Fun

Michael Burry Compares Current Banking Turmoil to Panic of 1907 — Highlights Markets Bottoming

News Feed - 2023-03-16 07:03:17

Michael Burry Compares Current Banking Turmoil to Panic of 1907 — Highlights Markets Bottoming


Michael Burry, a hedge fund manager renowned for predicting the 2008 financial crisis, has drawn parallels between the current banking turmoil and the Panic of 1907. He noted that three weeks after J.P. Morgan made a stand, the panic was resolved and the markets bottomed. “A stand was made this past weekend,” the famous investor pointed out. Michael Burry on Bank Failures, Panic of 1907, Markets Bottoming


Famous investor and founder of investment firm Scion Asset Management, Michael Burry, has compared the current financial turmoil, following the collapse of multiple banks, to the Panic of 1907. Burry is best known for being the first investor to foresee and profit from the U.S. subprime mortgage crisis that occurred between 2007 and 2010. He is profiled in “The Big Short,” a book by Michael Lewis about the mortgage crisis, which was made into a movie starring Christian Bale.


The “Big Short” investor tweeted Wednesday: In October 1907, Knickerbocker Trust failed due to risky bets, sparking a panic. Two others soon failed, and it spread. When a run began on a healthy Trust, J.P. Morgan made a stand. 3 weeks later the panic resolved & markets bottomed. A stand was made this past weekend.


Knickerbocker Trust Company was one of the largest trust companies in the U.S. Its failure in October 1907 triggered a financial panic and led to a loss of confidence in the entire banking system.


The panic came to an end after J.P. Morgan organized a bailout of several large banks and convinced other financiers to do the same. The bailout helped restore confidence in the banking system. The Federal Reserve System was subsequently created on Dec. 23, 1913.


Burry’s tweet came after several major banks in the U.S. failed, including Silicon Valley Bank and Signature Bank. The former was closed down by regulators last Friday and the latter by the New York State Department of Financial Services a couple of days later.


To stop bank runs and restore confidence in the banking system, the Treasury Department, the Federal Reserve Board, and the Federal Deposit Insurance Corporation (FDIC) announced measures to allow depositors of both banks to “have access to all of their money.” Moreover, the Federal Reserve Board said it will “make available additional funding to eligible depository institutions to help assure banks have the ability to meet the needs of all their depositors.”


While some people on social media agreed with Burry, several pointed out that the Federal Reserve System did not exist in 1907 so the current situation is different.


In a different tweet, Burry wrote: “This crisis could resolve very quickly. I am not seeing true danger here.” Regarding the U.S. economy, Burry previously warned of another inflation spike and extended multi-year recession in the U.S. Tags in this story big short investor, michael burry, Michael Burry 1907, Michael Burry banking crisis, Michael Burry banking turmoil, Michael Burry financial crisis, Michael Burry financial turmoil, Michael Burry JPMorgan, Panic of 1907


What do you think about Michael Burry’s comparison between the Panic of 1907 and the current banking turmoil? Let us know in the comments section below. Kevin Helms


A student of Austrian Economics, Kevin found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open-source systems, network effects and the intersection between economics and cryptography. Billionaire "Bond King" Jeffrey Gundlach Expects Fed to Raise Rates Next Week — "That Would Be the Last Increase" ECONOMICS | 1 day ago Goldman Sachs Now Expects No Rate Hike in March Due to Stress in US Banking System ECONOMICS | 2 days ago


Image Credits: Shutterstock, Pixabay, Wiki Commons Previous articleUK Treasury Budget Discusses Separate Reporting of Crypto Assets in Tax Documents Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article. Read disclaimerShow comments More Popular NewsIn Case You Missed ItRipple CEO: SEC Lawsuit Over XRP "Has Gone Exceedingly Well"


The CEO of Ripple Labs says that the lawsuit brought by the U.S. Securities and Exchange Commission (SEC) against him and his company over XRP "has gone exceedingly well." He stressed: "This case is important, not just for Ripple, it’s ... read more.UAE Airliner Emirates to Launch NFTs and Experiences in the Metaverse Privacy-Centric Monero Plans for July Hard Fork, Plans Include Ring Signature, Bulletproof Upgrade Interest in Real Estate Investments in Spain Grew 400%, With Some Using Crypto and Stocks as Payment Method Microbt Reveals Latest Bitcoin Mining Rigs — Machines Produce up to 126 TH/s With Custom 5nm Chip Design

News Feed

Davos 2023: Banking Panel Reinforces the Need for Crypto Regulation
Davos 2023: Banking Panel Reinforces the Need for Crypto Regulation A group of global banking experts hosted by the World Economic Forum (WEF) convened about the need for global cr
Victoria Kennedy10 hours agoAI tech boom: Is the artificial intelligence market already saturated?The AI sector has seen rapid investment over the last two years, but does that mean the market is overheated?926 Total vie
Brian Quarmby6 hours agoBase surges past Solana as total value locked nears $400MAs per DefiLlama data, Solana’s TVL has decreased by 9.64% over the past month to sit at $358.96 million, while Base’s TVL has surged t
Bitcoin Miner Marathon Agrees to Deal That Cuts Electricity Costs by 38% With US Power Company
Bitcoin Miner Marathon Agrees to Deal That Cuts Electricity Costs by 38% With US Power Company Nasdaq-listed Marathon Patent Group has agreed to a joint venture
XRP Price Marks $2.13 And $2.92 As Primary Fibonacci Levels, What Happens When Wave 2 Begins?
Este artículo también está disponible en español. Technical analysis of the XRP price has revealed the creation of corrective waves in light of the recent correction sinc
The Cyclicality Of Bitcoin: What The Cyclical Crests Say About A BTC Top
Reason to trust Strict editorial policy that focuses on accuracy, relevance, and impartiality Created by industry experts and meticulously reviewed The highest standards in reporting and pu
XIDEN Blockchain Developer CryptoDATA Tech Announced as Official Title Sponsor of the MotoGP™ Austrian GP
XIDEN Blockchain Developer CryptoDATA Tech Announced as Official Title Sponsor of the MotoGP™ Austrian GP press release PRESS RELEASE.CryptoDATA Tech was announced as the title sp
Tom Mitchelhill5 hours agoApple’s headset could redefine what being in the metaverse meansKPMG"s Head of Metaverse Alyse Sue believes the tech included in Apple’s mixed reality headset could shift the way users inter
EU Lawmakers Back Regulation Threatening Unhosted Crypto Wallets, Defi Space
EU Lawmakers Back Regulation Threatening Unhosted Crypto Wallets, Defi Space Members of the European Parliament have approved a controversial regulation that could undermine the de
Turner Wright7 hours agoBinance Japan begins launching trading services for residentsThe Japan-based crypto exchange said it was offering spot trading for 34 tokens as of Aug. 1, with plans to migrate global Binance user
Biggest Movers: DOGE, SHIB Near 10-Day Highs, Following Recent Surges in Price
Biggest Movers: DOGE, SHIB Near 10-Day Highs, Following Recent Surges in Price SHIB was trading almost 15% higher during today’s session, as its price approached a ten-day h
Thailand launches regulatory sandbox to test crypto services
Helen Partz11 hours agoThailand launches regulatory sandbox to test crypto servicesThailand has been moving toward a more crypto-friendly stance throughout 2024, approving a Bitcoin ETF, initiating tax breaks for crypto