Michael Burry: checked claims

Scores by kind of claim

Each kind of claim is scored on its own, out of 100: the share that held up, with the range it likely falls in. Fewer resolved claims give a wider range.

Factual claims

Statements about the present or the past, checked against the record: did they hold up?

74 67 80

High confidence, 66 factual claims resolved. From 9 documents, 2001 to 2026; 14 documents sampled from 30 candidates found.

Not scored: 46 unresolvable, 40 checkable only against their own records.

See the factual claims
Predictions

Statements about events outside the person's control, checked once they fell due: did they come true?

62 43 81

Low confidence, 6 predictions resolved. From 2 documents, 2006 to 2011; 14 documents sampled from 30 candidates found.

Not scored: 20 unresolvable, 3 checkable only against their own records. 1 more fall due later.
Does not yet allow for how likely each prediction was when made.

See the predictions
Promises

Commitments to the person's or organisation's own future action, with something to deliver: was it delivered?

Insufficient record: 1 promise resolved, 5 needed for a score.

Not scored: 4 unresolvable, 2 not yet due, 2 checkable only against their own records.

See the promises

All types combined: 73 (likely 66 to 79, high confidence), from 72 claims: 66 factual claims, 6 predictions. It mixes kinds of claim in different proportions for different people, so compare people kind by kind.

Michael Burry's claims

191 claims · page 2 of 2

191 claims, sorted by newest said. Choose a claim to read it in full.
Verdict	Kind	Said	Claim	Topic
Mostly true	Factual	5 Apr 2011	Of the people at troubled major institutions and relevant government departments whose insight about the crisis matched or exceeded Burry's, none was in the top job. Factual · 5 Apr 2011	Economics and markets
Mostly false	Factual	5 Apr 2011	Wall Street firms all used one single risk model in the mid-2000s. Factual · 5 Apr 2011	Economics and markets
Resolved true	Factual	5 Apr 2011	Secretary Paulson now claims that even had he known what was going to happen, he could not have done anything about it. Factual · 5 Apr 2011	Economics and markets
Mostly false	Prediction	5 Apr 2011	US interest expense on the national debt alone could exceed $1 trillion by 2020. Prediction · 5 Apr 2011	Economics and markets
Unresolvable	Prediction	6 Apr 2010	Future generations of Americans will suffer terrible financial consequences from the bailouts and the extended bubble. Prediction · 6 Apr 2010	Economics and markets
Mixed	Factual	6 Apr 2010	After the crisis became clear in early 2007, the Fed chairman, Treasury secretary, president and senior members of Congress repeatedly underestimated its severity. Factual · 6 Apr 2010	Economics and markets
Resolved true	Factual	6 Apr 2010	Michael Burry deliberately avoided Lehman Brothers and Bear Stearns as swap counterparties. Factual · 6 Apr 2010	Their own work or organisation
Resolved true	Factual	6 Apr 2010	Michael Burry shut down Scion Capital in 2008. Factual · 6 Apr 2010	Their own work or organisation
Resolved true	Factual	6 Apr 2010	Michael Burry's prediction of a mortgage market meltdown was based on his research into the residential mortgage market and mortgage-backed securities. Factual · 6 Apr 2010	Their own work or organisation
Mostly true	Factual	6 Apr 2010	Michael Burry began worrying about the housing market in 2003, when lenders resurrected interest-only mortgages and loosened credit standards. Factual · 6 Apr 2010	Economics and markets
Unresolvable	Factual	6 Apr 2010	Scion's credit default swaps covered AIG, Fannie Mae and Freddie Mac, among other firms that failed or nearly failed. Factual · 6 Apr 2010	Their own work or organisation
Mixed	Factual	6 Apr 2010	By mid-2005 Michael Burry bought credit default swaps on billions of dollars of subprime mortgage-backed securities and bonds of financial companies. Factual · 6 Apr 2010	Their own work or organisation
Mostly true	Factual	6 Apr 2010	Goldman Sachs and other derivatives dealers did not demand daily collateral settlement from AAA-rated AIG. Factual · 6 Apr 2010	Economics and markets
Unresolvable	Factual	6 Apr 2010	Throughout 2004, interest-only mortgages were offered to more and more subprime borrowers with the weakest credit. Factual · 6 Apr 2010	Economics and markets
Unresolvable	Factual	6 Apr 2010	After studying regulatory filings on mortgage-backed securities, Michael Burry waited for lenders to offer the riskiest mortgages to the least qualified buyers. Factual · 6 Apr 2010	Their own work or organisation
Unresolvable	Factual	6 Apr 2010	Michael Burry said that, during the same period, he also watched ratings agencies vouch for subprime mortgage-backed securities. Factual · 6 Apr 2010	Economics and markets
Mostly true	Factual	6 Apr 2010	Michael Burry demanded daily collateral settlement on his swaps, with cash posted to Scion's account the next day if positions moved in its favor. Factual · 6 Apr 2010	Their own work or organisation
Unresolvable	Factual	6 Apr 2010	By early 2008 Michael Burry exited all remaining credit default positions by auctioning them to Wall Street banks seeking protection. Factual · 6 Apr 2010	Their own work or organisation
Unresolvable	Factual	6 Apr 2010	Burry exited his remaining credit default positions well before the government bailouts of the financial crisis. Factual · 6 Apr 2010	Their own work or organisation
Unresolvable	Factual	6 Apr 2010	During 2007, under pressure from investors, Michael Burry liquidated most of Scion's credit default swaps at a substantial profit. Factual · 6 Apr 2010	Their own work or organisation
Mostly true	Factual	6 Apr 2010	Michael Burry used six counterparties for his credit default swaps to limit exposure to any one of them. Factual · 6 Apr 2010	Their own work or organisation
Unresolvable	Factual	6 Apr 2010	In 2005 and 2006 Michael Burry argued in letters to Scion Capital clients that the mortgage market would melt down in the second half of 2007, badly damaging the economy. Factual · 6 Apr 2010	Their own work or organisation
Mostly true	Factual	6 Apr 2010	By December 2005, subprime mortgages issued six months earlier were already showing atypically high delinquency rates. Factual · 6 Apr 2010	Economics and markets
Own records only	Factual	2008	The Scion Funds' portfolio of credit default swaps on subordinated tranches of subprime mortgage securitizations has been reduced to an insignificant size, with only three contracts remaining. Factual · 2008	Their own work or organisation
Own records only	Factual	2008	Burry said he had recently found opportunity in a handful of severely battered South Korean securities, a Chinese media company and a global internet giant, and that such positions amounted to roughly one-third of the portfolio. Factual · 2008	Their own work or organisation
Own records only	Factual	2008	If the Funds' remaining credit shorts fell to zero value, Scion Qualified Value Fund would lose about 19% of its value and Scion Value Fund about 15%. Factual · 2008	Their own work or organisation
Mostly true	Prediction	2008	Less leverage and lower returns on assets are now likely for financial institutions. Prediction · 2008	Economics and markets
Own records only	Factual	2008	The Scion Funds are roughly one-fifth cash, held largely in foreign currencies. Factual · 2008	Their own work or organisation
Own records only	Prediction	2008	Burry said that, with only three such contracts remaining in force, he did not expect further meaningful impact on the Funds' portfolios from this sort of trade. Prediction · 2008	Their own work or organisation
Own records only	Promise	2008	Scion Capital is closing its dedicated Asian investment funds and returning capital to investors in those funds. Promise · 2008	Their own work or organisation
Mixed	Prediction	2008	Burry said he imagined that shares of most of these financial companies would become very boring before they became attractive again. Prediction · 2008	Economics and markets
Own records only	Factual	2008	The Scion Funds established direct commodity exposure through futures contracts during a recent commodity price pullback. Factual · 2008	Their own work or organisation
Resolved true	Prediction	2007	The S&P 500 could easily finish 2008 with a negative return, dragging down crowded value-oriented investment funds. Prediction · 2007	Economics and markets
Own records only	Factual	Nov 2006	The Scion funds do not participate in the cash residential mortgage-backed securities market. Factual · Nov 2006	Their own work or organisation
Own records only	Factual	Nov 2006	Variation in side pocket value comes from the Livedoor position being held in Japanese yen while the fund reports in dollars. Factual · Nov 2006	Their own work or organisation
Own records only	Factual	Nov 2006	On a notional basis, 41.6% of Scion's mortgage shorts are on BBB- tranches and 49.8% on BBB tranches. Factual · Nov 2006	Their own work or organisation
Own records only	Factual	Nov 2006	The Livedoor, Blue Ocean Re and Symetra side pockets are all carried at cost. Factual · Nov 2006	Their own work or organisation
Resolved true	Factual	Nov 2006	Servicers may generally advance interest payments to a mortgage pool when a mortgage goes delinquent. Factual · Nov 2006	Economics and markets
Own records only	Factual	5 Oct 2006	During March–September 2005, Burry found most mortgage pools and their subordinate tranches totally unworthy as short candidates. Factual · 5 Oct 2006	Economics and markets
Own records only	Factual	5 Oct 2006	Through September 2006 the Scion portfolio was down for the year, and its performance was solely due to its credit default swap positions. Factual · 5 Oct 2006	Their own work or organisation
Own records only	Factual	5 Oct 2006	Burry attempts, within reason, to keep the Scion Value Fund and Scion Qualified Value Fund pari passu in portfolio composition. Factual · 5 Oct 2006	Their own work or organisation
Own records only	Factual	Oct 2006	At the end of October 2006, single name corporate CDS were 3.27% of assets under management in the Scion Value Fund and 3.55% in the Scion Qualified Value Fund. Factual · Oct 2006	Their own work or organisation
Own records only	Factual	2006	Burry stated that Scion Capital negotiated very favorable ISDA agreements with all eight of its credit derivatives counterparties. Factual · 2006	Their own work or organisation
Own records only	Factual	2006	The Scion funds carry credit default swaps on subprime mortgage-backed securities with $1.687 billion in notional value. Factual · 2006	Their own work or organisation
Unresolvable	Factual	2006	Most mortgages underlying the tranches Scion is short have not yet reached their interest rate reset, the period of highest risk. Factual · 2006	Economics and markets
Mostly true	Prediction	2006	Rising delinquencies and defaults will continue to push delinquency-to-credit-support ratios higher on the subprime tranches Scion is short. Prediction · 2006	Economics and markets
Own records only	Factual	2006	Burry spends nearly all his time on stocks and other long-oriented analysis rather than shorts. Factual · 2006	Their own work or organisation
Unresolvable	Factual	2006	The M9 tranche of the PPSI deal is just under $6 million, less than 1% of the original deal size. Factual · 2006	Economics and markets
Resolved true	Factual	2006	Park Place Securities Incorporated (PPSI) is the depositor in the PPSI 2005-WLL1 mortgage deal. Factual · 2006	Economics and markets
Mixed	Factual	2006	Because home prices rose steadily for a long time, troubled homeowners were able to refinance, take cash out and often reduce monthly payments at the same time, which reduced foreclosure rates. Factual · 2006	Economics and markets
Own records only	Prediction	2006	Burry expected that, in the worst case, his fund's mortgage short would fully amortize to nil value over the next three years, at an average annual cost of carry of roughly six percent of current assets under management. Prediction · 2006	Their own work or organisation
Own records only	Factual	2006	The Funds held quite a bit of cash in 2006, something that last occurred in the 2001-2002 era. Factual · 2006	Their own work or organisation
Unresolvable	Prediction	2006	Burry expected the mortgage pools shorted by the Scion funds to see maximum stress during the latter half of 2007. Prediction · 2006	Economics and markets
Own records only	Factual	2006	The Scion Funds have roughly a 12% allocation in Asia, lower than in the past. Factual · 2006	Their own work or organisation
Own records only	Factual	2006	Burry never expected Scion's mortgage short to pay off within one year. Factual · 2006	Their own work or organisation
Unresolvable	Prediction	2006	Most of the subprime mortgage pools Scion shorted will likely see maximum foreclosures a little over two years into the life of the pool. Prediction · 2006	Economics and markets
Own records only	Factual	2006	The Scion Funds hold roughly $2 million in put options focused on the Russell 2000 Index. Factual · 2006	Their own work or organisation
Unresolvable	Factual	2006	Loss severities on foreclosed subprime mortgages rose during 2006 from 10-15% at the start of the year to 30-45% recently. Factual · 2006	Economics and markets
Mostly true	Factual	2006	Burry said the positions "we" are short are now effectively undercollateralized by performing mortgages, pointing to ratios of delinquent, bankrupt, foreclosed and REO loans to total credit support, several of which were above one. Factual · 2006	Economics and markets
Mostly true	Factual	2006	In a securitization, each trust is divided into tranches, each defined and rated by the degree of subordination protecting its principal from loss. Factual · 2006	Economics and markets
Unresolvable	Prediction	2006	The fall in US national housing prices in 2006 will not be a one-year blip; prices will keep falling beyond 2006. Prediction · 2006	Economics and markets
Unresolvable	Factual	Apr 2005	As far back as April 2005, Burry theorized in emails to his staff that a run on AIG would appear as collateral calls following a ratings downgrade. Factual · Apr 2005	Economics and markets
Unresolvable	Factual	2004	By fall 2004 Countrywide Financial reported subprime mortgage originations up 158% year over year despite a 24% decline in overall originations, as Burry noted to investors. Factual · 2004	Economics and markets
Own records only	Factual	2004	Since earlier in 2004, the Scion Funds have held long equity and distressed debt investments, domestic and foreign, positioned to benefit from higher oil prices. Factual · 2004	Their own work or organisation
Unresolvable	Factual	6 Jan 2002	A stock held by the Fund tripled off its lows around the end of the quarter ending September 30, 2001, by late October 2001. Factual · 6 Jan 2002	Their own work or organisation
Own records only	Factual	2002	The Scion Value Fund had about $27 million in capital, and its minimum initial investment for new investors was raised to $500,000. Factual · 2002	Their own work or organisation
Own records only	Factual	2002	During the vast majority of 2001, the Scion Value Fund held no short positions at all. Factual · 2002	Their own work or organisation
Own records only	Factual	2002	The Scion Value Fund's cash position, around 40% for most of Q4 2001, kept it from fully participating in the general price rise across most stock categories. Factual · 2002	Their own work or organisation
Unresolvable	Prediction	2002	Burry said that, absent a new asset bubble, 2001-era US common stock valuations appeared to promise future returns well below those still expected by the investing public. Prediction · 2002	Economics and markets
Own records only	Factual	2002	Michael Burry invested the majority of his 2001 income back into the Scion Value Fund for a January 1 start. Factual · 2002	Their own work or organisation
Resolved true	Factual	3 Jul 2001	The Scion Value Fund does not generally offer portfolio transparency to its members. Factual · 3 Jul 2001	Their own work or organisation
Unresolvable	Prediction	3 Jul 2001	The Scion Value Fund will generally fall less than the market in a bear market. Prediction · 3 Jul 2001	Their own work or organisation
Own records only	Factual	2001	Burry is a tax-paying US citizen. Factual · 2001	Their own work or organisation
Own records only	Factual	2001	Burry personally had over $1 million invested in Scion Value Fund when writing the 2000 annual letter. Factual · 2001	Their own work or organisation
Mixed	Factual	2001	The cost of employee stock option compensation is borne by shareholders through significant dilution. Factual · 2001	Economics and markets
Mostly true	Factual	2001	Burry earns no income from Scion Capital unless members' annual return exceeds 6% net of expenses. Factual · 2001	Their own work or organisation
Unresolvable	Factual	2001	As of the first quarter 2001 letter, Burry's Scion Capital fund was biased toward smaller capitalization stocks. Factual · 2001	Their own work or organisation
Own records only	Factual	2001	The vast majority of Burry's net worth, aside from money for modest living expenses, is invested in the Scion Value Fund. Factual · 2001	Their own work or organisation
Own records only	Factual	2001	The Scion Value Fund fell in Q3 2001 because several key stocks Burry chose declined in price. Factual · 2001	Their own work or organisation
Delivered on time	Promise	2001	The Scion Value Fund's minimum initial investment for future investors will be raised to $250,000 as of the July 1, 2001 investment date. Promise · 2001	Their own work or organisation
Unresolvable	Prediction	2001	Burry said he fully expected the Scion Value Fund's expense ratio for members to decrease quite significantly as assets under management grew with new investors. Prediction · 2001	Their own work or organisation
Own records only	Factual	2001	Burry keeps a list of about eighty stocks representing businesses with decent, predictable long-term characteristics. Factual · 2001	Their own work or organisation
Unresolvable	Prediction	2001	The Fund will receive full value in the future for its shares in its largest hotel holding. Prediction · 2001	Their own work or organisation
Unresolvable	Factual	2001	Burry told the room of potential clients that portfolio concentration and illiquidity do not define risk. Factual · 2001	Their own work or organisation
Unresolvable	Factual	2001	Burry told a room of about 200 wealthy potential clients that risk is defined by ill-conceived investment, not by volatility. Factual · 2001	Their own work or organisation
Own records only	Factual	2001	Burry holds no personal securities account apart from his investment in Scion Value Fund, and his professional focus is solely that fund. Factual · 2001	Their own work or organisation
Unresolvable	Prediction	2001	Burry's investment principles, applied consistently, will continue to serve the Fund well despite future shocks. Prediction · 2001	Their own work or organisation
Unresolvable	Prediction	2001	A rarely traded publicly traded real estate stock held by the Fund will recover and ultimately head much higher over time. Prediction · 2001	Their own work or organisation
Unresolvable	Prediction	2001	The future performance of one of the Fund's largest positions will have no correlation with the general market or further terrorist attacks. Prediction · 2001	Their own work or organisation
Own records only	Factual	2001	Because the Scion Value Fund added to several decliners, it was more valuable at the time of the letter than one quarter earlier. Factual · 2001	Their own work or organisation
Unresolvable	Prediction	2001	Over the next year or two, and especially five years, the Fund's investment in this position has a very high probability of producing substantial gains. Prediction · 2001	Their own work or organisation

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Michael Burry

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Factual Economics and markets

“Generally, servicers may advance interest payments to the pool when a mortgage goes delinquent.”

Michael Burry, Scion fund manager November 2006 Scion Funds annual letters compilation (investorkurs.no)

Servicers may generally advance interest payments to a mortgage pool when a mortgage goes delinquent.

Resolved true The record shows it happened or was so.

Said for an organisation they lead or work for; it counts on both records.

What would count as true or false

Judge as of 2006-11. True: standard private-label RMBS/securitization pooling and servicing agreements and industry descriptions from that era show servicers generally may (or must, subject to recoverability) advance delinquent principal and interest to the trust/pool. Mostly true: the practice is standard but usually covers principal and interest together, or is framed as an obligation limited by recoverability rather than discretionary 'may'. Mixed: advancing was common in some segments but not generally. Mostly false: advancing was rare or exceptional. False: servicers generally did not or could not advance delinquent interest to pools.

Evidence

m433_ABSC OOMC 2006-HE3 PSA - SEC.gov U.S. Securities and Exchange Commission (EDGAR filing by Asset Backed Securities Corporation) · 5 February 2006
“The obligation of the Servicer to make such P&I Advances is mandatory, notwithstanding any other provision of this Agreement but subject to Section 4.03(d) below”
HEAT 2006-4 Pooling and Servicing (PSA) Agreement U.S. Securities and Exchange Commission (EDGAR filing by Credit Suisse First Boston Mortgage Securities Corp.) · 15 May 2006
“Each Servicer shall deposit in the related Collection Account at the time described below an amount equal to with respect to the Mortgage Loans, all Scheduled Payments (with interest at the Mortgage Rate less the Servicing Fee Rate) which were due on the related Mortgage Loans during the applicable Collection Period”
Prospectus Supplement U.S. Securities and Exchange Commission (EDGAR filing by J.P. Morgan Acceptance Corporation I) · 26 October 2006
“Under the pooling agreement, the servicer will generally make cash advances to cover delinquent payments of principal and interest to the extent it reasonably believes that the cash advances are recoverable from future payments or recoveries on the mortgage loans.”
www.sec.gov › 000116231806000988 › csmc20066psaCSMC 2006-6 PSA - SEC.gov U.S. Securities and Exchange Commission (EDGAR filing by Credit Suisse First Boston Mortgage Securities Corp.) · 14 July 2006
“With respect to the Non-Designated Mortgage Loans, each Servicer shall deposit in the related Collection Account as Advances, an amount equal to all Scheduled Payments (with interest at the Mortgage Rate less the related Servicing Fee Rate) which were due on such Non-Designated Mortgage Loans serviced by it during the applicable Collection Period”

Reasoning

Several 2006 SEC-filed pooling and servicing agreements say servicers advance delinquent scheduled payments to the trust. E1 says the servicer's principal-and-interest (P&I) advance obligation is "mandatory", subject to a carve-out. E2 requires servicers to deposit scheduled payments with interest into the collection account, and E4 requires such deposits as Advances. E3, a prospectus from October 2006, states that the servicer "will generally make cash advances to cover delinquent payments of principal and interest" to the extent it believes they are recoverable. This matches the criteria's definition of true: servicers generally may, or must subject to recoverability, advance delinquent principal and interest to the pool.

Cite this claim

Michael Burry, “Servicers may generally advance interest payments to a mortgage pool when a mortgage goes delinquent.” (said November 2006). Verdict: resolved true. Reliability API, claim c_db6f8a69958d, method 0.1.0+c876030c. https://epistacklabs.com/claims/c_db6f8a69958d

Claims without a verdict

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