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Roland Staton
Jun 29, 2022 1:35PM ET
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Michael Burry Warns of the Bullwhip Effect, Says the Fed Could Reverse Course
Published Jun 27, 2022 07:03AM ET
Updated Jun 27, 2022 11:09AM ET
© Reuters. Michael Burry Warns of the Bullwhip Effect, Says the Fed Could Reverse Course
By Sam Boughedda
Michael Burry, the investor made famous by the movie "The Big Short," and the founder of Scion Asset Management, said in a tweet Monday that the "Bullwhip Effect" is happening in the retail sector.
Burry added that this could lead to the Federal Reserve reversing its rate rises and its Quantitative Tightening policy.
The Tweet reads:
"This supply glut at retail is the Bullwhip Effect. Google it. Worth understanding for your investing endeavors. Deflationary pulses from this- -> disinflation in CPI later this year --> Fed reverses itself on rates and QT --> Cycles."
The tweet also links to an article from CNN, which states retailers are considering allowing customers to keep items they return so they don't have to take them back and add them to swelling inventories.
It's not the first time in recent months that Burry has raised concerns about the economy. In May, he tweeted that the current market conditions are "like watching a plane crash."
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Comments (6)
Terry Langley
Jun 28, 2022 5:56PM ET
yeah......retailers going to start giving stuff away cause it costs to hold. coming down on prices and still make a profit is going to be very hard. people also having to deal with high rent,food, and transportation costs. they will cut demand on things not needed making it even harder.
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Japan Scenario
Jun 27, 2022 12:33PM ET
You heard the man. Time to go LONG. The road to 7k starts now
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John Avenetti
Jun 27, 2022 12:33PM ET
keep dreaming
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First Last
Jun 27, 2022 11:46AM ET
Fundstrat’s Tom Lee: “Increasingly it appears that markets mistook the ‘bullwhip’ effect on the supply chain (including food) for secular inflation.”
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Anil Kumar
Jun 27, 2022 11:32AM ET
One time right doesnt mean all time right. But mr bury got it right when predicted June 17 crash
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Samer Diab
Jun 27, 2022 11:27AM ET
the problem is people will remember burry for getting it right in 2008 when he got it many times wrong thereafter
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