After laying out the flawed thinking in lending and borrowing that led to the current crisis, Soros called for financial authorities to act more aggressively. Then he turned philosophical. Soros noted that in order to understand what is happening, investors must understand the key point of his book: The Alchemy of Finance: “financial markets don’t tend to equilibrium, and misconception plays a significant role in human affairs.” And while mankind’s ability to control nature has grown (think of nuclear power, the energy explosion that created global warming), Soros argued that the ability to control human nature and behavior hasn’t quite kept pace (think of nuclear proliferation and the failure to halt global warming).

For the record, Soros is skeptical of the Federal Reserve’s ability to jolt the markets and the economy back to life with rate cuts. “I question how far the Fed can go in lowering interest rates given the reluctant of people to hold dollars. The ability of the Fed to come to the rescue is constrained to an extent it wasn’t before.” He said the U.S. has to lead by “being more interested in the system than in its own self-interest.” And when it comes to politics, Soros is fired up and ready to go. He’s backing Obama over Hillary Clinton, “because I prefer more radical change,” though he wouldn’t be terribly upset if Hillary Clinton were the next president.Soros has no relationship with the Obama campaign, however. “If he talked the way I talk, he would have no chance.”