Big Short's Michael Burry urges end of COVID-19 lockdown
Late last month, Michael Burry did something he’s never done. He tweeted.
“I became active on Twitter in the last week for the first time ever,” the Scion Asset Management founder told BNN Bloomberg in an email. “I just had a lot to say and get off my chest.”
Burry, who describes himself in his account as “the real weird one from the book and movie, etc,” is best known for betting against the U.S. housing market, ahead of the 2008 financial crisis.
He’s earned a cult-like following in investment circles. And he generally keeps a low profile.
But the novel coronavirus outbreak has compelled him to tweet.
“I joined Twitter because I was deeply saddened by a national shut-in that is devastating the livelihoods of Americans in many ways,” Burry said in the email. “I saw the prevailing narratives ignoring the masses that are not at lethal risk from COVID-19.”
His posts are largely critical of the lockdown measures imposed by governments during the pandemic and their growing impact on the economy — despite the fact that more than 9,300 people with COVID-19 have now died in the United States, and the country’s top infectious disease expert has warned the death toll could climb into the hundreds of thousands.
“Stay-at-home policies need not be universal,” Burry said in his email. “COVID-19 is a disease that is somewhat lethal for the obese, the very old, the already-sick. Public policies have no nuance because they want to maximize fear to enforce compliance. But universal stay-at-home policies devastate small and medium sized business and indirectly beat up women and children, kill and create drug addicts, engender suicides, and in general create tremendous misery and mental anguish. These secondary and tertiary effects are getting no play in the prevailing narratives.”
“Stay-at-home policies are only good for equipment and medicine shortages at or near peak disease,” Burry added. “But this could be achieved with the order affecting a much more targeted group of people.”
“Meanwhile, stay-at-home reduces and slows the development of herd immunity to COVID. Herd immunity is a fundamental step to putting this behind us.”
Initially, Burry’s tweets went largely unnoticed — perhaps because his real world followers are unaware the unverified @michaeljburry account is actually him. And Twitter is already riddled with fake Michael Burry accounts.
“I am very private, but what is going on in this country and globally supersedes that. In the end, Twitter is a risk-free activity,” he said in his email.
Over the weekend, Burry’s follower count started to pick up. He also added the words “personal account” to his Twitter bio.
“I have only been on Twitter for a week or so, but I figure l will just try to focus and not to get too deep in the weeds.”
Twitter did not exist when Burry first made a name for himself in 2005. He prodded Wall Street banks to create credit-default swaps to bet against bonds backed by risky home loans. The strategy paid off as borrowers defaulted during the 2008 crisis.
His story was chronicled in Michael Lewis’s best-selling book “The Big Short,” which led to an Oscar-winning movie. Burry’s character was portrayed by Academy Award-winning actor Christian Bale.
Last September, Burry began to raise new red flags, warning that the rapid rise of index funds had led to a passive investing bubble.
And last month, he told Bloomberg he had made a “significant bearish market bet that is working out for now,” without providing details except to say it was a trade of a “good size” against indexes.
“A global pandemic is absolutely a potential trigger for the unwinding of the passive investing bubble,” he told Bloomberg in an email in March. “With COVID-19, the hysteria appears to me worse than the reality, but after the stampede, it won’t matter whether what started it justified it.”
Burry’s recent tweetstorm, though, hardly suggests he’s cheering for an economic downturn.
“Unconscionable. Let's put [last Thursday’s] horrific jobless claims in perspective. This is not the virus. This is the response to the virus killing the U.S. and global economy, with all accompanying human tragedy,” Burry tweeted in reaction to the rapidly rising unemployment picture.
It’s worth noting Burry’s career path was initially headed towards medicine. He earned a medical degree from the Vanderbilt University School of Medicine. His interest in investing grew while he was a resident in neurology at Stanford Hospital in the 1990s. According to “The Big Short,” he would type his investment ideas onto message boards late at night.
On Saturday, California Governor Gavin Newsom said the state’s social distancing efforts are helping to slow the spread of the coronavirus and once again pleaded with residents not to congregate in large numbers.
Burry, whose firm is based in Saratoga, California, did not clarify in his emails to BNN Bloomberg if he himself is practicing social distancing; and although he has saluted medical professionals who are battling COVID-19 on the front lines, he declined to address the views shared on Twitter by some nurses and doctors, urging people to stay home.
“I will not comment on the view of some health care workers,” Burry told BNN Bloomberg.
Meanwhile, Burry has once again called out the U.S. Federal Reserve, highlighting the central bank’s ballooning balance sheet in a post on April 3.
Burry had previously pointed the finger at the Fed for its role in the 2008 meltdown.
“The Federal Reserve, in my view, hadn’t seen this coming and in some ways, possibly contributed to the crisis,” he said in a 2010 interview on Bloomberg Television.