'Big Short' investor Michael Burry warns that 'silliness is back' in markets despite the recent rebound
https://markets.businessinsider.com/new ... ack-2022-8
Households continue to spend as if nothing had happened.
Believes that consumers' growing indebtedness poses a serious risk to the economy.
U.S. consumer borrowing increased by $40.2 billion in June from the prior month. This was the second-biggest increase ever.
"Nasdaq now up 23% off its low. Congratulations, we now have the average bear market rally. Across 26 bear market rallies from 1929-1932 and 2000-2002, the average is 23%. After 2000, there were two 40%+ bear market rallies and one 50%+ rally before the market bottomed."
Burry thinks, however, that the worst is yet to come. He says he foresees a household debt crisis that would pose a serious danger to the economy.
COVID helicopter cash taught people to spend again, and it's addictive. Winter coming.
Liquidated its entire portfolio of U.S. stocks as of June 30.
Burry only owned shares of a single company, Geo Group, which invests in private prisons and mental health sites.
"And yet I keep getting asked 'when crash?'" Burry tweeted on Aug. 31.
The S&P 500 has fallen 18% since its high in December
"Early 2002, investors were asking me why i wasn't buying WorldCom," the legendary investor posted on Twitter. "Feels like that now."
He didn't provide further details, like giving the names of today "WorldComs."
"Sell," wrote the financier on Jan. 31 on his Twitter account. He didn't say anything more. The investor is accustomed to cryptic messages.
Burry's pessimistic message comes days after he suggested the current equity-market rally was a mirage.
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