Submitted by SlideMcCockiner t3_ysji3z in wallstreetbets
Intro:
I don’t know about you guys but I have a lot of respect for Michael Burry and his recession predictions. He has nailed them time and time again. He might be the smartest regarded investor known to man. He has been sounding the alarm about an inflationary crisis since as early as February 2021, and I believe that after the run up we had yesterday that it’s only a matter of time before we see a bunch of giant devil dicks all over our investing apps. I will detail some of his DD for his predictions.
- 2022 Q3 Earnings
Earnings reports for big tech companies were shite in Q3. Microsoft’s growth slowed substantially, Amazon’s operating income got cut by almost half and reported their slowest revenue growth for AWS since they began reporting it in 2014, Meta Platforms revenues are down 4% and costs up 19%, Google’s revenue growth came in at just 6% compared to 41% 1 year earlier. Burry called this.
- Disinflation is just temporary
Inflation appears in spikes. It resolves, fools people, and then comes back. After the first inflation spike, there tends to be a second larger one. An inflationary cycle generally spans years, and sometimes decades. It always comes back, just like us degenerates come back to YOLOing on FDs.
- White collar employment bubble
When white collar employees are working remotely, they are unproductive. I work from home and can confirm I am a worthless sack of shit when working from home. I’m sure some of you can relate. This forces multiple employees to work a 1-man job. Burry thinks the white collar employment bubble is bursting right before our eyes and will lead to a huge increase in unemployment. We have already seen this taking effect with META, Amazon, Twitter (LOL) and other large companies having mass layoffs in the past month or two.
- Margin bubble
Just like some of you dumb fucks who were inspired by the highly regarded legend of GUH, more investors are using margin now than ever. We are currently in the largest margin bubble in history. Also, plays are more risky. Single stock options volumes are now larger than the volumes for normal shares. Due to increased volatility from alternative investments, margin calls will occur easily. This dropped the asset prices, causing a chain reaction of margin calls. To make matters worse, credit card debt has exploded over the past 5 years to $4.6 billion. Goldman’s Apple Card lends more than a quarter of their credit loans to subprime borrowers. They will default soon once the bad credit regards fall to the rising inflation.
TLDR:
Burry believes the coming recession could be worse than 2008 and has been warning us since February 2021.
• Earnings for big tech were ass in 2022 Q3, worst is yet to come. • We haven’t seen the peak of inflation just yet. • White collar employment bubble from regarded unproductive employees, leading to more/continued layoffs • Largest Margin bubble in history, produced by regards who can’t pay their credit cards and autists that use margin to YOLO on FDs.
Burry predicted the cryptocurrency crash, meme crash, SPAQ crash, 2000 crash, 2008 crash, and now the 2022 crash which is just getting started.
That being said, I will be buying $QQQ and $SPY puts next week.