Global financial crash: Man who predicted 2008 bets it’ll happen again

Michael Burry at the The Big Short premiere in New York A trader who predicted the 2008 global financial crash has bet $1.6billion (£1.2billion) on another hitting Wall Street by the end of the year. Michael Burry’s firm has bought large positions which will reap rewards if the Nasdaq and S&P 500 stock indices go down. The bet has been revealed in new documents filed with US financial regulator, the Securities and Exchange Commission. They showed Scion Asset Management bought $866million (£679million) in put options against a fund tracking the S&P 500. Put options give an investor the right, but not the obligation, to buy or sell an asset at an agreed price in the future. READ MORE… A shocking 756 homes are burgled every day yet only 4pc of cases end in charges The Times reports that Burry’s fund also bought $739million (£580million) in put options against a fund which tracks the Nasdaq 100, according to the filings that show the company is using more than 90 percent of the fund’s portfolio to bet on a downturn. Burry, who is played by Christian Bale in the movie The Big Short, dropped out of Stanford Medical School in 2000 and set up the investment firm Scion Capital. It drew investments from a Wall Street fund and an insurance company run by an associate of legendary billionaire investor Warren Buffett. After years of his fund outperforming the market, Burry in 2005 turned to subprime mortgage bonds and began buying up financial instruments which allowed him to bet against them. A view of Wall Street in New York News of Burry’s latest move comes at a perilous time for the global economy as high inflation, high interest rates and low growth in the West threaten recession, which would be made worse by darkening clouds hanging over China’s economy. Global stocks followed Wall Street lower on Thursday after notes from a US Federal Reserve meeting dented hopes of an end to interest rate hikes. London, Hong Kong, Paris and Seoul also declined while Shanghai and Wall Street futures advanced and oil prices rose. Wall Street’s benchmark S&P 500 lost 0.8 percent on Wednesday after minutes from the Fed’s latest meeting suggested board members are unsure what to do after raising their key lending rate to a two-decade high. SUBSCRIBE Invalid email We use your sign-up to provide content in ways you’ve consented to and to improve our understanding of you. This may include adverts from us and 3rd parties based on our understanding. You can unsubscribe at any time. More info Trending Traders at the New York Stock Exchange