Michael Burry Says This Is The Top — Is It?

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What's driving the Markets this week? What's on investors' minds as they look ahead?

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**Ed Elson** (1:56)
Welcome to Prof G Markets. I'm Ed Elson. It is August 6th. Let's check in on yesterday's market vitals.
The major indices were mixed after a series of highs, more on that in a second. Brent crude was relatively stable. Treasury yields were flat. And finally, Google shares fell nearly 4% on news that DeepMind's chief scientist is leaving and its CEO, Demis Hesabis, is stepping aside.
Okay, what's happening? The S&P 500 just hit another record. The fresh intraday high yesterday followed Tuesday's performance in which the index rose nearly 2% to its first record close since June. The Nasdaq also gained nearly 3% that day and the Dow crossed 54,000 for the first time. Across the markets, it seems as though investors have shaken off the AI anxieties that have defined much of the past month. But someone isn't buying it and that is Michael Burry. In a note on Tuesday, the investor who called the 2008 crash said he's sticking with his bets against NVIDIA and Micron and Tesla and Palantir and the Semiconductor index. He said, quote, I continue to believe it is possible we are near a major top, adding that we could see, quote, a 1987 Type 4 Now investors are left wondering who's right, the Bears or the Bulls? Here to discuss, we're speaking with Steve Eisman, the legendary big short investor and host of the Real Eisman Playbook. Steve, thank you for joining us on Prof G Markets. You are one of the other guys who called the 2008 crash, one of the other guys in that movie.

**Steve Eisman** (3:33)
Well, it will be on our tombstone. There's no question about it.

**Ed Elson** (3:37)
Exactly.
I mean, what do you make of this market right now? Because I thought we were all worried about AI, worried about the debt, worried about the reliance on a handful of AI labs. But we're sitting at record highs. So what is the market actually telling us right now?

**Steve Eisman** (3:55)
Number one, the US economy is very strong. All the banks reported mid-month in July and the credit statistics were as benign as they possibly could be. So there's no credit issues in the US economy overall. It's a strong M&A cycle, the IPO calendar is not bad, and there's no question there's still a K-shaped economy. But if you look at the numbers of Visa and MasterCard, the overall payment volumes are quite robust. We do see things like the K-shaped economy would be like in a company like Procter & Gamble who has no revenue growth. But that's not what's driving the economy. Right now, things are fine. Despite all the hysteria about AI is going to destroy every single job on planet Earth, the employment numbers are still very, very strong. I think that's why the market keeps going higher, because things are just okay. Now, I do think that the AI story has gotten a lot more complicated. If you and I were sitting here a year ago, you'd be hard pressed to find anyone who had anything negative to say. Maybe someone like Gary Marcus who has been on my show, but he's probably been on your show as well. I love Gary.
Gary has a lot to say and it's all great. But Gary was like the lone, July of last year, Gary Marcus was like the only person on planet Earth who had anything negative to say about AI. Now you have Ed Zitron as well. But if you compare this to 08, so Michael and I both had the same thesis, which was mortgage underwriting standards have deteriorated dramatically.