Michael berry, the prototype character of the movie "big short", who accurately predicted the subprime mortgage crisis in the mid-2000s, sent a terrible warning to his fans on twitter on Tuesday: a crisis like 2008 may repeat itself. "As I said in 2008, it was like watching a plane crash. It hurt, it wasn't fun, and I didn't laugh," bury wrote
As we all know, Berry was the first person to short subprime mortgages in the mid-2000s. He accurately predicted the bursting of the US real estate foam. In the popular film big short, his role was played by the actor Christian Bale, telling the incredible bet he made in the frenzied market atmosphere at that time.
The current market sentiment certainly supports bury's bold link between the current market and the market crash in 2008. Investors are worried that the economy is overheating and that a recession is coming. They panicked at every sign of a slowdown. On Tuesday, the social network snap issued a profit warning, pointing out that the impact of supply chain disruption, soaring prices and the conflict between Russia and Ukraine made enterprises cautious about digital advertising spending. The company's share price plunged 43% on Tuesday.
A twitter user asked berry, "2008 is the responsibility of the real estate market, but what is the reason for 2022?"
Another user responded: "a lot of Monroe printing has created a foam in every asset. Compared with the upcoming situation, 2008 is nothing at all. A house that should be worth $500000 is now worth $2.2 million, which is crazy. The dollar has been destroyed as a currency."
Another user asked, "is everything a foam or is Western currencies overvalued?"
Another user tried to reassure people: "don't compare this year with 2008. It's completely different from 2008. I dare say we're better than 2008. Better connections and better preparation. Technology is also on our side, and news spreads faster. In today's world, emotions change rapidly. (no pun)."
All this information shows the panic and tension that currently affect investors. They searched desperately for a glimmer of hope where they were overwhelmed by the bad news. Almost all asset classes were affected.
As early as last summer, bury sounded the alarm of "the largest speculative foam in history". He warned retail investors pouring into MIM shares and cryptocurrencies that they were facing a crash on the scale of "the mother of all crashes".