"Like most balloons, the longer it goes on, the worse the catastrophe will become," Burry said. "This is very similar to the bubble in synthetic asset backed CDOs before the Great Financial Crisis, because pricing in this market was not done through a fundamental analysis of the security level, but through massive capital flows based on Nobel-approved models. at risk This proved to be incorrect. "
Passive low-priced cars have gained popularity on Main Street. Passive investments have already taken up almost half of the stock market as more investors shun shareholders and move into indexing funds, according to Bank of America Merrill Lynch. Passive equity funds alone have targeted the market at more than $ 3 trillion in less than 1
"Trillions of dollars of global assets are indexed to these stocks," Bury said. "The theater is still getting crowded, but the exit door is the same as always. All this is compounded when you enter even less liquid stocks and bond markets globally. "