Like subprime CDOs and passive investing, this whole thing is way overblown, IHO.

It would be unfair to say that Michael Burry, like some other people, is a contrarian by principle. His weirdness, such as it is, comes from the principle that he’d like to be right about things, as he was about the subprime mortgage bubble, and this can certainly come off as contrarianism, like, for instance, when he says the only thing worth investing in is water, or that index funds are the new CDOs. Or when he starts sounding like Stephen Moore vis-à-vis coronavirus.

“Universal stay-at-home is the most devastating economic force in modern history,” Burry wrote in an email to Bloomberg News. “And it is man-made. 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.”

That’s a pretty big “if” there, Mike. If COVID-19 testing were universal, well, the SEC would have fewer penny stocks to halt trading in, among other things. Still, since, in addition to being a hedge fund legend and famous silver-screen weirdo, Burry is also an actual doctor, let’s hear him out on what we should have done and what other peoples we should be more like.

“I would lift stay-at-home orders except for known risk groups. We already know certain conditions that are predictive of severe disease. Especially since young healthy lungs tend to be resistant, I would let the virus circulate in the population that is not likely to get severe disease from it. This is the only path that comes close to balancing the needs of all groups. Vaccines are not coming anytime soon, so natural immunity is the only way out for now. Every day, every week in the current situation is ruining innumerable lives in a criminally unjust manner….”

“I believe Prime Minister Shinzo Abe is trying his best to manage through the situation without shuttering the economy. He sees what it has done to the U.S., and would rather not force a shut in, but instead asks for common sense. Japan has certain features — such as a largely lawful and well-educated society — that make this more possible. As do Taiwan, Singapore, Korea.”

Oh, and since Asians were also right about the whole face mask thing, maybe we should be emulating them and not, you know, assaulting and abusing them. Just a thought.

Michael Burry of ‘The Big Short’ Slams Virus Lockdowns in Tweetstorm [Bloomberg]