Michael Burry tweeted today that “This crisis could resolve very quickly. I am not seeing true danger here.”
Burry famously got the 2008 housing bust right by shorting mortgage bonds backed by loans approved with little to no documentation, and was played by Christian Bale in The Big Short after being featured in Michael Lewis’ book.
This crisis was triggered by Silicon Valley bank’s run and failure after they lost money from investing deposits in long-dated bonds that started yielding less than the interest that needs to be paid to depositors in the short term.
This dynamic is a function of the Fed hiking rates so fast on short term rates to fight inflation.
Let’s hope he’s right.