Michael Burry gets bull forked as the miraculous recovery in financial assets continues while main street sputters with more than 2,100 store retail closures clocked already in 2023.
The Fed’s tightening policy now has the economy where they want it, in a chokehold with more than ten consecutive rate hikes, taking the Fed fund rate to 5-5.25% and 580 billion dollars of quantitative tightening. Home prices are already on a cliffhanger, falling 0.6% in 2023, with more declines expected in 2024 of 1.4%, according to conservative estimate (US) Mortgage Bankers Association. Of course, home prices will go rossy again in 2025, rising 2.1%, according to the MBA, after all, their business is flogging mortgages, so what do you expect?
“main street sputters with more than 2,100 store retail closures clocked already in 2023”
WEALTH TRAINING COMPANY
Meanwhile, the wheels have come off the US auto loan market as loan defaults skyrocket in a worse cost of living crisis in living memory
For the Repo man, it is deja vu 2008 Great Recession as his overworked tow truck runs out of space to store repossessed autos.
The mainstream narrative is we are not in a recession yet
Frankly, this feels like a great depression, with food being security tagged at grocery stores. An elite University in the UK is currently providing food parcels to desperate students, which is unprecedented. Students at less prestigious universities are being pushed into sex work. Children of a fallen empire?
Moreover, eight hundred job applicants were made for one legal job at the BBC.
We are in another great depression following the great financial crash of 2022, which slashed more than 30 trillion dollars off portfolio values in the worst year for technology stocks since the 30s and US treasuries in history. Mainstream media did not televise the Great Crash of 2022, the Great Depression of 2023, or WW3.
But legendary investor Michael Burry gets bull forked as his bearish tweets fall on the wrong side of this central bank-controlled bull “market”.
“eight hundred job applicants were made for one legal job at the BBC”
WEALTH TRAINING COMPANY
A few months ago, March to be exact, in The Big Short, Michael Burry warned that the 2023 market is mirroring dot-com and housing crashes.
In a now-deleted March 12 tweet, the investor who famously predicted the 2008 financial crisis issued a warning about the current state of banking and the financial world while blasting Silicon Valley Bank’s (SBV) bosses for their recklessness.
“2000, 2008, 2023, its always the same. People full of hubris and greed take stupid risks, and fail. Money is then printed because it works so well,” tweeted Michael Burry.
Big short, Michael Burry drew comparisons between Silicon Valley Bank and Enron, the energy-trading giant that infamously went bankrupt due to accounting fraud in 2001. Burry’s warnings have drawn attention to the need for greater transparency and accountability in the financial industry.
“greatest speculative bubble of all time in all things” – Michael Burry
Michael Burry has been waving red flags about the economy and the stock market for years.
He also warned of the potential for the “greatest speculative bubble of all time in all things.” Michael Burry was not a lone voice in the wilderness, other investors also warned about the bubble of everything.
And as predicted, the bubble of everything burst in 2022, which resulted in a payday of 100 million dollars for Michael Burry.
Here is the zinger; we tried quantifying Michael Burry’s bull-forked bearish tweets into tangible losses.
It is a classic case of do not analyse what the grandmasters of the game say, tweet, instead analyse what they do.
You see, while the doom-gloom investor was standing on his soapbox warning about the apocalypse, his hand was doing the opposite.
“Scion Asset Management invested in some of the bank stocks that fell the most after the collapse of three banks at the end of Q1, according to the firm’s latest 13F filing” – Wealth Training Company
Michael Burry’s Scion bought bank and energy stocks in Q1, according to SEC filings
Scion Asset Management invested in some of the bank stocks that fell the most after the collapse of three banks at the end of Q1, according to the firm’s latest 13F filing.
Highflying rogues at work in a zero-sum game?
So Michael Burry’s tweet did not reconcile with his share dealings. For the bigs to win, there have got to be many losers and the more convincing the trap, the fatter the feast.
If you cannot spot the trap, you could be in it
Michael Burry gets bull-forked, piece underscores the benefit of technical analysis. We remember a piece entitled, Technical Signals Bear Market Is Over in March. “The 10-month SMA has a reliable track record of predicting the end of bear markets since the 1960s,”.
Maybe the smartest players in the room ignore the noise and focus on the technicals.
Perhaps Michael Burry getting bull forked is a case of ignoring the noise
Think about it, they want you to sell so they can buy cheap.
Maybe the Fed’s definition of a soft landing to tackle inflation could be the main street in a recession as the Fed market fixers try to ignite animal spirits in the financial market to cushion impact on the real economy. But there is not enough of a rally to ignite animal spirits. What happens next when nobody believes in the rally?
