George Soros, chairman of Soros Fund Management, has predicted "a deep recession is now inevitable and the possibility of a depression cannot be ruled out."
Speaking before the US House of Representatives committee on oversight and government reform, Soros admitted that hedge fund managers -- of which he is one -- played a pivotal role in pushing the financial markets to the brink.
But he also pointed to US financial regulators (and would presumably include UK ones, had he been called to account for himself here) for creating the bubble.
Soros has form when it comes to predicting downfalls. He's known as the man who broke the Bank of England, earning Â£1.1bn from 'shorting' UK sterling on Black Wednesday, 1992. (The BoE was forced to remove sterling from the European Exchange Rate Mechanism.)
Soros has advised the House -- gathered to consider hedge funds' role in the current crisis and if they need stricter regulation -- not to penalise hedgies too heavily.
He predicts natural selection will see off up to 75 per cent of the funds, with their assets "decimated" in the coming months -- a view shared by Alchemy private equity investor Jon Moulton in a recent comment for BNET and supported by industry figures claiming hedge funds lost $100bn (over Â£66bn) in October.
Hedge funds are not the worst performers in the asset class, according to analysts at Citi: "No doubt hedge funds are suffering large redemptions and liquidations, but the decline in industry-wide assets under management is being matched in the long-only space."
And the knock-on effect of poor hedge fund performance is unlikely to remain ringfenced. As a US senator noted, they pose "a very public peril when the bets go bad".
The only hope, then, is that Soros has lost his touch as a soothsayer. But I wouldn't put money on it.