Financial Crisis Has 'Only Entered Act II:' Soros

http://www.cnbc.com/id/37611313/

“We have just entered Act Two of the drama… when the financial markets started losing confidence in the credibility of sovereign debt,” he said.

Perils of Derivatives

Soros launched a thorough attack on derivatives and synthetic securities, questioning their overall usefulness.

In April, he wrote that the instruments had been used to “create imaginary value out of thin air.” He discouraged the securitization of loans .“Securitization separates interest of securers from interest of principals,” and particuarly credit default swaps , he said .

“Credit default swaps are particularly dangerous,” Soros said. “CDS ought to be available only to the extent that the buyers have legitimate insurable interest.”