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Michael Burry Just EXPOSED The Government For FRAUD - YouTube
Channel: Casgains Academy
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- We will not allow
China to isolate Taiwan.
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Pelosi, get out!
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None of us in Taiwan has
agreed to Pelosi's visit.
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(protesters yelling in foreign language)
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Michael Burry just
exposed the US government
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for the worst scandal of all time.
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We're talking about World War III,
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insider trading, government manipulation,
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and a multi-year inflationary crisis.
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People thought Burry went insane
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when he predicted the 2008 housing bubble.
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But the housing recession is like a baby
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compared to the monster
that Burry sees right now.
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He's either the smartest man in the room,
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or the most delusional fund manager.
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The Federal Reserve is lying.
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They were supposed to pull back
tens of billions of dollars
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out of the economy
starting on June 1st, 2022,
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but they didn't do so.
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That might sound like
a bold claim to make,
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but it's backed by unrefutable evidence.
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The Federal Reserve has to disclose
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all of its assets by law,
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which can be found on
the New York Fed website.
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Starting on June 1st, the Fed claimed
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that they were going to sell
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$47.5 billion worth of
securities per month.
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This selling includes $30
billion worth of treasury bonds,
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and $17.5 billion of
mortgage-backed securities.
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Michael Burry looked
through the Fed's website
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and noticed that they were
not selling the amounts
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that they claimed to be doing.
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Burry tweeted, "Drugs are hard to kick.
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Fed was supposed to sell
$30 billion of Treasuries,
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and $17.5 billion of
Mortgage-Backed Securities per month
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starting June 1st.
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Quantitative Tightening.
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During June mortgage-backed
securities holdings
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rose almost $3 billion.
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Treasury holdings fell
less than $10 billion.
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So instead of selling $30
billion of Treasury Bonds
[105]
or Treasuries in June,
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the Fed only sold less than
$10 billion of Treasuries.
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And instead of selling $17.5 billion
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of mortgage-backed securities
or MBS in short form,
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the Fed actually bought
3 billion worth of MBS.
[119]
The Fed is deceiving everyone
right in front of their faces.
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I'm currently recording
this video in August.
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So let's see if the Fed followed
their plan in July, 2022.
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On July 6th, the Fed's holdings
totaled at $8.364 trillion.
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On August 3rd, the Fed's holdings
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were worth $8.344 trillion.
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That's a $20 billion decrease,
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which is not the $47.5 billion decrease
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that the Fed was promising.
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I subtracted the two charts
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to find exactly which securities
changed month over month.
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Treasuries fell by a total of $27 billion
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instead of the promised
decrease of $30 billion.
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MBS holdings actually
increased by over $8 billion
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instead of the promised
decrease of $17.5 billion.
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This is outright fraud
by the Federal Reserve.
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They're not cutting back at
the rate that they promised.
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In addition to this,
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the US government is
also concealing the fact
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that the economy is crashing.
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After the US economy appeared
to be entering a recession,
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The White House changed the
definition of a recession.
[182]
A recession is generally defined
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as two consecutive quarters
of negative GDP growth.
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The US GDP has declined
for two quarters in a row,
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so we are currently in a recession.
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The White House does not
want you to think that.
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The White House released
a blog on July 21st
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describing a recession as a
decline in the labor market,
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consumer and business spending,
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industrial production, and incomes.
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Burry knows this is ridiculous
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because the economy,
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which is tracked by the
gross domestic product,
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is clearly declining.
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He tweeted that, "The
White House would like you
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to redefine a recession
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as one in which consumers are
not borrowing on credit cards
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to pay for inflation,
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and neither is labor force inadequate
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for the size of the economy.
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GDP out Thursday,
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not that there's anything
wrong with that."
[224]
Burry is essentially saying
[225]
that The White House is
purposely deceiving you
[227]
with the wrong statistics.
[229]
The White House is claiming
that inflation adjusted income
[231]
or real personal income is an indicator
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of economic stability.
[235]
Burry knows this is inaccurate
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because credit card debt is skyrocketing
[239]
to pay for increasing prices.
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The other statistic that
The White House pointed to
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was the unemployment rate,
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which is still quite low as of now.
[246]
Michael Burry believes this
is, once again, deceiving
[249]
because less people are
participating in the labor force.
[252]
People have been leaving the labor force
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by retiring or simply
not looking for jobs.
[256]
The unemployment rate only counts those
[258]
who are actively looking for jobs.
[260]
This is seen in the Labor
Force Participation Rate,
[262]
which is significantly lower
than pre-pandemic levels.
[266]
The unemployment rate is calculated
[267]
by taking the number of unemployed people
[269]
and dividing it by the labor force.
[271]
Because previously unemployed people
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are leaving the labor force,
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the unemployment rate is
being artificially lowered.
[277]
This is because subtracting
a constant number
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on the numerator and denominator
leads to a lower outcome.
[282]
If we take the fraction 3/5,
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and subtract two in
numerator and denominator,
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the percentage goes from 60% to 33%.
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This phenomenon is artificially lowering
[292]
the unemployment rate,
[293]
thus causing the economy
to appear to be strong
[295]
when it actually isn't.
[297]
The White House is either
too stupid to know this,
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or is purposely issuing propaganda.
[301]
The government's actions
that propped up the sentiment
[303]
in the short-term.
[304]
Ever since the Fed announced
[306]
that they would be raising interest rates
[307]
and starting quantitative tightening,
[309]
the market sentiment tanked.
[310]
But recently, people have started
[312]
to become bullish once again.
[314]
Burry believes that such silly behavior
[316]
indicates that the
crisis is far from over.
[318]
The fact that people have become bullish
[320]
indicates we're simply
in a dead-cat bounce.
[323]
Burry tweeted that,
"The silliness is back.
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After 1929, after 1968,
after 2000, after 2008,
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the strain of silliness
[332]
that transformed the bulls into bubbles
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completely and utterly disappeared.
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But that familiar COVID-era
silliness is not dead yet.
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Like 2001 before Enron,
before 9--, before WorldCom."
[344]
While the economy is still on the decline,
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speculative investors are engaging
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in what Burry calls silliness.
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Magic Empire Global, a Hong
Kong financial service company,
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recently went public on the stock exchange
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and soared by over 24 times in value.
[358]
This is representative of
the same speculative behavior
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that occurred in 1999, as well as 2021.
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Burry tweeted that, "Gamblers gamble more
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the more they lose. #Silliness".
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Burry is referring to
the Monte Carlo fallacy,
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which is also known as
the Gambler's fallacy.
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The Monte Carlo fallacy is the belief
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that previous losses
indicate a higher chance
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for future gains.
[383]
For instance, let's say someone bet
[385]
on a coin toss being tails.
[387]
In this example,
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the first three coin
tosses came out as heads.
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This situation would
typically cause the gambler
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to think that there's a higher chance
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of the next coin toss being tails.
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Unbeknownst to the gambler,
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past events are
independent of future ones.
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And the coin toss still has
a 50% chance of being heads.
[404]
The Monte Carlo fallacy is an
incorrect, but common belief
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that past failures will
indicate a higher chance
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of future success.
[410]
Because gamblers lost huge
sums of money in 2021,
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many are likely to fall for
the Monte Carlo fallacy.
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We're seeing this come
into play with stocks
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like Magic Empire Global.
[420]
Recent data backs this up as well.
[422]
I searched up short
squeeze on Google trends,
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and found a slow but steady
increase in search volume
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over the last 90 days.
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This type of behavior is similar
[430]
to the dot com bubble's dead-cat
bounce in the early 2000s.
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Burry questioned, "NASDAQ a bull market
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because it is up 20% off its low?
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Who makes this stuff up?
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After 2000, the NASDAQ
did that seven times
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as it fell 78% to its 2002 low."
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Burry also mapped out
[447]
the S&P's performance in 2001 and 2022,
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and found a similar rebound in price.
[452]
The S&P fell by 12% in 2001
before rebounding by 9%.
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Similar to 2001,
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the S&P is following a
similar price pattern in 2022.
[462]
Such a rebound is unreasonable
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because the underlying
economy is shrinking
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and will continue to do so.
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If you watched my previous videos,
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you would know that
inventories are building up
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because of the Bullwhip Effect.
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The Bullwhip Effect is a phenomenon
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where every step of the supply
chain orders extra supply
[478]
causing the total supply to
be much more than anticipated.
[481]
Because companies will
have to lower prices
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from the Bullwhip Effect,
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they will soon experience
significantly lower earnings.
[487]
And this is going to be part two
[488]
of the 2022 market crash,
earnings compression.
[492]
Part one was when valuations
came back down to reality
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through multiple compression.
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This includes multiples
[497]
like the price to earnings
ratio, the price to sales ratio,
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and the EV to EBITDA ratio.
[502]
Burry explained how,
"Adjusted for inflation,
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2022 first half S&P 500 down 25 to 26%,
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and NASDAQ down 34 to 35%,
Bitcoin down 64 to 65%.
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That was multiple compression.
Next up earnings compression.
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So, maybe halfway there."
[520]
Burry's tweets can be confusing at times,
[522]
and it's not a surprise
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that this can be used to deceive others.
[525]
- [CNBC] Everyone's worked
up about Michael Burry.
[528]
Yeah, Michael Burry of
"The Big Short" fame.
[530]
The mainstream media
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frequently tries to
complicate Burry's thesis
[533]
to fit their narrative.
[534]
Michael Burry called out Business Insider
[536]
for misinterpreting his
thesis into three parts.
[538]
One paragraph in the article made it seem
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like Burry was bullish
when he actually wasn't.
[543]
The paragraph stated that,
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"Many investors have been
dumping stocks, cryptocurrencies,
[547]
and other assets in anticipation
[549]
of further rate hikes and
a tighter money supply.
[552]
However, Burry seems to expect
[553]
the inflation threat to recede,
[555]
and the Fed to loosen it's
stance, and begin cutting rates,
[557]
and ramping up bond purchases again."
[560]
This paragraph implied
that Burry was bullish
[562]
because he expects inflation to cool down.
[564]
This completely missed the mark.
[566]
Burry's deflationary
thesis is actually bearish.
[569]
Not only does the Fed cutting rates
[571]
create long-term inflation,
[572]
but prices dropping also means
[574]
that corporate profits will suffer.
[576]
Business Insider then
completely reversed their stance
[578]
two paragraphs later,
[580]
by talking about how
Burry's thesis is bearish.
[582]
This is a complete disaster of an article,
[585]
and totally misinterprets
Burry's prediction.
[587]
Burry reacted to the article by saying,
[589]
"You heard it here first,
or second, or third."
[592]
The financial mainstream media is awful.
[594]
They frequently confuse readers,
[596]
and never expose any blatant manipulation.
[599]
I'm currently on a mission
to create videos like this
[601]
to clarify what's actually going on.
[603]
At 1 million subscribers,
[605]
I'm going to release a video so SHOCKING
[607]
that people might get arrested.
[609]
93% of you aren't subscribed,
so what are you waiting for?
[613]
Thank you for subscribing.
[614]
And let's get back into the video.
[616]
In order to refute the mainstream media,
[618]
Michael Burry simplified his
thesis into two simple parts.
[621]
He explained how when
you see inventory builds,
[624]
think two things.
[625]
Just-in-case supply chain
management, and inflation.
[628]
There is nuance in everything,
[630]
and please don't think anything,
[632]
including stories on my meaning,
[634]
is as simple as you want it to be."
[636]
Burry is saying that when you
see increases in inventories,
[639]
this means that prices are going to drop.
[641]
The mainstream media
[642]
will try to over complicate the short-term
[644]
while simplifying the long-term.
[646]
Inflation won't just go
straight up or straight down.
[649]
It's going to go up and
down in a cyclical fashion
[652]
with the long-term trend being upwards.
[654]
One short-term indicator
[655]
that the mainstream media
focuses on is earnings reports.
[658]
Earnings reports reflect
a company's performance
[661]
over the past quarter.
[662]
Recent earnings reports have shown
[664]
that companies have
been doing well so far.
[666]
However, most companies
have been predicting
[668]
that their future quarters
will be a total disaster.
[671]
Burry explained, "These earnings reports
[673]
and by Jove the whole season
have a "Last Hurrah" feel."
[676]
By Jove is referring to
the Roman deity, Jupiter,
[679]
which essentially means "Oh my God".
[681]
This basically means
[682]
that the companies have been
shocked by what's coming.
[685]
The Last Hurrah is the final victory
[687]
before complete failure.
[689]
Burry is saying that the
recent earnings reports
[691]
might seem great,
[692]
but the next ones are going to be awful.
[694]
The epitome of this is Walmart.
[699]
Walmart recently lowered
their profit outlook
[701]
for the next quarter and the
entire fiscal year of 2023.
[705]
In response to Walmart's
earnings, Burry laughed.
[708]
He later explained how,
"Someone was going on
[709]
about Christmas in July.
[711]
Hope you enjoyed it."
[712]
One of my previous videos
[714]
covered Burry's Christmas
in July prediction,
[716]
where he was predicting that
Walmart and other retail stores
[718]
would experience
substantially lower profits
[720]
in July and onwards.
[722]
Lower prices in the short-term
[723]
might sound great for inflation,
[725]
but there's one variable that's missing,
[727]
which is the Federal Reserve.
[729]
Because prices are beginning to drop,
[730]
the Fed will likely revert
back to printing money.
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The reason why I say this
[734]
is because human behavior is predictable.
[737]
And a similar situation
happened in the 1970s as well.
[740]
Because of the Bullwhip Effect,
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the stock market crashed
in the early 1970s,
[744]
and prices dropped as well.
[746]
As a result of this,
[747]
the Fed ended up cutting interest
rates to boost the market.
[750]
This helped stocks
rally in the short-term,
[753]
but also led to long-term inflation.
[755]
Burry tweeted, "The New
York Times front page
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the day after the Dow
bottom on December 6th, 1974
[760]
doesn't mention stocks,
[762]
which were down 45% since
the January, 1973 peak.
[766]
Mentioned was the Fed
cutting rates to 7.75%,
[770]
signaling a credit ease.
[771]
Stocks rallied 53% in six months,
[774]
making a lasting top on
that killer mistake."
[777]
So in reaction to prices dropping,
[779]
the Federal Reserve will
start printing money again,
[782]
also known as quantitative easing.
[784]
Unbeknownst to the Fed,
[785]
their quantitative
easing will be too early,
[788]
and cause long-term
inflation to settle in.
[790]
Burry believes that the
upcoming inflationary disaster
[793]
will be worse than any
other inflationary period
[795]
in US history.
[796]
2020 is the mother of all bubbles.
[799]
Burry warned how, "The last
two inflationary periods
[801]
in the United States, the
1940s/'50s, and the 1970s,
[805]
each had three distinct
inflationary peaks.
[808]
20s, post-Flu, World War I nihilism.
[811]
40s, post-War spend, baby boom.
[814]
70s, bad energy and Fed policy.
[817]
2020s, all of the above."
[819]
The 2020s has almost every
inflationary characteristic
[822]
that our previous crises had
[824]
We are currently in a
post-COVID environment.
[827]
The Fed printed trillions of dollars,
[828]
and will likely continue to do so.
[830]
Energy prices are continuing to skyrocket.
[833]
The US government is clearly
setting up the economy
[835]
for a terrifying situation,
[837]
but that's just scratching the surface.
[839]
Government leaders have been
actively insider trading
[842]
behind the scenes.
[843]
Politicians have been
using government resources
[845]
to support companies
that they own shares of.
[847]
The epitome of this is Nancy Pelosi,
[850]
the Speaker of the House.
[852]
Pelosi has a track record
of purchasing stocks
[854]
before the government boosts
them in some shape or form.
[856]
A recent example of this
[858]
is Pelosi purchasing semiconductor stocks
[860]
before the Chips bill was passed.
[862]
Burry tweeted, "So Speaker
Pelosi made a bundle
[864]
on semiconductor stocks bought recently
[867]
because she knew this was coming.
[869]
Should be illegal."
[870]
Another prime example of this
[872]
is Joe Biden selling oil to a firm
[873]
that Hunter Biden was invested in.
[875]
Burry tweeted, "So Biden sold
[877]
950,000 Strategic Petroleum
Reserve oil barrels
[880]
to Sinopec, a Chinese oil firm.
[883]
His son Hunter's private equity firm
[885]
has a $1.7 billion investment
in Sinopec marketing,
[888]
a wholly owned subsidiary of Sinopec.
[891]
And I have to read the
Washington Free Beacon
[893]
to get the story?"
[895]
Burry believes that
there should be more eyes
[896]
on the government's insider
trading, and rightfully so.
[900]
The White House and the
Fed's actions are not aligned
[902]
with the long-term success
of the United States.
[904]
But this is nothing compared
[905]
to the final nail in
the coffin, a world war.
[911]
- [Reporter] It was unprovoked,
[912]
but this is what Russian
President Vladimir Putin
[915]
unleashed on Ukraine.
[917]
Tensions between the west and the east
[919]
are rising as the Ukraine war continues,
[921]
and China threatens control over Taiwan.
[923]
In preparation for a world war,
[925]
CEOs in the US are moving
manufacturing to the US.
[929]
This activity is being hidden
by all sorts of buzzwords
[932]
including onshoring,
reshoring, and nearshoring.
[935]
According to a review
[936]
of earnings call and conference
presentations by Bloomberg,
[939]
references to these buzzwords
are up by over 1000%
[942]
compared to pre-pandemic periods.
[944]
Not only that, but
manufacturing construction
[947]
is at an all-time high right now
[949]
with $94 billion being spent annually
[951]
on manufacturing construction.
[953]
A UBS survey of C-Suite Executives
[955]
showed that over 90% of
executives either had plans,
[958]
or were the process of moving
production out of China.
[961]
80% of these executives cited
the US as the main location,
[965]
with Mexico being the
second most popular choice.
[968]
Burry believes that the
underlying reason for this
[970]
is an incoming world war.
[972]
The implications of
onshoring will be serious.
[974]
Because moving production
back to the US takes time,
[977]
a world war would exacerbate
[979]
the current supply chain shortage.
[981]
Burry tweeted, "Seems China
moves on Taiwan in 2023,
[984]
as the war Ukraine spreads into
the EU, maybe via Lithuania.
[989]
Onshoring/blue-collar shortages
[991]
plus global supply chain restructuring
[993]
raise long-term inflation's floor,
[995]
even as the bullwhip
cycles lower to that end."
[997]
Tensions between the US and
China are increasing so much
[1000]
that a world war is
likely going to happen.
[1003]
China recently withdrew its promise
[1004]
to not send troops to Taiwan.
[1006]
This essentially threatens a
Chinese invasion into Taiwan.
[1010]
The US continues to maintain
[1011]
that it will keep its
operations in Taiwan,
[1014]
and this will inevitably
lead to an invasion.
[1017]
China recently revealed a white
paper that shockingly states
[1019]
that the country will
reunify Taiwan with China.
[1022]
The first part of the white paper states
[1024]
that "Taiwan is part of China.
[1026]
This is an indisputable fact."
[1028]
The white paper then detailed
some history of Taiwan
[1031]
that was supposed back why
Taiwan is part of China.
[1034]
Perhaps the most frightening part
[1036]
of the white paper was section three.
[1038]
"China's complete
reunification is a process
[1040]
that cannot be halted."
[1042]
This is a clear sign
[1043]
that China will take control
over Taiwan at all costs,
[1046]
and inevitably cause World War III.
[1049]
So there you have it, Burry's
most shocking prediction ever.
[1052]
He believes that the Fed is lying.
[1054]
The White House is deceiving everyone.
[1056]
Politicians are openly insider trading.
[1059]
And most terrifying,
[1060]
World War III is on
the brink of occurring.
[1063]
This video is part of a series of videos
[1065]
covering everything
about Burry's prediction,
[1067]
and how he's betting big on it.
[1068]
So hit that subscribe
button to stay updated
[1071]
on how Burry's paving the
way for The Big Short II.
[1073]
The mainstream media will never tell you
[1075]
what I'm detailing in this series.
[1077]
If you enjoyed this video,
[1079]
please hit the like button as well.
[1081]
Thank you for all of your support,
[1082]
and I'll see you in the next one.
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