‘Big Short’ investor Michael Burry warns US doomed to ‘multi-year recession’

By: Thomas B.

Prominent hedge fund boss Michael Burry asserted the US economy will inevitably face a far more serious recession than most experts predict.

Burry, who rose to national prominence after his bet against the US housing market was chronicled in “The Big Short,” added that policymakers have no good options to avoid a looming economic downturn.

“What strategy will pull us out of this real recession? What forces would pull us so? There are none,” Burry wrote Tuesday night in a now-deleted tweet. “So we are really looking at an extended multi-year recession. Who is predicting this? There are none.”

Burry’s latest warning came as the Federal Reserve moves forward with its high-wire effort to cool inflation through interest rate hikes without triggering a recession or upending the labor market. Fed Chair Jerome Powell recently acknowledged the path to such a “soft landing” for the economy has narrowed.

Another notorious market pessimist, “Dr. Doom” economist Nouriel Roubini, tweeted at Burry that he has also predicted a painful recession.

“Some of us have been predicting a long and severe recession and made a detailed case for why we are headed towards a Great Stagflationary Debt Crisis,” Roubini said.

An outspoken economic doomsayer, Burry has cautioned on several occasions over the last year that the US stock market is in the midst of a major crash.

Earlier this month, Burry revealed that he was once again betting against portions of the US economy.

Burry did not reveal which assets he was shorting, though his post came during a period in which FTX’s sudden collapse into bankruptcy sparked mounting fears of a contagion that could hurt the entire cryptocurrency sector.

“You have no idea how short I am,” Burry cryptically said. In a separate tweet, Burry asserted that gold would re-assert itself as a preferred store of wealth as investors fled volatile digital currencies.

In September, Burry predicted that market conditions could end up being worse than the Great Recession due to ongoing central bank rate hikes.