Against the Rules: Michael Burry Speaks

Lydia Dean Cott

I’m Lydia Dean Cott.

Michael Lewis

I’m Michael Lewis.

Lydia Dean Cott

And surprise, we’re here for an extra episode of the Big Short Companion series.

Michael Lewis

One we weren’t expecting, that’s right.

Lydia Dean Cott

Yeah, because we got the hedge fund manager, Michael Burry, to be on the podcast.

Michael Lewis

We didn’t really get him to be on the podcast. It’s funny what happened.

Lydia Dean Cott

Well, first we should say who Michael Burry is.

Michael Lewis

Michael Burry is one of the three main characters in both the book and the movie The Big Short. And he was a really important character to me.

Lydia Dean Cott

And in the movie, he’s played by Christian Bale.

Michael Lewis

And in the movie, he’s played by Christian Bale.

Lydia Dean Cott

He doesn’t do interviews. And we’ve asked him to be on the podcast earlier. And he said no. So yeah, so what happened?

Michael Lewis

First, he said, you know, I’d like to help. And then he said, I wouldn’t like to help. And then what happened was his trading activity got released to the public, which it does.

He has to file a 13F form with the SEC saying what his positions are. and as though it’s not a perfect picture of what he’s doing, it did say that he had put on big, short positions against Palantir and NVIDIA. So he was betting against the AI bubble.

All he did was file what his positions were. He didn’t go on, he doesn’t do media, he doesn’t do interviews. And it exploded.

Like it was on Twitter, on CNBC, people were both attacking him and praising him. And his reasoning for not coming on the podcast was he wanted to lay low. And he was trending on Twitter for 48 hours.

So it was like, what’s the point? He can’t lay low. And as he tells us, he says like, this only happens to me.

But I was really glad to have him on because I felt like we were missing somebody.

Lydia Dean Cott

Yeah. No, same. And also because people were asking, I was getting messages being like, are you guys going to have Michael Burry?

Michael Lewis

There’s something also nice about subjects who aren’t promiscuous, who don’t just talk to everybody.

Lydia Dean Cott

Because it makes you feel special?

Michael Lewis

It makes you feel special. It makes the audience feel special. And the reader feels special. It’s like nobody else has this story.

Lydia Dean Cott

And one thing I wanted you to explain is he was one of the first people, one of the early people, to bet on the subprime mortgage crisis. And when he was trying to do it, there weren’t any financial instruments to do that, right?

Michael Lewis

It was how to do it in a way where if the madness just kept going and going, you weren’t going to be bankrupt quickly. So you could have done things like bet against mortgage companies in the stock market, You could have shorted their stock. But it’s a bet that’s hard to hold for a long time.

And so your timing has to be exquisite. What he did was basically invent or have Wall Street firms invent for him the credit default swap on subprime mortgage bonds, which is essentially an insurance policy on bonds backed by subprime loans. So if the loans go bad and the bonds go bad, you get paid off on this insurance policy.

Think of it like I get to buy insurance on your house, fire insurance, and if it burns down, I get paid. So there’s something a little goofy about it. I mean, it used to be, very oddly, it used to be that I could go buy life insurance on you.

And if you died, I got paid a bunch of money. This obviously creates a very bad incentive. Murder,

Lydia Dean Cott

murder. Yes, yes,

Michael Lewis

exactly. but you can do this in the financial markets you can buy insurance policies on other people’s bonds and if the bonds go bad you get paid you couldn’t when Michael Burry started to think about this situation you couldn’t buy an insurance policy on a subprime mortgage bond so he had to go help Wall Street create it for him and then all the other characters in the story are then using that thing he creates to make the same bet

Lydia Dean Cott

is there anything else you wanted to say related to Michael Burry?

Michael Lewis

I would say the one other thing that’s interesting about him is that he so let me into his life he just doesn’t really do that usually it created an intimacy like I just really got to know him and really enjoyed like just hearing what he had to say like I just learned stuff from him even when he doesn’t make money on what everybody’s making it’s really interesting to hear what he’s thinking and just like have that as part of the furniture in your mind.

Lydia Dean Cott

Michael Lewis’s conversation with Michael Burry is coming up. It really is a very fun lesson.

Michael Lewis

I can remember you handing me your emails and like you had like thousands of, you had communicated with the world your whole trading life for years through email. And so it was a real-time account of your thoughts, of Wall Street’s response to your thoughts, of how the market moved. It was unbelievably valuable.

It was so different from like everybody reminiscing. Do you remember that? I remember that. And those emails,

Michael Burry

I think, were the main reason I didn’t get sued by my investors.

Michael Lewis

Because if I had been a skilled orator or somebody who loved giving conference calls, I would have done conference calls with my investors.

Michael Burry

And then maybe they wouldn’t have been recorded. But here I had emails with everybody on everything. And so it was very clear where we stood with everybody.

Michael Lewis

You were like, for me, people came to the right answer in different ways. And you came to the right answer in such a satisfying way, because not only did you see that the irresponsibilities in the subprime mortgage market. But you actually had a theory about the timing of it when it was all going to come unraveled.

And the problem with these positions, like with, oh, there’s a lot of insanity in X or Y, is that, yeah, you can be right, but you can be wrong for long enough that the market just takes you out of your positions. I think that’s right. This is why this is the big short.

Michael Burry

It’s the once in a century

Speaker 4

opportunity to actually say, I know when this is going to happen. You know, I’ve compared this to the 1990s bubble. And the reality is there was no telling when that would end. In most situations like this, there’s no good way to time it. And shorting it is just a high-risk endeavor.

Michael Lewis

Well, we’re going to get to today. But I wanted to revisit the big short just a little bit. And I’m curious what effect it had on your life.

I mean, there was the trade. There was the book. And then there was the movie.

You did let Christian Bale come and hang with you for a day, but you were remarkably chill about the whole thing. And I don’t think I’ve ever felt like I’ve really recapped with you, like, what effect this thing had on you, if any.

Speaker 4

I think I didn’t know. You’re right. I mean,

Michael Lewis

I’m on the autism spectrum,

Speaker 4

so I’m pretty good in my own head, and I’m pretty good at blocking out stuff. And so even this movie, I saw it at the premiere. I haven’t watched it since. The book, I read it when it came out, and I haven’t read it since.

Michael Lewis

That’s how I felt about it. I just move on.

Michael Burry

And so kind of took it as it came. I went to the premiere because my family wanted to go to the premiere.

Speaker 4

And as you know, I don’t do interviews because I don’t feel I’m good at this. And so I, you know, I haven’t done one, I think, since like I haven’t talked to anybody since I think the 60 Minutes interview.

Michael Lewis

About the big short.

Speaker 4

About this in an interview format. And now it’s the 10th anniversary of the film, 15th anniversary of the book. And yeah, I can’t believe it’s been that long. But, you know, I just kind of go on and do my thing and it doesn’t really affect me too much.

Michael Lewis

You didn’t feel it put you in the position of Oracle, that all of a sudden people are expecting you to predict the next thing? It was,

Speaker 4

as we mentioned, it is a very unique circumstance. It was a once-in-a-century type trade. People say once-in-a-century flood, once-in-a-century this, once-in-a-century, and it’s not really true.

Michael Lewis

It happens every 10 years.

Speaker 4

But this was, that opportunity was very unique. And I’ve basically told everybody I can, you know, ever since that that’s not going to happen again anytime soon.

Michael Lewis

What made it unique?

Speaker 4

Well, I was basically permitted to buy insurance on these bonds that were incredibly illiquid. And I was permitted to basically buy insurance and then trade and profit off them without actually having the insured item. And this was not expensive.

Nobody thought this could happen. I’d put on a lot of my position by late 2005. And I got a call from Goldman Sachs saying, what are you doing?

You’re the only person we know. You’re not a mortgage fund. You’re not hedging.

You’re doing something different. It’s not something that people were generally aware of, and I was. And so I could kind of walk in and basically pull the caper off.

Michael Lewis

There are three things I want to talk about at the back end of your story in the big short, and then I want to move on to the present. But the first is you have this terrific win. Your investors make a lot of money, and you end up closing your fund. Can you remind me why you closed your fund?

Speaker 4

My investors were generally mad at me. And they were generally mad at me even when things went well. And I didn’t feel at the time I had goodwill with anybody.

There was only one investor. I shouldn’t say his name, but love him. He is the only guy that invested with me late.

That last year and a half or so, nobody came to me.

Michael Lewis

nobody wanted to invest with her. And even when we made the money, it was, whew, we don’t want to go through that again. Did anybody ever call after the book, after the movie, after they got their money back and a lot more, did anybody ever call you to apologize? No. No, no, no. It’s kind of an amazing I didn’t expect it either. I know you didn’t expect it, but at some point when there was cooling off and they looked at their winnings, I would have thought someone would have called and said, you know, Sorry I got so angry at you for doing this trade.

Michael Burry

No, nobody did. Okay. I didn’t expect it. It’s Wall Street.

Michael Lewis

When did you reopen?

Michael Burry

Michael Lewis

And since then, how have you done?

Michael Burry

Done all right. I think it’s all been the same since. So I remember when I opened again, I didn’t want investors I didn’t know.

Michael Lewis

Yeah.

Speaker 4

I didn’t want to be above the SEC threshold for registering as an investment advisor. I wanted to keep it small. So I just went to people I knew and some of my own money, and we created a fund. It was probably a situation where if I wanted to, I could have raised billions,culv

Michael Lewis

but that wasn’t my intention. You didn’t want to relive the experience you’d already had. I didn’t want to deal with Wall Street. I didn’t want to deal with those kinds of investors. I knew

Michael Burry

who my good investors were from the prior time, and those were the only people I wanted to deal

Michael Lewis

And so it just was a small operation. And I kept trying to keep it small. And I didn’t really market it.

I didn’t market it at all other than just that first group. And what happens with that is that some of those people that were with me in 2000, individual doctors or whatever, they get old. They actually pass away.

Ultimately, it just became something. There was a natural attrition in the pool. And so it kept us small.

I have not paid that close attention. All I see is every now and then there’s some explosion on Twitter about you. And it’s wrong.

They’re all wrong. We’re going to take a quick break. And when we return, I asked Michael Burry about why he placed bets recently against two large tech stocks, Palantir and NVIDIA.

So let’s talk about this. Explain to me, you have this very small operation with just a handful of investors. What are the filing requirements? What do you have to hand in so that people can see what you’re doing?

Michael Burry

They get to see US securities traded in the US that are stocks. They get to see stocks and they get an incredibly bastardized version of options. Okay.

Michael Lewis

How is it bastardized?

Michael Burry

Because say I buy 50,000 put options on Palantir and that’s 50,000 times 100. And so I’m short strike 50 way out of the money. it’s like a $200 stock now but I think it’s worth $30 or less so I buy them way out of the money two years out

Michael Lewis

you’re betting that Palantir is going to drop by a lot

Michael Burry

a lot in two years

Michael Lewis

but over a long period of time

Michael Burry

and the press I’m working out and I see on CNBC I have a billion dollar short position against Palantir it’s $10 million

Michael Lewis

I saw this too I couldn’t believe it

Michael Burry

so what they do is they take the underlying shares under those options contracts and they multiply it out by the current stock price. So I have a, actually it was less than $2 option and it was being priced as if I owned the 200. So it was two orders of magnitude off.

Michael Lewis

And that happens also with index.

Michael Burry

So I would take hedges on my portfolio and people would say, oh my gosh, he’s shorting a billion and a half of the S&P 500, or he’s shorting, and there’d be these explosions. And it’s just wrong. It’s notional. What’s interesting is that they don’t do this for anybody else.

Michael Lewis

So maybe you should give more interviews. I asked you what effect the big short had on your life. This is an effect, the big short had on your life.

Lydia Dean Cott

And compliance, and my compliance, since the financial crisis, everything changed. In compliance,

Michael Burry

we have a compliance officer inside the firm, And he just keeps saying, don’t talk to anybody. Don’t talk to anybody. Don’t respond to anybody.

Don’t respond to anybody. And so I think since the movie came out and this really started happening, there was a frustration building in me to want to say something. And I couldn’t. And so when COVID came about, I had some strong feelings on that.

So I went on Twitter, but I was only allowed to talk about things that weren’t stocks. And so that’s fine. I mean, but I had to talk about social things.

Right. And I got in trouble with that because everybody gets in trouble with that. So I got off Twitter.

Michael Lewis

But you got back on.

Michael Burry

I got back on recently because we deregistered. I don’t run that pool of money anymore. I’m just going to run my own money. Got you.

Michael Lewis

So it’s just your money now. Mostly, yeah. Why did you decide to do that?

Michael Burry

I think that we’re in a bad situation in the stock market. I think the stock market could be in for a number of bad years. And I think it could be a longer bear market, more akin to 2000.

But the structure of the industries changed. Back then, it was hedge funds, mutual funds, separate accounts businesses. But there were people running pools of money and thinking about stocks and investing in stocks.

And so I felt – I didn’t know I was on the autism spectrum. I felt that I had an edge there. I could kind of sit outside of all these human psyches and figure things out, and it worked well.

Today, it’s all passive money, and it’s over 50% passive money. There’s –

Michael Lewis

Index funds.

Michael Burry

Less than 10% of money, some say, is actively managed by managers who are actually thinking about the stocks. and in any kind of way that’s long-term. And so the problem is in the United States, I think when the market goes down, it’s not like in 2000 where there was this other bunch of stocks that were being ignored and they’ll come up even if the NASDAQ crashes.

Now I think the whole thing’s just going to come down. And it would be very hard to be in long stocks in the United States and protect yourself. And so that’s why I decided to get out of it.

Michael Lewis

the fund had to be long in some way?

Michael Burry

Well, I didn’t want to go through that with investors.

Michael Lewis

I see.

Michael Burry

That makes sense. Of course, I closed the fund and I put on all the positions for myself

Michael Lewis

right away, the same position. So you’re still in the position. So I want to talk about this position.

I found it, again, I was watching it from a distance, but tell me what I missed. Someone, CNBC or whoever, gets a hold of your 13F. On this 13F, it says, Palantir position is especially big. It looks big because the put options, they’re way, way out of the money.

They were struck at 50. So, okay, you had to release this information about your fund. You weren’t advertising it to the world in any unusual way.

You weren’t going out and talking trash about Palantir. This position gets released. And then the next thing I do, I see Alex Karp, who runs Palantir, like going after you for owning puts on his stock.

And I don’t think I, I mean, during the financial crisis, you will remember that the head of Morgan Stanley at the time, John Max, he blamed short sellers for what was happening to him. And they banned short selling of the stocks very, I think, briefly. Right. But it’s always a really bad sign when people start going after the short sellers.

Michael Burry

It’s in the United States,

Michael Lewis

in the United States. And I was thinking, oh my God, I just wouldn’t want to be in your shoes. You just made a trade.

But he’s provoked me. I want to understand your trade. It’s a bet that Palantir goes way, way down.

Michael Burry

Way, way down in two years.

Michael Lewis

What do you understand about their business that the market doesn’t?

Michael Burry

Huh. So my belief is that this is a company that had a set of applications that were very expensive to install because you had to hire their consultants after you bought the software just to install it and learn it. Palantir had this reputation in government. Government contracts is a nasty business, and I think they’ve figured out how to do it and get some contracts.

Michael Lewis

How much of their revenue is government contracts?

Michael Burry

It’s fallen off a lot. It was a majority, and now it’s more even. Because during the AI build-out, They basically marketed themselves to corporations.

Well, corporations have come to them. C-suites of every public corporation have board members, CEOs who feel under the gun to AI something. And so there’s this scramble.

And now they’re not the only ones. I keep saying they’re the only ones. But IBM does basically the same thing.

Their business is actually bigger than Palantir’s. And they are not really all government. Government contracts are not generally that profitable. And so IBM’s got a really good business inside it, but it doesn’t get the credit for a Palantir valuation on that business, even though it is growing fast too.

It’s growing about as fast as Palantir was. And so let me put it this way. There are, I think, five billionaires that came out of Palantir because they own Palantir stock.

And the revenue was $4 billion or basically $4 billion. So the billionaires to revenue ratio was greater than one. And I’ve never seen that before.

Michael Lewis

Was that what attracted your attention in the first place?

Michael Burry

Well, that’s a cute little thing.

Michael Lewis

I was like, wow, how did they get five billionaires out of that group?

Michael Burry

And so out of a company that has $4 billion in revenue, And actually, stock-based compensation basically would have weighs almost all their income.

Lydia Dean Cott

They have to pay their people who are doing all this consulting so much in stock that they just use stock-based compensation. Then what they do is they buy that back. And the company would like you to just give them credit for what Wall Street generally does is they take the earnings per share, and then they add back the stock-based compensation because it’s non-cash.

Michael Burry

And they add it back to the earnings.

Lydia Dean Cott

And I think actually the way GAAP accounts for stock-based compensation is skews low versus what it actually costs. The real cost, you can look at how much our company is buying back to offset that dilution. And you can just take that amount and deduct it from cash flow.

Michael Lewis

And so if you do that with Palantir, historically, they don’t make anything.

Michael Burry

So I basically looked at the company and said, you’re worth this much and you really don’t make anything.

Michael Lewis

of its tiny little bit of revenue.

Michael Burry

And you have all these billionaires.

Michael Lewis

You had an argument back in 2008 for when the subprime mortgage bond market was going to start to unravel, when people are going to start to default. Do you have a timing argument for now with Palantir?

Lydia Dean Cott

Well,

Michael Burry

I think this is the AI consulting thing. So Palantir and NVIDIA are the two luckiest companies on the planet. Neither produced a product for AI.

Michael Lewis

Yeah, I know.

Michael Burry

But they’re the two poster children for AI.

Michael Lewis

Yes. NVIDIA was a computer graphics chip company.

Michael Burry

NVIDIA was a computer graphics chip. I actually knew the CFO. We talked in 2015 or 16, I went long the stock and I said, hey, you’re doing a great job.

I love how you’re buying back stock. Her kids was on my kid’s basketball team. I think I bought the stock like a year or two later.

It went from $0.20 to $0.90 at the time, which is like $0.40 now after the splits. NVIDIA was lucky. They got lucky once with the crypto mining because crypto mining needed GPUs.

They weren’t custom for crypto mining. They were just the thing that was there that could be used. And then AI came along and it’s the same deal.

About a year and a half ago, a year and a half to two years ago, Palantir was not an AI company. Basically, when ChatGPD came out, They basically put an AI cover on their applications that they were selling and then selling all this consulting on, and they call it AI. But that’s what every company is doing now.

Michael Lewis

But is there a timing argument for AI then?

Michael Burry

Yeah. So this gets to what does this bubble look like? This bubble looks an awful lot like the dot-com bubble, which is not really a dot-com bubble.

It was a data transmission bubble. It was a huge build out of fiber and a huge fiber needed routers and routers needed fiber and it just blew up. So the market peak was in March 10th of 2000.

Cisco grew 55% that year revenues in 2000. And it grew 17% in 2001 because the investment continued. It actually peaked for about a year after the top in the market.

And so what you can do is you can look at net investment, which is capital expenditures less depreciation over time. And you can put it against GDP, a nominal GDP, to compare it across eras. And you get these nice mounds of investment manias.

And what you see in every prior one was the relevant stock market peak was before you’re even halfway done with the capital expenditure. In the majority of cases, the capital expenditure hadn’t even peaked yet. And so right now we’re ramping up for capital expenditure.

And what’s happened is we’ve gotten into this part of a phase where if you announce a dollar of CapEx on AI, your market cap will go up $3 for every dollar you have. Oracle, we saw that with Oracle. Giant company was up 40%.

Like, incredible. Larry Ellison was briefly the richest man.

Michael Lewis

Yeah.

Michael Burry

Because they announced this massive multi-hundred billions of dollars of basically spending that they would have to, well, they announced bookings, but they would have to spend. They’re still building it out.

Michael Lewis

Where are we then?

Michael Burry

I can’t say because it hasn’t happened fully yet. We are at levels of prior peaks.

Lydia Dean Cott

We’re at the level of the shale revolution relative to GDP.

Michael Burry

We’re at the level, near the level of the dot-com, when the dot-com, the NASDAQ peaked.

Michael Lewis

So you felt two-year puts were enough?

Michael Burry

I thought two years would be enough, yes. I think two years would be enough. I think if you’re going to buy something now, buy healthcare stocks,

Lydia Dean Cott

they’re really out of favor. If you own something that has been gone up a lot, you’ve done really, really well in it, it’s shooting straight up, and you think it’s kind of overvalued, I think that’s something you should sell.

Michael Lewis

I want to ask you one weird question, more question about the stock market. And that is you own Berkshire Hathaway and Berkshire Hathaway just announced that we just was revealed that it bought a big chunk of Google stock. Did that disappoint you or do you see how they’re thinking?

Michael Burry

We don’t know that that is Buffett that bought it. One. Right.

Two, Google is the value investor’s favorite in that group. It’s the one that everybody said, well, it’s cheaper than all the others. It’s got, it’s got relative value and it is Google.

but I know that since I got chat GPT and Claude, I don’t use Google. And Google search, the magic thing about Google search was how little it cost because most requests were not monetizable. So for the 85% of searches they get that are not, nobody’s going to buy, even looking to buy anything or think it’s not product related.

It’s history. You know, what did Columbus really do? You know, it’s not monetizable.

And so they better not lose a lot of money on that. AI changes that. AI is expensive.

I run queries regularly that I know cost tens of dollars just for my inquiry. One inquiry. Google had had those searches down to infinitesimal fractions of a cent.

So that business is the golden goose. And it’s really basically all their cash flow. So the other thing about LLMs is that look back to the dot-com boom.

That was an amazing telecommunications revolution. If you were alive in the 80s and then you were alive in the 2000s, it’s nothing the same. It changed everybody’s life in a dramatic way.

And still, AOL just disconnected its last dial-up just like a year ago or earlier this year. I mean, the penetration was very slow in the United States. It was pretty lightning fast in places like in Singapore, Seoul, these one-city countries type thing or very dense urban areas.

But it was a long time by the financial crisis. But even after the financial crisis, there was a lot of people in the United States who were not online or were not really doing it. So back then, as that connectivity came up, there was a lot of things people wanted to sell.

People wanted to sell goods online. They wanted, Amazon grew on that. They wanted to socialize online.

They want to do these things.

Lydia Dean Cott

With LLMs,

Michael Burry

most people are getting what they want out of them right now on the free level. And they’re massively penetrating. What more are they going to do for the average person?

Not that much. The money is going to be in the developer space. And there’s a lot of money in that space.

Michael Lewis

But this idea that, I mean,

Michael Burry

a very small percentage of people want to pay for their LM,

Lydia Dean Cott

and they won’t ever have to because this is going to be commoditized.

Michael Lewis

So I think you’re getting a sense of how Michael Burry’s mind works. When we come back from the break, I finally find out why he decided to talk to me for the big short.

All right, so I’m going to let you go in a minute, but there are a couple of other things I want to ask you about because I just want to pick your brain on them. What triggers a debt crisis in this country? Are you paying much attention to our government’s finances, and how do you feel about them, and where do you think it’s headed?

So predicting this stuff is the problem. I always kind of put it in terms of waiting for Castro to die. It’s not a strategy.

people live a long time countries are very powerful and they can do a lot the united states is the reserve has the reserve currency obviously trump is bullying around the world right now so

Michael Burry

the united states is still a very primary country and um betting that they can’t find a way

Michael Lewis

is not something i’d want to do anytime soon i do think it’s ridiculous I mean, we have, what, $4.5 trillion in taxes from individuals. We have about $400 billion from corporations. I mean, you could double the taxes on corporations.

That’s $400 billion. What does that do for you? We have $1 trillion in interest payments on our debt every year.

So when you get that trillion, that interest expense is getting up there,

Michael Burry

and then you have all the entitlements.

Lydia Dean Cott

We do not have the social cushion that a lot of other developed countries have. But we can’t really afford doing much more than we’re doing.

Michael Lewis

So you think the debt’s just going to keep growing and growing and growing, but you wouldn’t want to bet when it breaks? No, you can’t because it’s the United States. How do you feel about Fed independence? Do you care?

Michael Burry

I think I have a different – I have a kind of sick view on this.

Michael Lewis

I think that when Trump starts running the Fed, it might become the end of the Fed. Because if he’s running the Fed, then everybody’s going to hate it, not just me. So we’ll see.

Michael Burry

I think the Fed has done a lot of damage over the last 100 years or since its inception in 1914.

Michael Lewis

And I feel we don’t need the Fed. We don’t need it. Unless the Fed is going to say, look, why are they going to drop rates?

There’s no reason to drop rates now. Inflation is starting to come up a little bit. The economy is muddling along.

But our neutral rate is not 1% or 0% or where Trump wants it. Our neutral rate is probably around 4% or it’s probably around where we are now. And think about when you drop rates, you kill all the savers, all the fixed income people.

They suffered for so long. They’re actually finally getting a rhythm to their lives again. None of this is costless.

and you think you’re going to just drop rates, be careful what you wish for. You might drop rates, and because of the debt situation, the curve can steepen. Did you just say you want to get rid of the Fed?

Yeah, I think the Fed doesn’t do anything very helpful. I think it’s the easiest job in the world. What do you replace it with?

I think the US Treasury could have a department that just makes these decisions. I mean, the Fed already is monetizing Treasury debt, whatever. I mean, they’re almost the same department already your institutional pessimism does it lead you to like i don’t know bitcoin or gold or one of these refuges that i think that bitcoin at 100 000 is the most ridiculous thing

Lydia Dean Cott

that same people are sitting on tv talking about bitcoin they’re just casually it’s 100 000 It’s down. Now it’s 98,000. It’s not worth anything.

Everybody’s accepted it. It’s a tulip bulb of our time. It’s worse than a tulip bulb because this has enabled so much criminal activity to go deep under.

Michael Lewis

So where do you hide? Do you have gold?

Michael Burry

I’ve had gold since 2005.

Michael Lewis

I’m going to let you go back. The last question I have, I never asked you this question. you let me into your kitchen in a really, you made yourself very vulnerable and you let me tell your story. Do you regret it?

Michael Burry

When you showed up,

Michael Lewis

I knew you from Liar’s Poker and I didn’t know what

Michael Burry

you were going to write about me because you’re a great author. I knew you from Moneyball and

Michael Lewis

blindside.

Michael Burry

But when you deal with Wall Street, you tend to be fairly critical. And so I’m a big

Michael Lewis

hedgehog manager,

Michael Burry

just shorted your house. You approached me.

Michael Lewis

Actually, I got a call from a

Michael Burry

friend. You talked to, I think, one of my friends in New York, and he called me and he said, I just talked with Michael Lewis. Congratulations.

Lydia Dean Cott

You’re going to be one of the heroes in his new

Michael Burry

book. And that was when I really realized, oh, this is going to go okay. So in a way, I was giving you all that stuff defensively.

I didn’t want you having a, I wanted to make sure you had everything, full disclosure, because I thought I was, I didn’t do anything wrong. And I wanted you to know that. Yeah.

Michael Lewis

You know, and your appeal to me was you were and are a fantastic teacher, like a really good explainer of your own thoughts. And your own thoughts can sometimes be peculiar, like just different than what other people are thinking. And you don’t mind holding them.

You know, you don’t mind having views that just would embarrass people who are less sure of themselves to articulate. Well, being on the spectrum, I’ll just move back into my own head and move along. It was great seeing you.

I’m sorry you’re not out here more. And if you were out here, I wish you’d just let me know because I am down in your old neck of the woods some. And it’d be fun to go grab dinner.

Michael Burry

We’re still out there a lot. So I’ll look forward to seeing you. All right. Miss you.

Michael Lewis

Yeah, miss you too. Thank you, Michael.