hundreds of millions of dollars by selling the bonds at far higher prices to fearful mutual and pension fund managers who wanted to get out of stocks and into the safety of government bonds, the sources said.


Officials of the Soros Organization declined public comment on its activities. But other sources said the firm, which manages about $20 billion in overseas money from offices in New York and London -- it is not allowed to take on U.S. clients -- did not escape unscathed by the recent decline in stock prices. On Monday, the Soros Organization lost more money on stocks than it made on bonds, the sources said. But the move into bonds significantly offset the stock losses.


Earlier this year, Soros bought about $10 billion in U.S. Treasury bond futures contracts, which gave the firm the right to buy government bonds later at a set price. The firm believed that the currency troubles in Asia would slow Asian and U.S. economic growth.