
Michael Burry of ‘The Big Short’ Slams Virus Lockdown - starpilot
https://www.bloomberg.com/news/articles/2020-04-07/michael-burry-slams-virus-lockdowns-in-controversial-tweetstorm
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spodek
> “Universal stay-at-home is the most devastating economic force in modern
> history"

Pursuing perpetual economic growth, combined with externalizing costs where
possible, on a finite planet beats its devastation by far.

Among other things, that growth and externalizing costs led to factory farming
and encroaching into wildlife territory that have caused pandemics to increase
in recent decades. Not limiting that growth -- at least limiting the number of
animals we pack together -- will create more pandemics. Limiting it won't
solve everything but it will decrease a lot of problems, including pandemics.

Why pandemics will keep increasing: [https://shows.acast.com/leadership-and-
the-environment/episo...](https://shows.acast.com/leadership-and-the-
environment/episodes/318-why-pandemics-will-keep-increasing-and-how-we-can-
revers)

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KaiserPro
If we are lucky, and there is a miracle, the mortality rate will be < 0.2%.
Even more of a miracle and the R0 is ~6 and most people are asymptomatic.

However, we could still be on course for a second wave, like 1919, then we are
totally fucked.

But we don't know, and really didn't know when europe went into lockdown. It
looked like the mortality was ~7% which would have been devastating.

I have yet to see any double blind study that suggests _any_ drug makes an
impact. Barring vitamin D, but thats a metastudy, and also its too late for
most people (you need a month.)

In short, he asking us to make a massive gamble.

Yes, the poor are suffering, but helicoptering money is a piece of piss
compared to re-building a community. if the US had decent unemployment
insurance, like germany, then unemployment would be 10% of what it is now.

~~~
JackFr
> if the US had decent unemployment insurance, like germany, then unemployment
> would be 10% of what it is now.

I’m not sure I understand how better UI reduces unemployment.

But more importantly unemployment only captures half the problem. Businesses
are not designed to go into hibernation. If asked you to hold your breath for
two hours, it’s gonna be tough for you to start breathing again when I give
the all clear.

~~~
boudin
All those are man made problem and have solution. Our system is not designed
to be paused, but can be changed to do so. To pause the spread of a virus is
much harder.

~~~
okr
Do you have an idea on how to implement a pause function into the economy? We
live with the flue, but actually a pause could help there too to stop the
spread in the season.

Who pushes the pause button? How do the businesses agree on pushing their
pause button at the same time?

Should there be a pausing fund? Paid in by all businesses that make business
overseas?

I find this interesting. Reminds me a little bit on traffic jams. If cars were
automated, all cars could start/stop at the same time.

~~~
rswail
We have a pause function, it is when governments issue public health and
safety orders.

The people that push the pause button are elected governments,

There is a pausing fund, it is taxes and government borrowing through the
national debt.

~~~
okr
I agree. But did not consider it as a solution. :)

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cm2187
It reminds me the often quoted story of the paperclip maximiser. This powerful
AI set up by a factory to improve its production of paperclips. Its objective
function is solely to maximise the number of paperclips produced. So it does a
great job at it, then becomes out of control, starts consuming all resources
on earth to produce more paperclips, and once it has destroyed earth, goes on
to take over the universe to produce paperclips.

I feel a lot of the scientific advisors to governments are "covid19 death
minimisers", solely focusing on people dying from this virus at the expense of
any other consideration, like the effect of elective procedures being
postponed indefinitely, tens of millions of families in hardship, economic
collapse, etc.

~~~
throwlaplace
i feel like i'm taking crazy pills whenever i read these "consider the
economic casualties".

can you please tell me what the projections re economic casualties (ie people
that die from e.g. starvation/privation post covid19) are for literally any
other first world nation? my distinct impression is that only in the US are we
being forced to choose between people dying from covid or people dying from
poverty as a result of covid. shouldn't that tell you something about how
we're approaching this problem in and of itself!?!

~~~
cm2187
I don't think we are going to settle the debate utilitarianism vs kantianism
in this thread but I'll try at least to defend one side.

I didn't use the term "economic casualties". An economic crisis causes a huge
amount of human suffering on massive scale, hardship on tens if not hundreds
of millions of people. And this itself may have its own health consequences,
but I think human suffering in all of its forms needs to be considered.

But even if we assigned zero weight to that human suffering, if we go the
route of pure "death minimisation", it is not even clear that the economic
collapse route is less lethal.

For two reasons: the first is that it is unclear what additional mortality the
virus would cause vs a regular year. The median age of a covid19 victim seems
to be in the 80s, and almost always (99% based on Italian figures) with some
co-morbidity. It is not clear how many would have died within 18 months of
something else. The other thing is that economic collapse does cause deaths
also, for instance through political unstability. I think it is fair to say
that the arab spring was triggered by the economic hardship caused by the 2008
crisis. And I don't know that we would have had a WW2 without the 1929
depression.

~~~
throwlaplace
>The other thing is that economic collapse does cause deaths also

you've completely missed my point: is there any other western nation claiming
that what's at stake here is economic collapse (and consequent deaths) or the
deaths of the vulnerable to the virus? i think the answer is no (but i don't
read german/norwegian/italian newspapers so i might be wrong). only in the
united states are we forced to choose one or the other. you should stop to
consider why that's the case.

~~~
cm2187
I am not sure I understood your post. Are you saying that other western
nations do not expect a long lockdown to cause an economic collapse? Or that
everyone agrees that an economic collapse is preferable to covid19 deaths?

~~~
throwlaplace
i'm saying that other western nations have welfare policies in place that
prevent supposed economic hardship and suffering from a
downturn/recession/depression while america does not. simple as that.

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JackFr
I think he is spot on.

We are drowning in platitudes while people’s lives are being ruined.
Entrepreneurs and small business owners are seeing their life’s work stripped
from them by a policy choice served by ass covering politicians and a class of
media elites ever willing to promote the post-modern illusion that death is
subject to our whims and not the other way around.

~~~
rswail
We are drowning in platitudes while people lives are being lost.

People are having their lives stripped from them by economic policy choices
that value unaccountable wealth accumulation combined with rent-seeking and
corruption by a group of economic elites ever willing to promote the post-
modern illusion that wealth and societal health is due to "job makers" and not
the other way around.

If the economy and business cannot survive what is now only 2 months of
interruption, then perhaps the economic system needs to be more robust and
structurally sound. Deregulation has led to an unaccountable financial
"industry" that produces nothing except churn in the name of "liquidity".

After the Great Depression, in addition to the economic stimulus in the US of
WW2, the market and banking reforms led to a more proper focus on Main St and
not Wall St. That focus needs to return.

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conformist
He also publicly claimed that index funds are a bubble fairly recently.

([https://www.google.com/amp/s/www.bloomberg.com/amp/news/arti...](https://www.google.com/amp/s/www.bloomberg.com/amp/news/articles/2019-09-04/michael-
burry-explains-why-index-funds-are-like-subprime-cdos))

Two thoughts: Maybe bloomberg will interview him whenever they want a somewhat
contrarian bearish view? If he made money from short positions now, could it
have been for a reason completely unrelated to COVID?

------
lordnacho
I don't think it's crazy to balance the economy with lives lost. Much like how
we accept that some people will die in traffic accidents if the speed limit is
a certain number.

However it seemed last month that the correct thing to do was to close down.
At least so that hospitals were not overwhelmed, causing extra deaths beyond
the "natural" amount for this disease and others that people use hospitals to
treat. In other words, a non-linear effect on death rates caused by the sudden
spike.

Now we're between a rock and a hard place, because while taking a week or two
off would be tough but OK for most businesses, taking 4 weeks or 8 weeks off
is not simply 4x or 8x as bad. Thus, another, competing, non-linear effect.

We also have the problem that the pandemic is not synchronized, so any area
that does manage to keep it down is going to have to keep the border closed
towards people from places where it's still going on.

The only solution that seems like a good compromise is to have lots of testing
so that people who know they are infected, even ones who don't feel ill, can
be quarantined. Also of course generally keep old people away from too much
contact with everyone else. But somehow even months after the virus was
discovered, the number of people tested anywhere is not really high. I would
have thought we'd ramp up production of test kits massively so that everyone
who's been near someone positive is tested, plus everyone else is randomly
tested.

~~~
imglorp
What if we spent $1 trillion on the science of testing and treatment instead
of bailing out more congressional darlings? It's not like we don't have the
dough.

~~~
travisoneill1
Past a certain point, you can't buy speed.

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pinkfoot
You will also note that Dr Burry doesn't live in Italy or NY and has enough
money to escape to NZ in a private jet if he turns out to be wrong.

~~~
JackFr
As someone who has been sheltering in place in NYC for the past three weeks,
what is going on in the news media’s portrayal of New York? I’ve had random
acquaintances reach out from abroad and across the country who I haven’t
talked to in months or years reach out to see ‘how we’re surviving‘. The only
people I know who fled New York did so because they owned larger homes which
would be more comfortable, rather than a fear of the virus.

You’d also be surprised how hard it is to escape to New Zealand right now.

~~~
EdwardDiego
> You’d also be surprised how hard it is to escape to Mew Zealand right now.

Yep, closed to all but citizens and permanent residents - so unless you pulled
off a Peter Thiel[1] (sigh), you're shit outta luck at the moment.

[1]: [https://www.nzherald.co.nz/indepth/national/how-peter-
thiel-...](https://www.nzherald.co.nz/indepth/national/how-peter-thiel-got-
new-zealand-citizenship/)

------
xtiansimon
> “It very suddenly reverses the gains of underprivileged groups, kills and
> creates drug addicts, beats and terrorizes women and children in violent
> now-jobless households, and more. It bleeds deep anguish and suicide.”

This sounds the ravings of someone who acted like they saw the hidden gears
moving the economy. Now they’re frighteningly uncertain, and want to exert
their influence to regain their sense of comfortable uncertainty. And in the
trade-offs, he's revealing his biases, which is careful to limit to good luck:

> "Vaccines are not coming anytime soon, so natural immunity is the only way
> out for now."

But we've heard enough from other people stupid enough to say it out loud--
we're going to lose some % people, but the damage to the economy will be worse
--to know what he's alluding to.

Frighteningly uncertain, because if the absolute worst thing happens and
everything goes MadMax, it's the wealthiest who will have targets on their
backs--October Revolution.

See. I can sound like an A$$, too.

------
bitxbit
If he’s so vocal about the virus lockdown destroying lives, why was he never
vocal about wars? Wars literally destroy lives and economies. Total
destruction.

Gimme a break. He’s piping up because he bet on the Russell (which completely
went against him earlier this year) and those companies will get punished
disproportionately due to the lockdown.

There’s way too much emphasis on listening to financial figures when in fact
they are just as clueless if not more. Money does not equate to intelligence
and wisdom. Be wary of listening to people with a lot to lose.

By the way, his take on passive investing is only half right. There’s a reset
every quarter. The way to play it is to short single name volatility at
earnings.

~~~
laminarflow
Did you read the article? "He told Bloomberg News last month that he placed a
“significant bearish market bet that is working out for now,” without
providing details except to say it was a trade of a “good size” against
indexes."

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GaryNumanVevo
Those who control capital have decided that the human losses will largely be
seen in the working class, who they see as expendable. People will die if the
economy is re-opened, for them it's seen as an acceptable loss.

Look at the minority of people protesting the lock down, a large majority are
small business owners who want their employees to get back to work.

Corona virus has effectively been a government mandated strike for labor (save
"essential workers" at Amazon and the like) the likes of which the capitalist
class haven't yet seen.

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dna_polymerase
Is there any legitimate study regarding Chloroquine by now? Last thing I heard
was that it is useless. Michael Burry sounds like any other right winger by
now.

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transfire
If the entire world would just agree that EVERYONE must stay home for two
weeks at the same time, the whole thing would effectively be over and done
with.

In fact, I've been saying this for over a decade now... We should have a
global holiday every ten years doing exactly this, as it would seriously
decimate all contagious disease populations.

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KozmoNau7
It is particularly ghoulish to accept the death of millions of people, simply
because it would be better for the market.

Really, this financial crisis was brewing and on its way, coronavirus or not,
because we didn't take the lessons of the 2008 crash to heart. This pandemic
was simply the straw that broke the proverbial camel's back, but it is very
tempting for economists and politicians to place the blame squarely on this
scapegoat, so they can continue the cycle of booms and busts, which benefits
only those with enough capital to weather the risks and buy in at the bottom
of the curve.

If we want to break this destructive cycle, we need to rethink our approach to
economics and society:
[https://www.hup.harvard.edu/catalog.php?isbn=9780674980822](https://www.hup.harvard.edu/catalog.php?isbn=9780674980822)

~~~
drcode
Economic depressions kill people.

~~~
KozmoNau7
Then perhaps let's rethink economics into something more sustainable and not
plagued by booms and busts and rent-seekers.

As an added benefit, we can make human civilization less harmful to the
environment, by reducing our massive overconsumption and focus on
sustainability.

