The Big Short's Steve Eisman doubles down on Canadian bank short call

Steve Eisman, portfolio manager at Neuberger Berman. joins BNN Bloomberg to weigh in on the performance of Canada's banks in the second quarter. Eisman says that he's been adding to his Canadian bank short positions.
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[@amineaiffa]

She's a fantastic interviewer. Knows when to let the guest speak, and respectfully pushes for a clear response when necessary. Great work!

[@mr.anderson9938]

Not just eye candy , nice!

[@Macatho]

@Anonymous In all honesty. I can't take women seriously that wear that much makeup. When the mascara clumps you know you've overdone it.

[@denmarkfidelio2962]

She is BY-FAR the BEST INTERVIEWER amongst ALL. GREAT JOB!!!!

[@Optionfinity]

Agreed. It's nice to see someone do their homework and ask educated questions.

[@windycitybeats6724]

Exactly, and to see someone who doesn't attack the speaker or cut off their speaking is great!

[@vester2196]

"ZERO!"

[@stephenburnage7687]

Good interviewer. Its not easy to interview someone like Steve Eisman and she did so very well.

[@mattius459]

"The hardest thing in the world is to have lived through a certain kind of paradigm for a very very long period of time and then to realize that that paradigm is changing."

[@amoosavi]

Gold

[@ThePorschefan]

I wish she interviewed Ray Dalio instead of CNBC and Eric from Bloomberg U.S.

[@gambotage]

Ray Dalio’s interviews are sick

[@thinkabout288]

Excellent questioning

[@jonathankr]

He seems very honest. Then there was a moment he realized he gave too much info. The banks are now listening to him...

[@nohopeequalsnofear3242]

He seems a bit stressed. Shorting anything would stress me out.

[@Ethan-xc1fe]

@Emmerich August he try's to convince banks because he doesn't want regular people to pay for their fuck ups, he shorts the position because he knows they wont listen.

[@jamesgroomes1812]

@@Ethan-xc1fe cheers

[@omana6977]

and here we are at the future ande he was right 2 decades in a row

[@jakebest5601]

hes actually a genius cuz a name like that saying the banks where performing badly would have effects on market confidence and the higher the chance of his short paying off

[@aadityasaple]

Just realized that Eugene Mirmam would have matched Eisman more than Steve Carrell did. :)

[@joebaby555]

The best financial interviewer.

[@dr_IkjyotSinghKohli]

"Canadian Bank Managers were incredibly dismissive." Not surprised.

[@magig160]

Bravo Steve Eisman for that call

[@robertdmci]

Bad time is coming to Canadian Economy, systemic risk and credit risk are getting a lot higher. BoC get ready to cut interest rates.

[@geekonomist]

robertdmci a cut in interest rates would very naturally drain banks of capital. Furthermore, this would only encourage risk takers who have been sidelined by an already low interest rate. This would only exacerbate the capital reserves ratio and the likelihood of future impairment if loans, all at once.

[@robertdmci]

To those may have objection to a rate cut, please read the numbers and interpret some statistics. BoC has to cut rate to avoid a recession, GDP growth is at 1% and the whole Canadian ecosystem is a mess, globally is not good as well. A hard landing and recession vs. Kicking can down the road

[@YYLegend]

maple leafs have been a solid hockey team in recent years.

[@rbf100]

He has gotten his head handed to him so far largely because Canadian banks are an oligopoly. If he shorts without options he must cover large dividend payments every quarter. However he is right about deteriorating credit and also loans to a bubble real estate sector.

[@justjacqueline2004]

Talk about coy!She really wanted to nail him down and he danced a good dance.

[@russburton6262]

cause he is smarter than her

[@bosoerjadi2838]

What happened end of Aug 2019? Most Canadian bank stocks went straight up since then. Why?

[@hochimin4819]

because i´s a bubble, Titanic when is dropping, one part of ship is rising from water

[@IakonaWayne]

Long segment, does this happen in the US ?

[@Dear_Mr._Isaiah_Deringer]

No *BNN* Bloomberg is strictly Canadian.

[@mauriciohermoza-suarez5166]

great interviewer so professional.

[@batrarohit1]

Wonder how this is going to hold up now during the pandemic

[@MrRoundwound]

What an exemplary Interviewer.

[@Scottieguru]

The Canadian banks have a get out of jail free card; i.e. The Canadian taxpayer. Too Big to Fail!!

[@Newscannet]

The base numbers are small so the yoy increases seem large, but because the numbers are quite small nominally, it's not a big deal. He's betting on a general trend. Good interview.

[@jamesgroomes1812]

appreciate the interview

[@JamiePittsSCM]

I loved the interview, though this is a misleading title. I am a subscriber to his newsletter. He added 1-2% to his short positions, and there are much more certain shorts than Canadian banks.

[@omarc606]

Announcing your short position publicly may reinforce it. He’s trying to pull the strings for profit

[@yannchevrier-foundy5063]

She is soooo good, I hope she's getting paid well.

[@derekbueckert5157]

Does this mean interest rates on Canadian mortgages will rise?

[@TheRetiredVeteran]

Does he still have his short position?

[@briancota4544]

My understanding is that regulators prevent bank management to “cookie jar” earnings which is why this predicament exists.

[@Raison_d-etre]

CIBC did drop further but has recovered. LB also dropped but recovered those further drops only.

[@jeremynorth102]

Not sure I'd still be in the game if I was Steve Eisman, considering his 8 or 9 figure pay day in the wake of the housing crisis.

[@gregpeer]

He's playing a different game.

[@jeremynorth102]

He's still in the market, still risking investment capital. The sector he's focused on has changed but the MO hasn't. And considering his eye watering net worth, many would be out, living the good life.

[@windycitybeats6724]

@@jeremynorth102 No matter how rich you are, trust me, your always gonna want something to do. This is probably all he knows, theres only so much golf you can play haha

[@jeremynorth102]

Yep, but with limitless options, and a finite lifespan, shorting Canadian banks doesn't sound like the ultimate reason to get out of bed each day.

[@gregpeer]

@@jeremynorth102 it's about winning. The money is just the unit of measure at that point for how right or wrong you were.

[@windycitybeats6724]

Listen to what he says after the question at 10:18, bad times coming!

[@robertlees6943]

"Credit Cycle" sounds like fun...

[@remlatzargonix1329]

Robert Lees ...yes, but can you pedal backwards?

[@Dear_Mr._Isaiah_Deringer]

Credit _cycle_ equivalent to business _cycle_ is the behind the hand admittance of 80s Reaganites that there is a Keynesian _cycle._

[@audaxvid]

Lol I’m curious what his thoughts are now.

[@bdp59]

Thanks Steve Eisman. Your shorts have created a great opportunity. It's going to be a sweet day when you start having to buy back in hurry. Thank you for the gift we are about to receive!

[@Discoworx]

You were saying???

[@m.morininvestor9920]

Could it affect the price of the real estate in Canada ?

[@D4PPZ456]

If I understood correctly (I probably didn't), loans for businesses are beginning to default at higher rates than their previous quarters. This means that there will eventually be an increase on impaired loans for homeowners that can no longer afford their mortgages, meaning that there will be less ability to acquire a mortgage, again meaning that the price of homes will probably go down. He's saying that it won't be catastrophic, so there is a good chance you will still be able to get a mortgage while the costs are lower, but they won't be significantly lower as this isnt a crash.

[@geekonomist]

Why not discuss an increase an interest rate in Canada, in order to show up reserves?

[@Rawdiswar]

Please elaborate.

[@geekonomist]

How did banks once raise capital? By promising a higher rate of interest than all other risk free alternatives. When reserves are low, the way forward is to raise interest rates, attract capital, finance good ideas, cut bait on bad ones, and see what happens thereafter. The only reason to lower interest rates is when one has too many reserves, and wishes to have money circulate.

[@UnderdogWarrior]

People would lose their shirts

[@UnderdogWarrior]

Pretty much most people that bought their first home in the past 2 years are fucked.

[@KP-dd2ci]

Eisman, a shade or two less awkward than Michael Burry

[@DanteSpinotti1]

Eisman was Mark Baum (Steve Carrell)

[@KP-dd2ci]

@@DanteSpinotti1 Yeah...would take a certain type to work with or for both those guys in real life.

[@MarketManiaCA]

I'm guessing he covered in 2020 either at a loss in January or huge gain in February.

[@addicted2crypto64]

I wouldn’t short Canadian banks just yet. Interest rates are coming down and more money will be injected into the system to prop it up for another 6 to 12 months

[@cryptosirhc1567]

Steve. You must be shorting AUD banks big time!

[@michealbay1290]

Why's that? While the fundies are low, I don't think it's that bad

[@Discoworx]

Crypto, you short an Aussie bank?

[@jamesmcmullen3283]

So... will this have an effect on mortgage interest rates going up or down?

[@stephenburnage7687]

Down. A long way down.

[@ThePorschefan]

Down, but first they need to restructure the bad loans and let some small defaults and then cut interest rates so debt is more affortable and incentives spending. if you ask because you're interested in getting a mortgage, I think rates will go down in 1 year, maybe 18 months

[@samuweljon4001]

@@ThePorschefan what about house prices in toronto?? any predictions pls

[@dustinconner9157]

@@ThePorschefan Possibly, maybe a little sooner.

[@ThePorschefan]

@@samuweljon4001 By the end of the year you should see prices going down such as in Vancouver during June

[@theavitaravitar1884]

so far housing prices are up and the Canadian banks are strong. There still is the TD Boston Garden. lol

[@TheNimRC]

What's her name? She did a great work.

[@hks6274]

Catherine Murray

[@AdnanAli-fg5sh]

He’s 100% dead on. Hindsight 20/20

[@suckmycockyoutube]

he is not

[@AdnanAli-fg5sh]

@@suckmycockyoutube can you please provide proof. Most Canadian banks reported steep profit declines in the past two quarters once they were forced to provision for loan losses.

[@alphabravo3566]

Damn..

[@lilpackerboy]

This woman is a top-notch professional 👌

[@russburton6262]

i will be watching closely

[@xx3868]

These sort of guys are different to "usual" people. They read data without emotions and simply see the result- like science does. No bias, no "scriptures" to affect the mind. He was one of a few that saw the housing crash in 2008 that others didnt care or believe that could happen. Now he sees the extreme Canadian issues and i noticed their housing is really expensive too as is here in Aust. So when all these guys say things are on the turn soon, TAKE notice. Prepare yourself as i did nearly a year ago to not be exposed and use a rule of thumb that a crash will halve any assets you have and best to think the WORST as any good investor (and me!) will tell you. Making money is easy in many ways BUT protecting it when things reverse is hard as when will that be ? how can you be sure? All you can do is realise when a cycle is ended and THEN consider the worse as we have seen over and over again. 13 years since start of GFC, thats along time between crashes so its COMING and tipped to be maybe 3x as bad as the last GFC?? Be Warned!!

[@geraldbrowne]

Spring 2024 - Steve appears to be correct . Can banks are going to have severe credit impairments

[@Tomyum19]

What are you talking about? They’re doing fine. RBC and CIBC are rockin.

[@sambomambojambotango3961]

Damn, those fake eyelashes are long!!

[@___JJ]

looks like mtv presenter

[@tommyg5891]

He could hit the jackpot someday...

[@sfm9]

No zipper today ...

[@kubyhu4525]

The issue isn’t profit or mortgages. While these are problems not really red flag nor systemic within the banking institutions themselves. The issue is commercial lending. Same issue across all major economies that have employed this MMT trash since 08.’ They’re all printing money supply at record ramp ups and as a result lending to very very poor quality corporations. AAA value corporate bonds have diminished in size and the risk-on for this debt has festered to a level of deep concern and unsustainability. Eisman is looking really gloomy during this interview. Anyone else notice that? He knows we didn’t learn from 2008 and simply shifted the recklessness from homes to corporate loans; CDOs to CLOs.

[@MangoFlamingo]

He was 4 years early

[@nohopeequalsnofear3242]

Deutsche bank has been dying forever.... the germany zombie bank wont die.... weird. Sears and GM too... it held on for decades

[@jonathannoonan8596]

GM? What are you talking about

[@russburton6262]

unicredit 4000 jobs dochebank 18000 jobs gone and now bmo he is right again lmfao we should be using the bank of canada not central banks look at rocco galotti vs canada

[@Tom_van_Gorkom]

Short Canadian (state) banks!

[@Pyette91]

is this guy steve carroll?

[@cgasucks]

Not quite. Steve Carrell played him in The Big Short.

[@don-cw1yz]

Well, Stevy boy how has that short on Canadian banks worked out so far. It's February 2020 and the Canadian bank's stocks have soared. Is that a burning scent, I smell?

[@v4enthusiast541]

Time in the market > Trying to time the market

[@boogyjuggy]

Bring on the crash...major housing bubble, major debt bubbles...all over the country...governments printing money, more debt...this will not end well... Go leafs go

[@trapOrdoom]

QC indeed sucks.

[@laylalayla5364]

Lots of denial and lala land minds in Canada

[@mmoldvaer]

7/20

[@Joe-jc5ol]

A risk of what exactly? I do not see how entities with a 20% profit margins on loans, 50% mortgages insured, the other 50% of mortgages are at least 20% paid off, operating in several countries (most operate in Canada and at least the US as well) What is the risk? They will have a quarter of little or no profits? Oh no!

[@guface]

Joe Elyahchouchi because he’s shorting bank stock value not their profitability. Even if it’s breaking even or making a small profit, stock values will plunge.

[@remlatzargonix1329]

guface ....yes, because he wins if their share price falls below ( the shorted price plus cost of financing the short position). If his position is large enough, then a fairly small move downwards in price could work out well for him. On the other hand, even if he is correct, if the costs of financing his position blow up, before the share prices fall far enough, then he could get hammered.

[@martinhebert3223]

Stupid short. For the same reason u just stated, canadian banks represent one of the best, by far, investment on the american market at a PE of 12, growing at 10%. And this is a good reason to convince folks to sell their shares for a discount. Thats what i think it is. Like warren buffet said, ignore the noise, thats exactly what i do after watching this.

[@Joe-jc5ol]

@@remlatzargonix1329 His short position is expensive because of the dividends. I bought CIBC last month after their earnings disappointed, I am already due for a 1% dividend. So his short position costs him at least 5.5% dividends a year+whatever interest he wants to pay whoever lends him... If by next earnings report the share price does not fall at least 5% then he already lost that much at the very least, because he has been talking about shorting the banks since last February if I am not wrong.

[@r4ym1n13]

@@Joe-jc5ol Ill collect my dividends from TD thank you

[@nznsi]

0:48 "two months ago I was a seven, now I'm at a noine" .... anyone else think of bababooey when he said that?

[@PlayMyMusicPlaylist]

Same reason to much leverage game in real estate

[@nunoalexandre6408]

Boom !!!!!!!!...Muhahahahahahaah

[@foobarerable]

Still waiting... lol

[@kennethjohnsen9005]

She wears her on weight in make-up. She must be working out!

[@samverstraeten4626]

Ahh man, right again.

[@laysz]

I wonder if he made money

[@myessyallyahamericus8405]

when i say i wish i was never born im not kidding. if i could have one wish in this life its that it would of never started to begin with. it hurts that much. im just honest. it hurts that bad.

[@BD-me4nk]

BNN - Babes News Network

[@rs72098]

He's a little too early again. Demographics will bring down Canada. Million dollar houses with gigantic real estate growth, there simply isn't enough people living in Canada to buy all the houses.

[@nameless_no_name]

prices are dropping (at least in Vancouver)

[@lazybeatz]

We have a lot of immigration happening in Canada, the homes will be sold to newcomers with bags of money. It's all good unless Deutsch Bank ruins the party for the entire banking sector. Why didn't he go short DB? LOL

[@trapOrdoom]

lazybeatz immigrants don’t do this. Look at the properties being built, mostly high-end condos and small. Immigrants typically come with families who need to occupy bigger homes. Even when they have it to blow, they don’t generally come to a foreign land doing so unless they’re extremely wealthy. While I agree we receive a hefty amount of extremely wealthy immigrants, the bulk of them are probably middle class at best. Educated, and experienced. Still with families. 0 bedroom luxury at $500k isn’t appealing. 3/4Bdm anywhere close to the city of decent transit: $1M+ Make it make sense, brother.

[@wesleyscott5804]

This dummy was long banks in 2015. How's the interest rate now wise guy.

[@cameronjournal]

Ma'am......we need to talk about your eyelashes....

[@KP-dd2ci]

Hahaha....That should be the biggest short.

[@Jancan20]

too much make up girl

[@travelreview8520]

She would look amazing without those fake eyelashes

[@ACT1O1]

O C you should be paying attention to what he is saying

[@trapOrdoom]

ACT1O1 right and she’s not cute, barely a top lip

[@MegaEhmcee]

Damn Catherine Murray. So fine. And Steve is going to lose a lot of money.

[@tombratton3196]

she is good, just needs more eye make-up ;)

[@MrJimmysez]

I think it will be as last time, where the US has a huge mortgage/banking failure crisis while Canada will do just fine. Steve may lose a few barrels of money.

[@RAC-es3mb]

Canada is in deep shit!!! What are you talking about???

[@rs72098]

US has a faster growing population, Canada is growing but slower.

[@Tinman20737]

Fear monger interviewer. She keeps pushing for the answers she wants to hear and likes to try to put words in his mouth or twist the things he is saying.

[@jonathankr]

Corona made him money...for the wrong reasons. He didn't predict this at all. Pure luck. Or not?

[@leocriss6354]

He understands when companies don’t balance there books the correct way, when a black swan event happens (C-Virus), those same companies without major bailouts will fail. So he’s smart in that he understands that black swan events do happen and he does his research on the companies that could fall because of it.

[@yinliu5634]

The CND bank stock is down about 40%, for a lot of the reasons he stated. To be fair, he did say, he doesn't know what the trigger will be to start the downturn, but it will happen. And it happened.

[@CORZER0]

What is up with her face?

[@darcymcnabb9259]

He was wrong Canadian Banks are the world's best managed........ As time has proven .....

[@Chaa-nal-anda]

Wont happen steve

[@HuShang]

Certainly wont happen

[@brettcarter5142]

He’s gotten slaughtered on his short call, really naive position to pick up, and that’s how it’s worked out

[@patrickmacmillan]

What? No. Look what happened to the stock price of Canadian banks in the last week of August 2019. He hit an absolutely jackpot, once again.

[@brettcarter5142]

Patrick MacMillan You do know that when shorting a stock you need the value to go down right? RBC August 23 was at 97.60 , RBC August 30 was at 99.58 , RBC Sept 20 was at 107.96. That’s a terrible period for a short trader. And he’s been saying short RBC for years and it’s never had the downturn he’s said, it’s gone consistently up. CIBC Aug 20 98.75 , Aug 30 106.10 , Sept 19 111.15

[@brettcarter5142]

Patrick MacMillan What stock did he hit the jackpot with in the last week of August that validates him?

[@brettcarter5142]

And he’s gone, helps prove my point well though that the exact opposite of a jackpot was hit by Steve Eisman

[@nickhiggins9807]

Brett Carter well it’s paid of now, they crashed in March

[@harlyslamm2888]

He lucked into the big short by a wrong number phone call into his company! Now he's all at sea. A mediocre money manager who really doesn't have a clue...