The New America Foundation hosted a conference call with financier and author George Soros this morning during which he shared ideas from his recent book, A new Paradigm for Global Financial Markets: The Credit Crisis of 2008 and What it Means. Soros said, albeit with some chagrin, that the current financial crisis "pulled him out of retirement." Apparently it pulled him far enough to write a new book about boom and bust cycles, regulation of credit, and the current financial turmoil. I wonder whether his book was due to some sense of social obligation or he was just drawn by the excitement of the current crisis. Given his philanthropic efforts, I suspect it was a combination of both.

I want to make three comments after listening to the call. First, George Soros came off as charming, self-effacing and brilliant. His analysis of booms and busts are correct and insightful, but not revolutionary. And finally, his prescriptions for policy action are not concrete, but they get at the heart of the problem of our current regulatory structure. There is little need to comment on the first topic, so I'll skip right to the second two.

As I understand he did in Alchamy of Finance, Soros incorporates a fair amount of philosophy into his new book. During the call, he spoke about the theory of reflexivity - in which those acting in the market and the market itself reflect on one another and create positive-feedback loops. Where reflexivity takes place, misconceptions are self-reinforcing and therefore cause unsustainable rises or falls in asset prices. In such an environment, he says, the market fundamentalist concept of general market equilibrium punctuated by random corrections is innacurate. Yet it was hard to gauge where Soros believes the economy currently stands--at the beginning middle or end of the current crisis? On the one hand, he mentioned that the "acute phase" of the crisis was over. On the other, he said the potential losses from synthetic financial products, especially credit default swaps, could still be disastrous.

Where ever we stand, Soros emphasized that rapid fluctuations in the markets are dangerous and should be moderated by central banks. Since Soros blames central banks for ignoring asset bubbles, he argues that the era of a singular focus on monetary policy must come to an end and be replaced by the "art" of preventing excesses. Here he is not alone. This call for increased regulation was echoed by the IMF chief economist Simon Johnson, in a recent report which said that central banks must pay closer attention to housing prices and attempt to avoid asset bubbles. I would add to Soros's argument that regulation on credit must also include policy that avoids huge current surpluses in foreign countries, which are recycled back in the United States in the form of cheap credit.

Two additional points of particular interest and insight during the Soros call. One, he believes that the U.K. housing bubble is like a "shoe waiting to drop." See John Authers of the FT on the short view. The evidence seems convincing. I will be doing more research on this over the weekend.

Also, Soros mentioned a worldwide move away from currencies. Many now believe that countries are moving away from the dollar, but fail to recognize that the euro and the pound sterling are not viable alternatives given their high prices. This is the beginning of what Soros thinks will be a dramatic move into other asset classes by sovereign wealth funds and institutional investors.

I am still waiting for Mr. Soros's response to a question on whether China is decoupled. I was told I should have an answer by next week. Like me, I believe he remains optimistic about China's contribution to global demand.