"The Big Short" fame investor Michael Burry has voiced his concerns over a potential recession asking what strategies will pull people out of a recession. The legendary investor, in his cryptic tweet, also hinted at the possibility of a “multi-year recession,” a possibility not considered by many in the current times.
“What strategy will pull us out of this real recession? What forces would pull us so? There are none. So we are really looking at an extended multi-year recession. Who is predicting this? There are none,” he tweeted.
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Burry’s tweet comes ahead of Federal Reserve Chair Jerome Powell's speech on Wednesday at an event hosted by the Brookings Institution in Washington. Market participants are also eyeing the personal consumption expenditures and payroll data scheduled to be released later this week.
The SPDR S&P 500 ETF Trust SPY closed 0.17% lower on Tuesday while the Vanguard Total Bond Market Index Fund ETF BND closed 0.37% lower.
Recession: The investor’s tweet comes at a time when talks about any potential recession being short and shallow have gained momentum. This idea, however, has been questioned by the likes of prominent economists like Mohamed El-Erian who believe it is important to keep an open mind on the probability of a recession in the U.S. as well as its characteristics if it materializes.
El-Erian pointed out in his opinion piece in Financial Times that consensus forecasters are still predicting a “short and shallow” recession despite the chastening received after they projected that the inflation will be transitory. Companies, governments, households and equity investors should plan with a range of possible outcomes, he had said.
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