Who was the first person to realize our banks had invested America’s future in fiscal insanity?
Check out this NPR story.
Then Burry began to realize that the futures of several companies he was investing in turn on a weird lending market, the subprime mortgage bond market. So he started reading the prospectuses of subprime mortgage bond offerings. In the structure of the loans, Burry could see the future disaster. So he figured out how to use this knowledge to his advantage, and he became the first investor off Wall Street to make the big bet against them.
You have this body of facts out there in the financial world, and the vast majority of the people in that world are organizing the facts into one kind of picture — and it’s a pretty picture. And a handful of other people take the exact same facts, but they organize it into a different picture.
– Michael Lewis
Burry went in so early that his investors thought he was crazy.“He ends up feeling more cynical about Wall Street than anybody I’ve ever met because of his dealings with the Wall Street firms,” Lewis says.
Because he didn’t have much connection with people, everything Burry did was via e-mail. So Lewis says, in researching his book, he got to benefit from a perfect, real-time record of what was going on in these markets.
“The one guy that I could trust in the middle of this crisis was this fellow with Asperger’s and a glass eye,” he says “He became the moral center of this market for me because he was the most honest character.”
This reminds me of another fellow who wasn’t autistic when he told the SEC that wall street Lion Bernie Madoff was a Ponzi schemer. The SEC shrugged off the allegation for six years. Maybe David Ross should be appointed to the Commission. He’d fit right in.
