Soros says deep recession inevitable, depression possible

George Soros, chairman of Soros Fund Management, testified at a House Oversight and Government Reform Committee hearing on Thursday.

Highlights:

#1. "a deep recession is now inevitable and the possibility of a depression cannot be ruled out."

#2. Hedge funds were an integral part of the financial market bubble which now has burst.

#3. Hedge funds will be "decimated" by the current financial crisis and forced to shrink their portfolios by 50-75 percent.

#4. Fed, Treasury Department and the SEC must accept responsibility to prevent market bubbles from growing too big in future.

#5. Impossible to prevent market bubbles from forming, but they can be kept within "tolerable bounds."

#6. Financial engineering should be regulated and new products approved by regulators, and that such regulation should be a high priority of the new Obama administration.

#7. A recent IMF credit facility not large enough to stabilize markets.