Malcolm Reynolds finally speaks

Actually, it's his doppleganger Dr. Michael Burry who was one of the first to figure out the toxicity of CDOs from subprime mortgages and make a ton of money betting against them. As chronicled in Michael Lewis's excellent The Big Short, Burry is an interesting character-- a former neurology resident who quit medicine to start a hedge fund which was probably more successful than 99.9% of funds out there. Yet, he felt like his clients never really appreciated him, and the stress of running the fund caused him to shut down the fund.

His sole public statement after closing down the fund in 2008 was a column in the NY Times. That is, until now.

A third video cannot be embedded for some reason, but you can watch it here.

From his investments in farmland and gold, I think it's fair to infer that Burry sees inflation in the future.

What's a little disconcerting to me is the question asked in the video that I couldn't embed: whether shorts are to blame for the financial crisis. I can hardly believe people still think like this. Shorts risk their own assets by taking large bets against the market (usually). They provide liquidity. Most important of all, they provide information. The market will eventually find a new clearing price with that new information, but the new price is a function of the underlying prospects of the business, not the fact that some shorts discovered that information and by their actions, the public at large became aware of it.

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One of the failure points

One of the failure points that never seems to get enough attention from my point of view is the dismal performance of the ratings agencies. It gets mentioned of course but usually in passing.

Isn't most of the crisis averted if the ratings agencies do their jobs?

Were they incompetent or corrupt? Is there another explanation for their terrible performance?

It's also true that almost everyone in the food chain was incompetent in trusting them.