Would you be willing to bet a billion dollars that stock prices are going to collapse? Needless to say, only an extremely small fraction of the population has that much money. And once you have accumulated a billion dollars, one would think that you would be extremely determined to protect it. But that is not what Michael Burry is doing.
(Article cross-posted from The Economic Collapse Blog)
During the financial crisis of 2008, his massive bets against the housing market made him incredibly rich, and now he is making another “big short”.
According to CNN, Burry has bet over 1.6 billion dollars that the stock market is going to crash…
Michael Burry, the “Big Short” investor who became famous for correctly predicting the epic collapse of the housing market in 2008, has bet more than $1.6 billion on a Wall Street crash.
Burry is making his bearish bets against the S&P 500 and Nasdaq 100, according to Security Exchange Commission filings released Monday. Burry’s fund, Scion Asset Management, bought $866 million in put options (that’s the right to sell an asset at a particular price) against a fund that tracks the S&P 500 and $739 million in put options against a fund that tracks the Nasdaq 100.
Burry is using more than 90% of his portfolio to bet on a market downturn, according to the filings.
Does he know something that the rest of us don’t?
If he is wrong, he will look like a fool. But if he is right, he will be a legend.
Michael Burry places a huge leveraged short position on the stock market with put options.
The Big Short Version 2.0 ? pic.twitter.com/8SHtZ0r4V9
— Wall Street Silver (@WallStreetSilv) August 14, 2023
Without a doubt, the stock market is ripe for a crash.
So far in 2023, the S&P is up about 16 percent and the Nasdaq is up about 38 percent…
The S&P 500 and Nasdaq 100 have both notched big gains so far this year. They’re up nearly 16% and 38%, respectively.
In the mid-2000s, Burry was famous for placing a wager against the housing market and profited handsomely from the subprime lending crisis and the collapse of numerous major financial entities in 2008. The event was chronicled by Michael Lewis in his bestseller “The Big Short: Inside the Doomsday Machine” and later adapted into a film where Burry was played by Christian Bale.
This stock market rally has been happening even though the overall economy has been really struggling. As economic activity has slowed down, demand for trucking services has slumped, and at this point the Cass Freight Index is down 8.9 percent on a year-over-year basis…
In terms of shipment volume in the for-hire market, the Cass Freight Index – which is concentrated on trucking but includes rail and other modes of transportation – fell again in July, to the worst July since July 2020, and July 2016, which had been in the middle of another freight recession (fat red line in the chart below).
Year-over-year, the index was down 8.9%, and compared to the peak in this cycle, in May 2021, it was down 12%.
And UPS and FedEx are both reporting that demand for package delivery is way down as well…
We’ve heard similar messages from UPS and FedEx. UPS reported a 9.9% drop in daily package volume for Q2, with June volume down 12.2%. FedEx reported an 18% drop in average daily shipments in its quarter ended May 31.
The economy is really struggling right now, and so the stock market should not be booming.
But for the moment, the rich are getting richer while homelessness absolutely explodes all over the nation. The following comes from Zero Hedge…
The Biden administration’s fight against homelessness is faltering ahead of the 2024 presidential election cycle.
A new Wall Street Journal report reveals the number of Americans ending up on the streets is happening at a “record rate” despite ‘Bidenomics‘ being touted as an economic savior for the middle class. Every working-class folk understands Biden’s policies have been absolutely horrendous — two years of negative real wages forced many to rack up insurmountable credit card debt during the highest interest rate environment in a generation while draining personal savings — all to make ends meet, like putting food on the table and paying rent. Compound this with the worst housing affordability period in decades (maybe relief in 2H24 or ’25), and it’s not hard to understand why the homelessness crisis is beginning to spiral out of control for Democrats.
I could go on and on about the dire state of the U.S. economy, but I am not going to repeat all of the statistics that I have shared in other articles over the past few weeks. if you are interested in seeing those numbers, this is where you can find them…
- “9 Signs That The U.S. Consumer Is About To Break”
- “7 Trends Which Indicate That Economic Disaster Is Approaching Very Rapidly”
- “10 Signs That The Mainstream Media Is Not Telling You The Truth About The Economy”
Of course it isn’t just the United States that is experiencing an economic slowdown. As Jim Rickards has aptly noted, “major economies are falling into the ditch” all over the globe right now…
It’s becoming increasingly apparent that we’re looking at a global recession, if not a global financial crisis. These are highly unusual. It’s often the case that one or more major economies are in recession while others display growth and help pull the weak performers out of the ditch.
But today, we’re facing a case where, one after the other, all of the major economies are falling into the ditch.
So many of the things that we have been warned about for a very long time are starting to happen right in front of our eyes.
We are clearly headed for very big economic trouble, and that should be apparent to everyone at this point. Michael Burry is planning to make a giant pile of money when the stock market finally crashes just like he did in 2008.
Will he be correct? I don’t know, but you certainly cannot accuse him of not putting his money where his mouth is.
Sound off about this on our Economic Collapse Substack.
Michael’s new book entitled “End Times” is now available in paperback and for the Kindle on Amazon.com, and you can check out his new Substack newsletter right here.
Five Things New “Preppers” Forget When Getting Ready for Bad Times Ahead
The preparedness community is growing faster than it has in decades. Even during peak times such as Y2K, the economic downturn of 2008, and Covid, the vast majority of Americans made sure they had plenty of toilet paper but didn’t really stockpile anything else.
Things have changed. There’s a growing anxiety in this presidential election year that has prompted more Americans to get prepared for crazy events in the future. Some of it is being driven by fearmongers, but there are valid concerns with the economy, food supply, pharmaceuticals, the energy grid, and mass rioting that have pushed average Americans into “prepper” mode.
There are degrees of preparedness. One does not have to be a full-blown “doomsday prepper” living off-grid in a secure Montana bunker in order to be ahead of the curve. In many ways, preparedness isn’t about being able to perfectly handle every conceivable situation. It’s about being less dependent on government for as long as possible. Those who have proper “preps” will not be waiting for FEMA to distribute emergency supplies to the desperate masses.
Below are five things people new to preparedness (and sometimes even those with experience) often forget as they get ready. All five are common sense notions that do not rely on doomsday in order to be useful. It may be nice to own a tank during the apocalypse but there’s not much you can do with it until things get really crazy. The recommendations below can have places in the lives of average Americans whether doomsday comes or not.
Note: The information provided by this publication or any related communications is for informational purposes only and should not be considered as financial advice. We do not provide personalized investment, financial, or legal advice.
Secured Wealth
Whether in the bank or held in a retirement account, most Americans feel that their life’s savings is relatively secure. At least they did until the last couple of years when de-banking, geopolitical turmoil, and the threat of Central Bank Digital Currencies reared their ugly heads.
It behooves Americans to diversify their holdings. If there’s a triggering event or series of events that cripple the financial systems or devalue the U.S. Dollar, wealth can evaporate quickly. To hedge against potential turmoil, many Americans are looking in two directions: Crypto and physical precious metals.
There are huge advantages to cryptocurrencies, but there are also inherent risks because “virtual” money can become challenging to spend. Add in the push by central banks and governments to regulate or even replace cryptocurrencies with their own versions they control and the risks amplify. There’s nothing wrong with cryptocurrencies today but things can change rapidly.
As for physical precious metals, many Americans pay cash to keep plenty on hand in their safe. Rolling over or transferring retirement accounts into self-directed IRAs is also a popular option, but there are caveats. It can often take weeks or even months to get the gold and silver shipped if the owner chooses to close their account. This is why Genesis Gold Group stands out. Their relationship with the depositories allows for rapid closure and shipping, often in less than 10 days from the time the account holder makes their move. This can come in handy if things appear to be heading south.
Lots of Potable Water
One of the biggest shocks that hit new preppers is understanding how much potable water they need in order to survive. Experts claim one gallon of water per person per day is necessary. Even the most conservative estimates put it at over half-a-gallon. That means that for a family of four, they’ll need around 120 gallons of water to survive for a month if the taps turn off and the stores empty out.
Being near a fresh water source, whether it’s a river, lake, or well, is a best practice among experienced preppers. It’s necessary to have a water filter as well, even if the taps are still working. Many refuse to drink tap water even when there is no emergency. Berkey was our previous favorite but they’re under attack from regulators so the Alexapure systems are solid replacements.
For those in the city or away from fresh water sources, storage is the best option. This can be challenging because proper water storage containers take up a lot of room and are difficult to move if the need arises. For “bug in” situations, having a larger container that stores hundreds or even thousands of gallons is better than stacking 1-5 gallon containers. Unfortunately, they won’t be easily transportable and they can cost a lot to install.
Water is critical. If chaos erupts and water infrastructure is compromised, having a large backup supply can be lifesaving.
Pharmaceuticals and Medical Supplies
There are multiple threats specific to the medical supply chain. With Chinese and Indian imports accounting for over 90% of pharmaceutical ingredients in the United States, deteriorating relations could make it impossible to get the medicines and antibiotics many of us need.
Stocking up many prescription medications can be hard. Doctors generally do not like to prescribe large batches of drugs even if they are shelf-stable for extended periods of time. It is a best practice to ask your doctor if they can prescribe a larger amount. Today, some are sympathetic to concerns about pharmacies running out or becoming inaccessible. Tell them your concerns. It’s worth a shot. The worst they can do is say no.
If your doctor is unwilling to help you stock up on medicines, then Jase Medical is a good alternative. Through telehealth, they can prescribe daily meds or antibiotics that are shipped to your door. As proponents of medical freedom, they empathize with those who want to have enough medical supplies on hand in case things go wrong.
Energy Sources
The vast majority of Americans are locked into the grid. This has proven to be a massive liability when the grid goes down. Unfortunately, there are no inexpensive remedies.
Those living off-grid had to either spend a lot of money or effort (or both) to get their alternative energy sources like solar set up. For those who do not want to go so far, it’s still a best practice to have backup power sources. Diesel generators and portable solar panels are the two most popular, and while they’re not inexpensive they are not out of reach of most Americans who are concerned about being without power for extended periods of time.
Natural gas is another necessity for many, but that’s far more challenging to replace. Having alternatives for heating and cooking that can be powered if gas and electric grids go down is important. Have a backup for items that require power such as manual can openers. If you’re stuck eating canned foods for a while and all you have is an electric opener, you’ll have problems.
Don’t Forget the Protein
When most think about “prepping,” they think about their food supply. More Americans are turning to gardening and homesteading as ways to produce their own food. Others are working with local farmers and ranchers to purchase directly from the sources. This is a good idea whether doomsday comes or not, but it’s particularly important if the food supply chain is broken.
Most grocery stores have about one to two weeks worth of food, as do most American households. Grocers rely heavily on truckers to receive their ongoing shipments. In a crisis, the current process can fail. It behooves Americans for multiple reasons to localize their food purchases as much as possible.
Long-term storage is another popular option. Canned foods, MREs, and freeze dried meals are selling out quickly even as prices rise. But one component that is conspicuously absent in shelf-stable food is high-quality protein. Most survival food companies offer low quality “protein buckets” or cans of meat, but they are often barely edible.
Prepper All-Naturals offers premium cuts of steak that have been cooked sous vide and freeze dried to give them a 25-year shelf life. They offer Ribeye, NY Strip, and Tenderloin among others.
Having buckets of beans and rice is a good start, but keeping a solid supply of high-quality protein isn’t just healthier. It can help a family maintain normalcy through crises.
Prepare Without Fear
With all the challenges we face as Americans today, it can be emotionally draining. Citizens are scared and there’s nothing irrational about their concerns. Being prepared and making lifestyle changes to secure necessities can go a long way toward overcoming the fears that plague us. We should hope and pray for the best but prepare for the worst. And if the worst does come, then knowing we did what we could to be ready for it will help us face those challenges with confidence.
