Michael Burry – “The market is dancing on a knife’s edge”

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“Speculative stock #bubbles ultimately see the gamblers take on too much debt. #MarginDebt popularity accelerates at peaks. At this point the market is dancing on a knife’s edge. Passive investing’s IQ drain, and #stonksgoup hype, add to the danger.”

There’s been a lot of talks about the current market being a bubble, that could be caused by the low interest rates and QE. Michael Burry’s latest tweet had a very interesting graph showing margin debt increasing to new highs.

Top Stock MarkEts Spark More “Bubble” Chatter, with BofA Calling It the “Mother-of-All Asset Bubbles

The torrent of cash sloshing around world markets due to the unprecedented stimulus measures in place to fuel economies coming out of the pandemic-led recession has fed into the euphoric rush to equities, particularly Big Tech.

Fed Sees ‘Considerable’ Risk of Ongoing U.S. Business Failures

The risks of ongoing business failures in the United States “remain considerable” even as the economy emerges from the coronavirus pandemic, the Federal Reserve said on Friday in its semi-annual monetary policy report to Congress.

 

h/t  Sponge75

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