The news broke this morning: George Soros is fleeing the market. The man who sank the British Pound in 1992 announced Tuesday that he will close his flagship Quantum Endowment Fund to new investors, cash out outside investors, and run Quantum exclusively as a wealth-management vessel for his family.

According to Soros, all this stems from a new SEC regulation requiring hedge funds with more than $150 million in assets under management to report their activities to the regulator, and  Soros would like to dodge those regulations. Well, don't believe it. There's something bigger afoot here.

By the pricking of my thumbs …
Last week, Soros was making headlines for another reason entirely. As Business Week  reported, he had already liquidated 75% of his fund's $25.5 billion in assets, converting to cash. But $19 billion in cash is far more cash than the $1 billion Quantum's outside investors will be paid back. So why cash out the rest?

Because Soros fears the "unstable" situation in today's markets. Technical default in Greece. Threatened default in the U.S. There may be "no immediate collapse," but the titan grouses that he also doesn't see any "immediate solution." In short, Soros is scared. And he's not the only one.

… something frightful this way comes
Like Soros, we learned last week that Goldman Sachs (NYSE: GS) is also ratcheting back risk. In its last quarterly report, we found that the megabanker put 26% fewer assets at risk last quarter than in the year before. And I'm guessing the reason wasn't that it wanted to cause an earnings miss. I'm guessing the reason was that Goldman wanted to avoid something even scarier.

JPMorgan Chase (NYSE: JPM), too, is said to have been cutting back on risk last quarter. Same for Citigroup (NYSE: C) -- perhaps fearing the same instability that's spooked their peers. True, other bankers are rushing in where Goldman, JP, and Soros fear to tread -- Bank of America (NYSE: BAC) and Morgan Stanley (NYSE: MS) in particular are said to have made big bets on bonds and currencies. Then again, it wasn't so long ago that AIG (NYSE: AIG) thought there was easy money to be made in collateralized debt obligations -- and look how that turned out.

Foolish takeaway
Not everyone's worried about the markets today. Not everyone's cutting back to the extent of going "75% cash." Then again, not everyone is as smart as George Soros.