Week InReview: September 6, 2019

Michael Burry explains why index funds are like subprime CDOs

The hero of “The Big Short” has plenty to say about everything from central banks fueling distortions in credit markets to opportunities in small-cap value stocks and the “bubble” in passive investing. “Like most bubbles, the longer it goes on, the worse the crash will be,” he said. That means a lot, coming from someone who made his fortune and fame betting against CDOs before the crisis. One of his most provocative views: "The recent flood of money into index funds has parallels with the pre-2008 bubble in collateralized debt obligations, the complex securities that almost destroyed the global financial system."

— Bloomberg Future Finance

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