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Dr. Michael Burry UCLA Speech – Predict the obvious, get raided and audited

Alexander P Morris — Tue, 26 Jun 2012 00:17:11 +0000

Dr. Michael Burry saw the mortgage crisis coming from miles away. He was featured in Michael Lewis’ “The Big Short”, along with others who also saw the debacle coming. This year, Dr. Burry was keynote speaker at the 2012 UCLA Dept of Economics Commencement. It’s a speech well worth listening to. Dr. Burry is quite pessimistic about the future of U.S. as the debt-to-GDP ratio rises to levels higher than that of Greece. And the problems are no longer in the future, he says, but they have already begun to manifest themselves throughout society.

Perhaps most shocking to some (unless you’ve already gotten used to the TSA groping children)… he describes what happened to him after he wrote a New York Times op-ed criticizing the actions of the government and the Federal Reserve ( I Saw the Crisis Coming. Why Didn’t the Fed? – NY Times ). Within weeks all 6 of his funds were audited, he was compelled to provide Congress with every email he wrote since 2003, and the FBI showed up at his door. He wasted thousands of hours and over $1 million in legal/audit fees defending himself against a frivolous witch hunt against someone with clout who dared stand up and say “I saw it, why didn’t you?”

While not one bankster has ended up in jail, banks have collectively been given $$ TRILLIONS more of our money. And instead of consulting with truly smart and insightful people like Burry (instead of the crooked bankers themselves) as to how such events can be avoided in the future, our government offensively attacks those who predicted the crisis well in advance. Instead of seeing people like Burry as able to offer true wisdom and insight, they treat him as if he had somehow played a part in masterminding all the pervasive and massively over-leveraged mortgage fraud that went on.

Another great quote from his speech: “As it turns out, information is not perfect, volatility does not define risk, markets are not efficient, the individual is adaptable.”

As a final note, here’s another great bit of Burry’s insights I’ve kept on hand since reading “The Big Short“:

‘ In Dr. Mike Burry’s first year in business, he grappled briefly with the social dimension of running money. “Generally you don’t raise any money unless you have a good meeting with people,” he said, “and generally I don’t want to be around people. And people who are with me generally figure that out.” He went to a conference thrown by Bank of America to introduce new fund managers to wealthy investors, and those who attended figured that out. He gave a talk in which he argued that the way they measured risk was completely idiotic. They measured risk by volatility: how much a stock or bond happened to have jumped around in the past few years. Real risk was not volatility; real risk was stupid investment decisions. “By and large,” he later put it, “the wealthiest of the wealthy and their representatives have accepted that most managers are average, and the better ones are able to achieve average returns while exhibiting below-average volatility. By this logic a dollar selling for fifty cents one day, sixty cents the next day, and forty cents the next somehow becomes worth less than a dollar selling for fifty cents all three days. I would argue that the ability to buy at forty cents presents opportunity, not risk, and that the dollar is still worth a dollar.” He was greeted by silence and ate lunch alone. He sat at one of the big round tables just watching the people at the other tables happily jabber away. ‘

Congressional Insider Trading Scam – our Rule of Law doesn’t apply to the 1% who run the Government and the Country

Alexander P Morris — Wed, 16 Nov 2011 00:15:19 +0000

CBS News’ Steve Kroft reports that members of Congress can legally trade stock based on non-public information from Capitol Hill. We’ve already discussed this type of corruption in the past, and it’s great to see the issue receive so much more widespread publicity… You also see by Nancy Pelosi’s attitude how a two-tiered “Rule of Law” is practically considered a “congressional entitlement” at this point. Hint to OccupyWallStreet protesters, HERE IS YOUR REAL ONE PERCENT!!! (actually, more like the truly thieving and conniving .1% who want you to grant them even more money and power)

(CBS) “The buying and selling of stock by corporate insiders who have access to non-public information that could affect the stock price can be a criminal offense, just ask hedge fund manager Raj Rajaratnam who recently got 11 years in prison for doing it. But, congressional lawmakers have no corporate responsibilities and have long been considered exempt from insider trading laws, even though they have daily access to non-public information and plenty of opportunities to trade on it.”

“So in 2004, Baird and Congresswoman Louise Slaughter introduced the STOCK Act which would make it illegal for members of Congress to trade stocks on non-public information and require them to report their stock trades every 90 days instead of once a year. .. Kroft: How far did you get with this? Baird: We didn’t get anywhere. Just flat died. Went nowhere. Kroft: How many cosponsors did you get? Baird: I think we got six. Kroft: Six doesn’t sound like a very big amount. Baird: It’s not, Steve. You– you could have– ‘National Cherry Pie Week’ and get 100 cosponsors. When Baird finally managed to get a congressional hearing on the STOCK Act, almost no one showed up. It’s reintroduced every session, but is buried so deep in the Capitol we had trouble finding congressmen who had even heard of it.”

“And former House Speaker Nancy Pelosi and her husband have participated in at least eight IPOs. One of those came in 2008, from Visa, just as a troublesome piece of legislation that would have hurt credit card companies, began making its way through the House. Undisturbed by a potential conflict of interest the Pelosis purchased 5,000 shares of Visa at the initial price of $44 dollars. Two days later it was trading at $64. The credit card legislation never made it to the floor of the House.”

“In the past few years a whole new totally unregulated, $100 million dollar industry has grown up in Washington called political intelligence. It employs former congressmen and former staffers to scour the halls of the Capitol gathering valuable non-public information then selling it to hedge funds and traders on Wall Street who can trade on it.”

Owens Corning – Update on Bankruptcy Case

Alexander P Morris — Tue, 30 May 2006 22:00:00 +0000

Owens Corning has finally gotten a definite figure on its asbestos liability claims, and also offers an olive branch to existing shareholders… But is it worth investing in yet?

Owens Corning – Great Play on Asbestos Bill or Bust?

Alexander P Morris — Wed, 26 Apr 2006 22:00:00 +0000

Owens Corning, a once solid company that was forced into bankrupcy due to asbestos litigation, has recently seen its stock (OTC:OWENQ) trade as high as $5.50/share to as low as $1/share on speculation that Congress will pass the asbestos bill. So, is this really a good asbestos play? Or are investors missing one key point…