Deeply Understanding Capital Knowledge

– The chart from Michael Burry, a renowned investor known for predicting the 2008 housing crash, shows S&P 500 capital expenditures minus depreciation as a percentage of U.S. GDP, highlighting periods of economic bubbles (e.g., Dot-Com, Housing) and a recent rise toward 2025, suggesting potential overinvestment or an AI-driven buildout, as noted in Mariner Wealth Advisors’ 2024 analysis of productivity growth tied to AI innovation.

– Historical data from Investopedia indicates that housing bubbles, like the 2007-2009 crash triggered by subprime lending and mortgage resets, led to a 19% price drop and over 2.8 million foreclosures annually, providing context for Burry’s warning that this single chart could “refute them all,” possibly challenging optimistic economic forecasts for late 2025.

– The “Three Yards and a Cloud of Dust” metaphor from Mariner’s 2024 report, inspired by a conservative football strategy, aligns with Burry’s cautious outlook, suggesting a low-risk but slow-growth economic scenario, while his cryptic “to be continued” hint on November 25th may signal an impending detailed critique based on emerging financial data.