Bessent: 1992 pound short risked only 2.5% against massive asymmetric upside
Scott Bessent · Scott Bessent - Macro Maven (EP.415) · Nov 4, 2024 · at 29:01
Scott Bessent, founder of Key Square Group and former partner at Soros Fund Management, explains the mechanics behind George Soros's famous 1992 Black Wednesday trade against the British pound.
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“Because of the exchange rate mechanism, the Bank of England or the British government had to buy an unlimited number of pounds to keep the pound in a quarter. So it was an asymmetric bet. We could push them up against the wall And the most they could push us back was two and a half percent, and if the corridor broke, we can make whatever in a day, and we did.”
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