Trader who predicted 2008 financial crisis bets $1.6bn on stock market crash by end of 2023

Michael Burry, played by Christian Bale in the movie ‘The Big Short’, is putting his money on another financial disaster

William Mata
Saturday 19 August 2023 14:20 BST
Michael Burry Is Banking On the Stock Market Crashing

An investor who was featured in the film The Big Short after he correctly bet on the housing market collapse in 2008 has now predicted that a Wall Street crash will take place by the end of this year.

Michael Burry, played by Christian Bale in the 2015 film directed by Adam McKay, is reported to have bet more than $1.6bn (£1.25bn) on the event happening in 2023.

Security Exchange Commission filings released on Monday show that he has taken out negative options on the S&P 500 and the Nasdaq 100 – both of which are representative of the US economy at large.

Mr Burry is reported by CNN to be using more than 90 per cent of his portfolio to bet on the market downturn.

His fund, Scion Asset Management, was shown to have bought large stakes in put options against both stock-market indexes. Put options give the right to sell an asset at a particular price.

Mr Burry bought $866m (£679m) in put options against a fund that tracks the S&P 500, and $739m (£580m) in put options against a fund that tracks the Nasdaq 100.

His bet comes as the S&P 500 has risen 16 per cent and the Nasdaq 100 38 per cent already this year.

Mr Burry became famous for his market movements in the mid-2000s, when he bet against the housing market during events that led to the worldwide recession.

It seems that he does not always get it right, however. In January, he tweeted the word “Sell” to his 1.4 million followers, but then in March he wrote “I was wrong to say sell”.

Christian Bale, pictured with his Best Supporting Actor Oscar, played Michael Burry in ‘The Big Short’

As of 17 August, his account appears to be inactive without any tweets whatsoever, after he deleted his activity in a stand against Elon Musk.

‘The Big Short’ was initially a bestselling book by Michael Lewis before it was adapted into the film, which also starred Steve Carell, Ryan Gosling and Brad Pitt.

Bale said in 2015, of meeting and playing Mr Burry: “He’s a man who knows himself incredibly well, and has a brain unlike any brain I’ve ever come across in my life, and who has not only this great understanding and love of numbers and feeling for numbers, but incredible emotion for the consequences.

“He completely understood what was happening here. Viewed himself not as a hero in the slightest.”

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