What did Michael Burry, ‘The Big Short’ investor, say about a possible downturn in the US economy?
In recent years the federal government has poured money into the economy in response to the pandemic and ‘The Big Short’ investor has voiced his concerns.
The United States economy is in a state of flux at the moment, attempting to contend with the fallout from the pandemic, Russian invasion of Ukraine and high inflation rates recorded in 2022.
Some experts have warned that an economic slowdown is certain to follow but the US government, like others around the world, is pumping in fresh cash in the form of new economic legislation. It is hoped that this will keep the economy buoyant but Michael Burry, the focus of film ‘The Big Short’, has outlined reason for concern with this way of thinking.
Burry rose to fame as the man who bet against the US housing market in the 2000s and turned a profit of around $800 million as a result. In 2022 he has warned that too much financial stimulus could hamper the economy.
“With recent spending bills, including the student loan forgiveness, now approaching $2 trillion this year, we have the emergence of the Fiscal Put,” the investor wrote in a now-deleted Twitter post.
“Not just for COVID anymore,” he added. “And will be as good for America’s economy as sugar for babies.”
Burry suggests that while the federal support can stave off decline in economic growth and asset prices it is no long-term solution. It’s not the first time that the 51-year-old has raised concern about fiscal aid and back in April he pointed to the trillions of dollars spent on the economy during the pandemic. He questioned whether consumers could ever fully replace the effect of those huge federal measures, implying that another economic crash is inevitable.
Why does Michael Burry delete his tweets?
While they are still there in public record, Burry opted to delete the posts related to his economic concerns, along with all his other tweets. The Scion Asset Management boss has repeatedly deleted and then reactivated his Twitter profile, sometimes after getting into public spats with other well-known figures.
Last year he become embroiled in a Twitter dispute with Tesla CEO Elon Musk, who described Burry as a “broken clock” for his criticism of the electric vehicle manufacturer.
In June 2022 Burry tweeted a list of major economic crises of the past two decades and hinted that he believed another one could be on the cards.
“Just getting one thing right is hard,” he tweeted. “1999 tech bubble, 01-05 value revival, 2005 housing bubble, 2009 almond farms, 2020 COVID bottom, 2020 lockdown horrors, 2021 meme stocks, 2021 crypto leverage, 2021 inflation, 2022 not done yet, late 2022 ????”
Predictably, Burry deleted his tweets after making that bleak prediction.