Burry expected the mortgage pools shorted by the Scion funds to see maximum stress during the latter half of 2007.
Unresolvable The public record could not settle it.
Prediction: Statements about events outside the person's control, checked once they fell due: did they come true?
The second judge would not resolve this claim; the verdict shown is the first judge's.
Said for an organisation they lead or work for; it counts on both records.
What would count as true or false
Test: did the subprime mortgage pools Scion had shorted (2005–2006 vintage subprime RMBS) come under their greatest stress in the second half of 2007? Measures of stress: delinquency or default rates, downgrades, and ABX index prices for those pools or that vintage. True: stress peaked in July–December 2007. Mostly true: stress peaked within a few months either side of that window (for example late Q2 2007 or early 2008) and was severe in H2 2007. Mixed: stress was severe in H2 2007, but measures disagree on when it peaked. Mostly false: stress peaked well after 2007, in mid-2008 or later, even if it was rising in H2 2007. False: the pools saw little stress in H2 2007.
Set before the research began.
Evidence (4)
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E1 [PDF] THE SUBPRIME CREDIT CRISIS AND CONTAGION IN FINANCIAL ... Francis A. Longstaff (UCLA Anderson School and NBER) · August 2008
“By mid 2007, however, the indexes began to decline precipitously.”
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E2 FRB: Annual Report 2007 Board of Governors of the Federal Reserve System · 18 July 2008
“| December 2007 | 1.14 | 2.29 | 7.80 | 22.64 | ND | ND |”
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E3 VI. Financial markets - BIS 78th Annual Report - June 2008 Bank for International Settlements · June 2008
“loss accumulation was still expected to continue well into 2009 (Graph VI.4, centre panel).”
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E4 The Panic of 2007 (NBER Working Paper 14358) National Bureau of Economic Research (author: Gary B. Gorton) · September 2008
“Subordinate tranches of the 06-2 and 07-1 series have lost over 75% of their value since the end of May.”
Reasoning
The evidence shows steep declines in subprime indexes from mid-2007 (E1, E4) and a BIS forecast that losses would keep accumulating into 2009 (E3). The quoted Federal Reserve row (E2) shows no trend, though, and no item shows when stress on these pools peaked, so the criteria cannot settle the claim.
Cite this claim
Michael Burry, “Burry expected the mortgage pools shorted by the Scion funds to see maximum stress during the latter half of 2007.” (said 2006). Verdict: unresolvable. Reliability API, claim c_c1456c71d16e, method 0.1.0+c876030c, dataset release v1.1.2. https://epistacklabs.com/claims/c_c1456c71d16e
This claim is in dataset release v1.1.2, with the same verdict.
Reply to this claim
More prediction claims by Michael Burry
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Mostly false
“All personal income taxes collected in a year do not so much as add up to $1 trillion dollars, and yet by 2020 interest expense on our national debt alone could exceed $1 trillion.”
US interest expense on the national debt alone could exceed $1 trillion by 2020.
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Resolved true
“Today, I expect the US government to attempt to continue easy money policies into the next presidential term”
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Mixed
“I imagine the shares of these companies, in most cases, will become very boring before they become attractive again.”
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Mostly true
“Less leverage and lower returns on assets are now in the cards.”
Less leverage and lower returns on assets are now likely for financial institutions.
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Resolved true
“The S&P 500 could easily finish the year in the negative, dragging many investment funds – too many of which are crowded into the same “value-but-for-a-dire-economy” trades – down with it.”
Verdicts are made automatically; how verdicts are made.