Michael Burry's prediction of a mortgage market meltdown was based on his research into the residential mortgage market and mortgage-backed securities.

True: Burry's dated investor letters or other documents from 2005–2007, or well-sourced accounts of them, show that his bet against mortgages rested on his own analysis of residential mortgage lending (loan types, underwriting, borrower credit) and of mortgage-backed securities or their prospectuses. Mostly true: that research was a main basis, but other major inputs, such as broad macro or housing-price views, played a comparable role. Mixed: the documents show mortgage and MBS research as only one of several roughly equal grounds. Mostly false: the documents show the prediction rested mainly on something else, with mortgage and MBS research playing only a minor part. False: the documents show he did no such research, or that the prediction had a different basis altogether.

Set before the research began.

1. E1 Betting on the Blind Side Vanity Fair · 1 March 2010

   “He analyzed the relative importance of the loan-to-value ratios of the home loans, of second liens on the homes, of the location of the homes”

2. E2 Betting on the Blind Side Vanity Fair · 1 March 2010

   “Burry spent the end of 2004 and early 2005 scanning hundreds and actually reading dozens of the prospectuses, certain he was the only one apart from the lawyers who drafted them to do so”

3. E3 Betting on the Blind Side Vanity Fair · 1 March 2010

   “The entire economy was premised on its stability, and its stability in turn depended on house prices continuing to rise.”

4. E4 Betting on the Blind Side Vanity Fair · 1 March 2010

   “You didn’t buy insurance on the entire subprime-mortgage-bond market but on a particular bond, and Burry had devoted himself to finding exactly the right ones to bet against.”

The Vanity Fair article 'Betting on the Blind Side' is an independent account. It says Burry analysed residential home-loan characteristics such as loan-to-value ratios, second liens and home location (E1). It also says that in late 2004 and early 2005 he scanned hundreds of mortgage-bond prospectuses and read dozens of them closely (E2), and that he chose the specific mortgage bonds to bet against (E4). The article also frames the stakes in broader terms, saying the economy depended on rising house prices (E3), but the evidence does not show that this view was a main basis of his bet. On this evidence the bet rested mainly on his own research into residential mortgages and mortgage-backed securities.