Michael Burry Is Long Farmland and Gold, Says We're All To Blame For the Crisis
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The former head of Scion Capital LLC, Michael Burry garnered attention for predicting the housing market plunge and is now investing in farmland and gold, while looking for people to start taking blame for the financial crisis, according to an interview with Bloomberg Television.
Burry said that the blame for the financial crisis falls at the feet of everyone from the borrower to the lender, all the way up to Congress and the last several U.S. Presidents that have allowed credit standards to become too loose in recent years.
“My number one concern is that there has been a complete utter total abdication of personal responsibility though out our entire society. I don’t think anyone anywhere is taking blame themselves for what they did to contribute to the crisis. And again I think it gets back to that blame game. It is the most damaging thing we can do as a country is to blame a narrow set and not look within ourselves for what each of us did or didn’t do to the basic wrong that led to this mess."
Burry sees the current housing market as an "artificial market," as there are by his count between 2.5 million to 3 million homeowners that are more than 9 months past due on mortgage payments and are not receiving notices from lenders.
"I think that Fannie and Freddie are basically being used as special purpose vehicles by our government to support the housing market. The private mortgage market is practically nonexistent; 96-97 percent of mortgages are flowing through Fannie and Freddie now. I think Fannie and Freddie are exercising a tremendous amount of power over the market by withholding properties from sale and not forcing foreclosure."
Burry does see value in agricultural land and it now makes up a "significant" amount of his portfolio.
"I think there is some value in real estate. You have to buy it right. It’s not in general, that’s the problem. I think that there are an awful lot of people out there looking to buy these distressed properties out there and so you need to find special situations."
Burry also sees gold as an interesting investment, given how he sees the world playing out.
Related ETFs:
SPDR Gold Shares (NYSE: GLD), Market Vectors Gold Miners ETF (NYSE: GDX), Market Vectors Agribusiness ETF (NYSE: MOO).
Burry said that the blame for the financial crisis falls at the feet of everyone from the borrower to the lender, all the way up to Congress and the last several U.S. Presidents that have allowed credit standards to become too loose in recent years.
“My number one concern is that there has been a complete utter total abdication of personal responsibility though out our entire society. I don’t think anyone anywhere is taking blame themselves for what they did to contribute to the crisis. And again I think it gets back to that blame game. It is the most damaging thing we can do as a country is to blame a narrow set and not look within ourselves for what each of us did or didn’t do to the basic wrong that led to this mess."
Burry sees the current housing market as an "artificial market," as there are by his count between 2.5 million to 3 million homeowners that are more than 9 months past due on mortgage payments and are not receiving notices from lenders.
"I think that Fannie and Freddie are basically being used as special purpose vehicles by our government to support the housing market. The private mortgage market is practically nonexistent; 96-97 percent of mortgages are flowing through Fannie and Freddie now. I think Fannie and Freddie are exercising a tremendous amount of power over the market by withholding properties from sale and not forcing foreclosure."
Burry does see value in agricultural land and it now makes up a "significant" amount of his portfolio.
"I think there is some value in real estate. You have to buy it right. It’s not in general, that’s the problem. I think that there are an awful lot of people out there looking to buy these distressed properties out there and so you need to find special situations."
Burry also sees gold as an interesting investment, given how he sees the world playing out.
Related ETFs:
SPDR Gold Shares (NYSE: GLD), Market Vectors Gold Miners ETF (NYSE: GDX), Market Vectors Agribusiness ETF (NYSE: MOO).
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