The Big Short” investor Michael Burry says 2022 is like “watching a plane crash

Published: May 26, 2022
Updated: May 26, 2022
The Big Short

Michael Burry says 2022 is like “watching a plane crash

In a since-deleted tweet, famed American investor Michael Burry issued an unsettling warning about a repeat of the 2008 meltdown, which he predicted would soon inflict even more pain on U.S. markets.

Michael Burry, the founder of Scion Asset Management, rose to prominence after correctly predicting the housing market collapse in the United States, as detailed in Michael Lewis’ e-book “The Big Short,” which was eventually adapted into a Hollywood film.

“As I stated about 2008, it’s like seeing a plane crash,” Michael Burry wrote in the now-deleted tweet. It aches, it’s not enjoyable, and I’m not happy.”

Michael Burry previously reported a reoccurring dream he had after the property market collapsed in 2007. In his dreams, he would witness planes crash repeatedly.

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To be sure, the context-free message was largely open to interpretation, as Burry refused to respond to concerns about the tweet from Twitter users. Michael Burry also has a habit of deleting his tweets immediately after they are published.

After the worst start to a year in expertise shares history, purchasers remained hesitant on fears that shares may quickly reverse their trend at any point.

It’s worth noting that Burry’s cryptic tweet came after the release of April’s new home sales data in the United States, which revealed a nearly 30% drop in comparison to April 2021, according to data from the Census Bureau and the Department of Housing and Urban Development.

In other financial news, the S&P Global flash the U.S. buying managers index for the provider’s sector fell to a three-month low of 53.5 in May, down from 55.6 the month before, indicating that the vital U.S. provider sector may be slowing.

The Big Short  Michael Burry

However, the information isn’t completely harmful: While inflationary pressures have been widely blamed for the rapid re-rating in global equities, particularly in the United States, a quick look at the US 5-year break-even fee — a measure of the difference between the nominal 5-year yield and the yield on 5-year inflation-protected securities, which is seen as a gauge of inflation expectations 5 years in the future — reveals that it has retreated to below 2.9 percent, a drop of roughly 30 basis points. Regardless of Bill Ackman’s criticisms that the Fed isn’t doing enough to quell intransigent worth pressures, this suggests that long-term inflation expectations are beginning to cool.

Approximately a year ago, Burry warned that markets were on the verge of “the mother of all catastrophes.” 

Months later, U.S. stocks and bonds plummeted after the Federal Reserve announced intentions for a series of rapid rate hikes. More information about the Fed’s thinking will be released later Wednesday when the central bank releases the minutes from its two-day policy meeting earlier this month, during which it voted to raise its benchmark interest rate by 50 basis points.

Bury became well-known after correctly forecasting and betting on housing market crises between 2007 and 2008. During the COVID-19 outbreak, he has consistently drawn analogies between an asset price rise and a bubble. famous.

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In March 2021, he tweeted, “Today’s fad (#BTC, #EV, SAAS #memestocks) is like housing in 2007.”

“Overall, not wrong,” he explained, “but speculative euphoria taken to absurd heights from which the descent would be severe and terrible.”

Bury, who lost money on Tesla stock last year, has linked Elon Musk’s electric-vehicle company’s hoopla to the property boom.

In response to Tesla’s stock price skyrocketing, he tweeted, “Okay, my last Big Short got bigger and bigger and bigger too.” “Enjoy it while it lasts,” says the narrator.

Tesla’s stock has dropped 48 percent this year, resulting in a market capitalization decrease of roughly $600 billion.

Bury expects that the next market meltdown will be similar to the one that precipitated the global financial crisis in 2008.

Last summer, he raised the alarm about “the largest speculative bubble of all time,” warning regular investors not to invest in meme stocks and cryptocurrencies because they were destined for the “mother of all disasters.”

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