Trump's market maneuvers: burry warns of kryptonite
Michael Burry, the investor famous for predicting the housing market collapse chronicled in 'The Big Short', has slammed President Trump's handling of the Iran crisis, warning that the volatile market could spell trouble for the US economy.
Burry: trump's 'kryptonite' is the stock market
In a weekend post on Substack, Burry, who left his hedge fund to focus on writing, said Trump is now more focused on avoiding a market downturn than on the Iran conflict itself. 'It's a shame tens of thousands of Americans have died for this,' Burry wrote in response to news that the US was considering a gradual withdrawal from military action against Iran after destroying much of the country's missile capability and protecting US allies in the Middle East.
Burry believes the market is Trump's weak point, likening it to 'kryptonite'. 'And Iranian oil can sell again because the stock market fell,' he noted, pointing to reports that the US was allowing the sale of already-loaded Iranian petrochemical products to curb rising oil prices.
In a subsequent post, Burry wrote: 'Trump now issues an ultimatum on the Strait of Hormuz. He'd love to win this before the market opens. What has changed since Friday - when the war was essentially over - I'm not clear on.'
Since the S&P 500 surpassed 7,000 for the first time at the end of January, it has fallen around 6% to below 6,600 by Monday's close. Trump appears to be benefiting from the chaos in oil and gas markets sparked by the Iran conflict, which has disrupted flows through the key Strait of Hormuz and led to a 66% surge in Brent crude and nearly a 60% rise in West Texas Intermediate since the start of the year to around $100 and $90 per barrel respectively.
The sharp increase in gasoline prices has exacerbated the affordability crisis in the US heading into November's elections, and revived inflation fears that could prevent the Federal Reserve from cutting interest rates further. Trump campaigned on a promise to prioritize 'America First' and avoid getting the US entangled in prolonged conflicts like those in Iran and Afghanistan.