Michael Burry, the famous investor behind “The Big Short” warned of rising inflation and a huge market bubble.
Burry warned in June that the “mother of all crashes” is coming back in June.
He also railed against the Federal Reserve following the report that two of its regional presidents were trading stocks and securities last year.
Business Insider reported:
“The Big Short” investor Michael Burry blasted the Federal Reserve for its trading scandal, underlined the inflation threat using Costco, and deleted his Twitter account yet again this week.
“Bond & stock markets depend on a Fed stripped of all credibility,” Burry said in a now-deleted tweet. He cited the central bank’s mismanagement of the global financial crisis, its decision to cut interest rates three times in 2019, and the revelation this month that two of its regional presidents, Robert Kaplan and Eric Rosengren, traded stocks and other securities last year.
The Scion Asset Management chief attached a screenshot of Kaplan’s latest financial-disclosure form, which showed the official traded millions of dollars’ worth of Tesla, Chevron, Johnson & Johnson, and other stocks in 2020. Both Kaplan and Rosengren announced their resignations this week, the latter citing health issues.
Burry – who has warned of a huge market bubble and predicted the “mother of all crashes” is coming in recent months – also rang the inflation alarm. “Inflationary mindset is not something you’d want to short,” he tweeted. “Ask Costco.”
Costco’s finance chief, Richard Galanti, noted the rising cost of goods such as oil, coffee, and nuts during the big-box retailer’s earnings call last week. He listed a raft of inflationary pressures including higher labor, freight, and commodity prices. He also noted shortages of containers and products such as computer chips, greater transportation demand, and delays at shipping ports. “It’s a lot of fun right now,” he quipped.