Burry’s pretty big short hinges on treasuries sinking

Michael Burry, whose huge, wildly profitable bets against the housing bubble were made famous in “The Big Short,” is wagering that long-term US Treasuries will fall. His Scion Asset Management held $280 million of puts on the ishares 20+ Year Treasury Bond ETF at the end of June, according to a regulatory filing, an increase from $172 million three months earlier. The options contracts would make money if TLT, as the exchangetraded fund is known, falls as Treasury yields go up — something that hasn’t happened lately as fear of the delta variant drives investors into Treasuries. But ahead of the Fed’s annual Jackson Hole symposium, many still suspect the central bank will be able to start tapering bond purchases later this year, which could prove the bears right. Traders will be listening for hints from Chairman Jerome Powell on how much Covid’s resurgence is weighing on economic growth, and whether that sways when the Fed changes course. “Every aspect of the economic data we look at, from the labor markets to inflation, are all tending to look pretty healthy,” which should cause yields to rise over coming months, said Guneet Dhingra, head of US interest-rate strategy at Morgan Stanley.