Hedge fund investor Michael Barry, made famous by the 2015 movie “The Big Short,” hinted Wednesday that the long-feared stock market crash is already underway.
Barry, who predicted stocks were headed for the “mother of all crashes” more than a year ago, has issued the latest warning, along with a chart showing the S&P 500’s sharp decline since hitting a high in January. issued.
“Still, I keep getting asked ‘Is it a crash?'”@BurryArchive Twitter account.
The S&P 500 – the broadest index of US stocks – has fallen more than 18% since January. The sharp decline coincided with growing investor fears that the Federal Reserve’s tightening policy to combat decades of high inflation could lead to a recession.
Barry has frequently warned of impending market catastrophe. In June 2021, he warned that irrational “fear of missing out” trading activity around cryptocurrencies and memetic stocks would likely end in disaster for overextended retail traders.
“All the hype/speculation is about pulling in retail before it becomes the mother of all crashes,” the investor tweeted. “As cryptocurrencies fall from trillions or memetic stocks fall from tens of billions, #MainStreet losses approach the size of a nation.”
Stocks have been rallying since June on investor optimism that the Fed could ease its policy stance. But the index picked up after Federal Reserve Chairman Jerome Powell suggested that rate hikes would continue, albeit with “some pain” for US households.
Burry’s Scion Capital Management sold its entire equity portfolio in the second quarter in anticipation of a collapse. The company has sold Long his positions in 11 stocks, including Google parent Alphabet, Facebook parent Meta, Bristol-Myers Squibb and Nextor Media Group, to private Florida-based prison operator Geo. invested in the group.
Barry’s bet on the housing market just before the 2008 collapse was scored in “The Big Short.” In recent months, he has amassed a huge social audience on his media while tweeting his views on the stock market, and has amassed more than one million followers on Twitter.
Cryptic investors usually delete their tweets shortly after posting.
Earlier this month, Burry warned that soaring consumer debt was another indicator of economic troubles ahead.
“Net consumer credit balances are growing at a record rate as consumers choose violence rather than cut spending in the face of inflation.” Barry tweeted.
“Remember the oversaving problem?
Earlier this year, when the S&P 500 posted its worst first-half performance since 1970, Barry warned that the sell-off was “probably half over.”