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Michael Burry warns the 'mother of all crashes' is coming
- throwkeep 5y ago> "The problem with #Crypto, as in most things, is the leverage," he tweeted. "If you don't know how much leverage is in crypto, you don't know anything about crypto." Wasn't a lot this knocked out when Bitcoin crashed to $30k? How much still remains?
- AznHisoka 5y agoIt was at 30k earlier this year. It needs to go below 10k for me to consider it crashing.
- rualca 5y ago> It was at 30k earlier this year. It needs to go below 10k for me to consider it crashing. Bitcoin's price was over $60k a couple of months ago. After it crashed, it tanked to around $30k. So to you a market valuation tanking 50% is not a crash, and it would need to tank over 80% to qualify as one?
- MrYellowP 5y agoIt's cryptos. 50% isn't uncommon and not really anything a seasoned crypto trader/hodler would care about.
- rualca 5y ago> It's cryptos. That means nothing. > 50% isn't uncommon So crashes are common on speculative bubbles. Does that mean these crashes are less of a crash?
- deleted 5y ago[deleted]
- mthoms 5y agoThe parent only said that 50% reduction for BTC was not cause for alarm for them because of how often such big drawdowns occur in crypto. Nothing more. Stop trying to pick a fight.
- ac29 5y agoThe largest exchange, Binance, has had over $50B of futures volume in the last 24 hours [0]. Futures are generally traded with leverage and in crypto trading, leverage can be huge - 100x is available many places. [0] https://www.coingecko.com/en/exchanges/derivatives https://www.coingecko.com/en/exchanges/derivatives
- Supermancho 5y agoTake a look after June 25th, 2021.
- rybosworld 5y agoBurry is addicted to predicting crashes. He managed to do pretty well on predicting the global financial crisis, but his timing was off by a few years. He still got famous though, and now people hang on to his every word. Doesn't seem to matter that the other 5 crashes he predicted never happened.
- rualca 5y agoI'm not aware of any failure in Bury analyses, or even any significant misprediction. The last two things I recall from Bury were his call last year that Tesla's stock price was ridiculously inflated, which he was proven right by the market once Tesla's price crashed from around $900 to around $600 at the moment, and his warning that passive investments were/are inflating stock prices in a similar pattern that he saw as a precursor to the subprime crisis. Do you have any example of what you consider Burry's biggest failed prediction? Because otherwise your comment boils down to an empty ad hominem
- MrYellowP 5y agoI am amazed about the ignorant reactions. They're ignoring actual reality in favour of commenting on some random guy saying something literally millions of others are well aware of.
- nostrademons 5y agoHe tends to be right in direction but hyperbolic in magnitude and early in timing. Aside from the housing bust and Tesla bearishness (which again is hyperbolic - "ridiculously inflated" would be 80% crashes like what we've seen in the dot-com bust or Bitcoin crashes), he predicted large-scale water shortages in 2015; a bubble in passive investing in 2019; hyperinflation in 2020; and now this stock market crash. I happen to think he's fundamentally right about all of these, but we aren't yet suffering from water shortages in a way that'd appreciably move the price; the S&P 500 is more than 50% higher than in 2019; we've seen high inflation (~5% annualy) but nothing close to hyperinflation (~50% monthly) so far; and about a -2.5% drop in the stock market over the last 3 days, which has otherwise set a record high. Valuations in meme stocks and crypto are high enough that I wouldn't want to go into them now, and I also think that we will see a huge stock market crash when & if the Fed ever raises interest rates. But his 2022 prediction for "the mother of all crashes" seems very early to me, given that the Fed itself is forecasting 2 rate hikes in 2023. And if his 2020 prediction for hyperinflation pans out, we won't see a stock market crash, we'll see the stock market go exponential (as denominated in dollars) as people flee cash and seek alternative forms of currency.
- alpineidyll3 5y agoInvestment personalities predicting crashes is a classic PR move, because if the predicted crash doesn't occur, there's no penalty. If it does, the person receives universal permanent adulation. Ultimately, this nonsense preys on the public's misunderstanding about how markets work, and that all financial positions are bets, which express a measure of certainty in an uncertain outcome.
- blackoil 5y agoIt should be easy to cite all the bad predictions he had made.
- polishTar 5y agoWell, that'd be exhausting, but it didn't take long to find that since he became a celeb-investor in late 2015 (when the movie came out), he's made similar predictions including: a couple weeks after the movie's release (https://nymag.com/intelligencer/2015/12/big-short-genius-says-another-crisis-is-coming.html https://nymag.com/intelligencer/2015/12/big-short-genius-say...), in 2017 (https://www.lombardiletter.com/michael-burry-stock-market-crash/10895/ https://www.lombardiletter.com/michael-burry-stock-market-cr...), in 2019 (https://www.cnbc.com/2019/09/04/the-big-shorts-michael-burry-says-he-has-found-the-next-market-bubble.html https://www.cnbc.com/2019/09/04/the-big-shorts-michael-burry...), and now obviously in 2021. Continually predicting the market is about to crash seems to be his thing.
- rkk3 5y ago> Continually predicting the market is about to crash seems to be his thing. It's a story the press love & he has been type cast.
- rualca 5y ago> he's made similar predictions including: a couple weeks after the movie's release (https://nymag.com/intelligencer/2015/12/big-short-genius-say https://nymag.com/intelligencer/2015/12/big-short-genius-say...), in 2017 His predictions sound spot on. Here's what Burry said about the state of the economy back in 2017. > Well, we are right back at it: trying to stimulate growth through easy money. It hasn’t worked, but it’s the only tool the Fed’s got. Meanwhile, the Fed’s policies widen the wealth gap, which feeds political extremism, forcing gridlock in Washington. It seems the world is headed toward negative real interest rates on a global scale. This is toxic. Interest rates are used to price risk, and so in the current environment, the risk-pricing mechanism is broken. That is not healthy for an economy. We are building up terrific stresses in the system, and any fault lines there will certainly harm the outlook. Now that half a decade passed between that article was published and right now, do you see any failure in the analysis?
- meowkit 5y agoI like Burry, but we really need a prediction market or some sort of tracker for these crash predictions. Really for “moon” predictions too. I’ve been seeing this prediction form Burry for a while.
- mikeschmatz 5y agoIt already exists -> The stock market.
- hungryforcodes 5y agoKey word in OP: PREDICTION.
- akomtu 5y agoI'm not sure why crypto is even relevant here. If Bitcoin drops to zero tomorrow, the economy won't budge. The real thing is the moratorium on evictions expiring this month, and with about 8 million americans haven't been paying rent and mortgage for a while, this opens interesting possibilities in July. My bet, though, is that the moratorium will be extended till end of year.
- ganoushoreilly 5y agoThat coupled with the cancelation of extended un-employment benefits in some states is definitely going to cause some friction.
- e9 5y agoIf Bitcoin goes to zero then a lot of people will get margin calls that they can’t meet and this will cause all sorts cascading failures
- animex 5y agoIsolated to the crypto ecosystem. The ramifications to fiat assets and financials is limited by the fact that there's not much free flow between crypto and fiat.
- e9 5y agoSo you think that if someone wipes out crypto they borrowed from exchange, then the exchange wipes out the assets they borrowed from some other account then person who lended crypto just looses and there is not much they can get back? So this way only crypto ppl loose?
- hungryforcodes 5y agoThat is only going to happen in leveraged Bitcoin markets like futures or options. The majority of crypto users are HODLers. Also with 10x-50x multiples, liquidations are going to happen way sooner than the apocryphal "zero". A move of 2.5% - 10% is enough to get a margin call.
- 5y ago
- MrYellowP 5y agoGoing through the comments it seems people aren't aware that this really is going to happen, regardless of who it says. You can't just ignore this massive mother of all bubbles that's kept inflating massively since the last year and you can't ignore that the S&P 500 had a dip below it's bottom trendline. You can't ignore that summer is here, lockdown restrictions are being lifted pretty much everywhere and that people will want to spend their money on holidays. You can't just ignore the billions of dollars which have been pumped into lumber, houses, stocks, cryptos, etc. People will want to cash out when they need the money. It's summer now and people could definitely use the money. This isn't rocket science. At all.
- ffggvv 5y agoif it was so obvious why wouldnt every trillion dollar asset manager in the world just dump now to avoid the crash?
- MrYellowP 5y agoYou'd just be ruining yourself, because the more you dump the lower the price goes. That'd not be a very smart strategy, wouldn't you agree? Selling is happening, slowly, so it's being bought up by everyone else who doesn't know better. Once the buyers know better things are going to go down much faster. Give it another week or two. Maybe a month. The dip below the bottom trendline of the S&P 500 is worrying and ignoring it is literally dumb.
- ffggvv 5y agonot really. you'd rather get out with some money then get out with none after the crash. Look at what happened with the archegos stocks. GS front runned the others getting out and was unscathed. you'd expect at least some of the medium/small fish to be getting out. Such as hedge funds who manage funds in the billions. not saying i disagree that things are overvalued, but i think its basically impossible to predict if/when there will be a correction/crash. I thought things were overvalued in 2016 and they just kept going up. if you believe what youre saying you should 100x leverage up on a bet on the crash since its so certain.
- LatteLazy 5y agoWe're always headed for a crash, crashes are cyclical. Each crash is always bigger than the last because economies are bigger. So "the mother of all crashes is coming" is like saying "we are having weather!"
- bronzeage 5y agoIf you talk about crypto crash without mentioning tether, you don't know what you're talking about. Biggest problem is the tether fraud. Not leverage, not parabolic price increase. The fact the whole thing is backed by fake tethers which have shady dealings with major exchanges.
- sunstone 5y agoRight or wrong Buffet is still sitting on a mountain of cash.
- ramblerman 5y ago> "The problem with #Crypto, as in most things, is the leverage," he tweeted. "If you don't know how much leverage is in crypto, you don't know anything about crypto." I will put my hand up, happy to admit I don't know anything. Can someone explain why crypto in particular has a lot of leverage? As far as I understood most people were just buying the underlyings directly and holding on.
- hatedburry 5y agougly mother xx Michael burry you deserve to lose all your money by betting against the bulls. Get ready for short squeeze and can't wait to see you go bankruptcy