Steve Eisman
Appearances
Escaping the Drift with John Gafford
From the Big Short to Tariffs: Steve Eisman on Trade Wars and Globalization
sell some things in your portfolio you know sell positions that are not your favorite positions you know maybe even on your some of your favorite positions sell a little you'll feel better yeah and and wait just wait you don't have to you don't have to be there for the first uptick if if things get resolved because if things get resolved it'll be upticked for a very long time
Escaping the Drift with John Gafford
From the Big Short to Tariffs: Steve Eisman on Trade Wars and Globalization
You know, the downside risk here from a – I mean, I think the risk of a trade war is less than 50%. How much less than 50%? I don't know yet. But that's not infinitesimal. So if there's a full-blown trade war, the market would go considerably lower. I can't handicap for you right now.
Escaping the Drift with John Gafford
From the Big Short to Tariffs: Steve Eisman on Trade Wars and Globalization
No, I would not consider that a trade war.
Escaping the Drift with John Gafford
From the Big Short to Tariffs: Steve Eisman on Trade Wars and Globalization
The United States only has 11% of its GDP coming from exports. That is the lowest number probably on planet Earth. China officially is at 20%, but that doesn't include all the stuff that they ship to Vietnam and Cambodia that eventually makes its way here. So China, and this is just a guess, is probably at least 30%.
Escaping the Drift with John Gafford
From the Big Short to Tariffs: Steve Eisman on Trade Wars and Globalization
An outlier to the problem. I think that's dealable. That can be dealt with.
Escaping the Drift with John Gafford
From the Big Short to Tariffs: Steve Eisman on Trade Wars and Globalization
Well, they certainly did that on Friday.
Escaping the Drift with John Gafford
From the Big Short to Tariffs: Steve Eisman on Trade Wars and Globalization
Which was sort of weird. I mean, what did you expect? Did you actually seriously think that China was not going to retaliate at all? Of course they were going to retaliate. They had to. They had to save face.
Escaping the Drift with John Gafford
From the Big Short to Tariffs: Steve Eisman on Trade Wars and Globalization
I actually didn't understand that move other than people were trying to buy stocks and so they were selling bonds. Otherwise, it made no sense to me. I would suspect if things stay hairy for a while, yields will go back down.
Escaping the Drift with John Gafford
From the Big Short to Tariffs: Steve Eisman on Trade Wars and Globalization
Well, if we're talking about residential real estate, as we all know, the residential real estate market is locked right now. And it's locked because of COVID. And the reason why it's locked because of COVID is that everybody with a pulse refinanced their mortgage 3%. And today, if you take out a mortgage... I mean, what's the latest rate? Six, six and a half?
Escaping the Drift with John Gafford
From the Big Short to Tariffs: Steve Eisman on Trade Wars and Globalization
Okay. So call it six, seven, five. Yeah. So one thing I learned very early in school is that six, seven, five is more than three. Three. Yeah. In fact, it's more than twice as much. And mathematically, that's a problem. My guess is mortgage rates would have to go below six to get the residential market unlocking.
Escaping the Drift with John Gafford
From the Big Short to Tariffs: Steve Eisman on Trade Wars and Globalization
I mean, if your kids are climbing the walls and they've got no place to sleep, you're going to, you're going to not to five, five.
Escaping the Drift with John Gafford
From the Big Short to Tariffs: Steve Eisman on Trade Wars and Globalization
I think there's just so many variables. I wouldn't be making any bets right at this point. It's just too hard. Too many variables to make. It's all down to one variable. It's one variable. It's all one variable. Markets are very, very difficult. You know, if you go back to 08... the variable was the balance sheets of the large banks, and everybody was trying to do detective work on what they had.
Escaping the Drift with John Gafford
From the Big Short to Tariffs: Steve Eisman on Trade Wars and Globalization
It turned out they had a lot of bad stuff, and that was a bad variable. Today, the variable is the President of the United States, and he hasn't called me, so I can't give you any insights.
Escaping the Drift with John Gafford
From the Big Short to Tariffs: Steve Eisman on Trade Wars and Globalization
Europe, every country in Europe is in excess of 30%, with the exception of Germany, which is over 40%.
Escaping the Drift with John Gafford
From the Big Short to Tariffs: Steve Eisman on Trade Wars and Globalization
He's bet his presidency on this. This is it. You can't put all your chips into the poker table and then say, sorry, and take them back. Then you look like a fool.
Escaping the Drift with John Gafford
From the Big Short to Tariffs: Steve Eisman on Trade Wars and Globalization
Yeah, but it's going to take time. I really do think they're all going to come to the table. I think they don't have a choice. This is the most important. Our consumer is by far the most important entity in terms of economics in the world. You have to be here. You can't be Mercedes-Benz and not sell cars in the United States of America. The company doesn't function.
Escaping the Drift with John Gafford
From the Big Short to Tariffs: Steve Eisman on Trade Wars and Globalization
So like I said, I feel pretty good that people will be rational enough to that they'll try and work out as good a deal as they can. That's going to take time. This is complicated. I mean, you're talking about tariff, VAT and any other kind of regulatory restriction stuff that I don't really even know enough about. I just know it exists.
Escaping the Drift with John Gafford
From the Big Short to Tariffs: Steve Eisman on Trade Wars and Globalization
And I have my good scenes of the movie in Vegas.
Escaping the Drift with John Gafford
From the Big Short to Tariffs: Steve Eisman on Trade Wars and Globalization
I wouldn't know anything about that.
Escaping the Drift with John Gafford
From the Big Short to Tariffs: Steve Eisman on Trade Wars and Globalization
What's that like? Well, it's actually a bit more complicated than that. So more and more amusing. Yeah. So I think in the fall of 2014, Michael Lewis called me because the rights to his book were sold right after he published it, which was something like 2010. And then nothing happened. So I figured that is never going to happen.
Escaping the Drift with John Gafford
From the Big Short to Tariffs: Steve Eisman on Trade Wars and Globalization
So then in 2014, I think it was like October, he called me and he said that the movie was going to get made. And Adam McKay, who was this writer, et cetera, had written the script and was going to direct and was going to call me. And I go, yeah, sure, Michael. Nice talking to you. And sure enough, a week later, I get a phone call from Adam McKay. And it was kind of a funny conversation.
Escaping the Drift with John Gafford
From the Big Short to Tariffs: Steve Eisman on Trade Wars and Globalization
He says to me, you know, he's written the script. He's going to be in New York. He wanted to come have dinner with me. And I said, sure. And then he says, he said, you know, we're trying to cast it. And at this point, it's quite possible that Brad Pitt's going to play you. And I said, I said, listen, let me just interject here.
Escaping the Drift with John Gafford
From the Big Short to Tariffs: Steve Eisman on Trade Wars and Globalization
I said, the only thing that Brad Pitt and I have in common is really good hair. And that's it. And I do have very good hair, I have to say. But that was all we had come.
Escaping the Drift with John Gafford
From the Big Short to Tariffs: Steve Eisman on Trade Wars and Globalization
And there is a chance that my wife will leave me for the guy who's going to play me. So then it turned out that he couldn't do it. He had scheduling conflict. He took a much smaller role in the movie. And then Steve Carell played me. And... I met him like twice. That was it. That was that.
Escaping the Drift with John Gafford
From the Big Short to Tariffs: Steve Eisman on Trade Wars and Globalization
So A, that really happened. It was a little bit different in that the way the movie depicted it, it was like a massive... And it was actually not a massive meeting. It was a medium-sized meeting that was hosted by Option One, which back then was a subprime mortgage lender that was owned by H&R Block. And I was sitting in the audience with my partner, Danny Moses.
Escaping the Drift with John Gafford
From the Big Short to Tariffs: Steve Eisman on Trade Wars and Globalization
And the scene about where he goes, zero probability. I did that because I was that obnoxious and rude back then. And as soon as I say it, my phone rings and I look at it and it's my wife. And I turned it in. I go, I got to take this. I got to get out of here. And I picked up my wife and I walked out. And that is what happened.
Escaping the Drift with John Gafford
From the Big Short to Tariffs: Steve Eisman on Trade Wars and Globalization
So let me go back a little bit, because I have a very, very long history with the subprime mortgage industry. In fact, I, when I was a sell side analyst at Oppenheimer in the 90s, and I cover a whole bunch of different financial services companies. One of the subsectors that I covered was Generation One, I like to call it, 1.0 subprime mortgages.
Escaping the Drift with John Gafford
From the Big Short to Tariffs: Steve Eisman on Trade Wars and Globalization
You know, companies like, if you remember, like the money store. Remember Phil Rizzuto for the money store?
Escaping the Drift with John Gafford
From the Big Short to Tariffs: Steve Eisman on Trade Wars and Globalization
So that was one of the companies that I covered. I was run by a guy who was the son of the founder. I think his name was Mark Turtletow. And in 1998, for various, very complicated reasons, most of the sector pretty much went bankrupt.
Escaping the Drift with John Gafford
From the Big Short to Tariffs: Steve Eisman on Trade Wars and Globalization
and i lived that and that was a very searing experience for me and the irony was that across the hall for me was henry blodgett who was a young analyst at oppenheimer and he was getting on the call talking about how the internet was going to take over the world and this is a direct quote dynastic levels of wealth were being were going to be created it's one of the greatest predictions in history dynastic levels dynastic levels of wealth were going he was right from the internet he said this in 1998.
Escaping the Drift with John Gafford
From the Big Short to Tariffs: Steve Eisman on Trade Wars and Globalization
And so here is Henry Blodgett talking about dynastic levels of wealth. And I have a subsector that went to dust. So after I left Oppenheimer, I went to a hedge fund and then in 2000 and I started at Frontpoint in 2004. But in 2002, Subprime Mortgage 2.0 went public. And the funny thing about Subprime Mortgage 2.0 was that it was run by the same CEOs who ran 1.0. They just changed the names.
Escaping the Drift with John Gafford
From the Big Short to Tariffs: Steve Eisman on Trade Wars and Globalization
So as early as 2002, I said to myself, I've seen this play. It's a play in three acts. People don't change. It's a play in three acts. Act three is going to be a tragedy. I'm just going to be there when it happens. When that will be, I don't know. Now, what I didn't foresee in 2002, that the industry would literally be 10 times bigger in 2006 than it was in 1998.
Escaping the Drift with John Gafford
From the Big Short to Tariffs: Steve Eisman on Trade Wars and Globalization
I think in 2002, the subprime mortgage industry originated like $50 billion. And in 2006, it originated $500 billion.
Escaping the Drift with John Gafford
From the Big Short to Tariffs: Steve Eisman on Trade Wars and Globalization
They didn't need an incentive. They made tons of money without any government incentives, believe me.
Escaping the Drift with John Gafford
From the Big Short to Tariffs: Steve Eisman on Trade Wars and Globalization
So I was waiting. When you're waiting for something to happen, you look for evidence that it will happen. And what I saw was that by the summer of 2006, we had access to Moody's securitization data. All the securitizations report all their credit data every single month. And by late spring, early summer 2006, it was very clear to us that something was wrong.
Escaping the Drift with John Gafford
From the Big Short to Tariffs: Steve Eisman on Trade Wars and Globalization
That delinquency levels in these new pools were going bad very, very rapidly. And that's when we started to investigate the shorting subprime paper. And then there's that scene where Ryan Gosling shows up in our office. That happened. That was a guy named Greg.
Escaping the Drift with John Gafford
From the Big Short to Tariffs: Steve Eisman on Trade Wars and Globalization
Yeah, all that stuff happened.
Escaping the Drift with John Gafford
From the Big Short to Tariffs: Steve Eisman on Trade Wars and Globalization
I actually don't. Yeah. The first thing I would say is I don't think a subprime mortgage has been made in the United States since 2008. At least not that I'm aware of. And the other thing that I would say is that, you know, after Dodd-Frank was passed, a new position in the Fed was created called Vice Chair of Financial Supervision.
Escaping the Drift with John Gafford
From the Big Short to Tariffs: Steve Eisman on Trade Wars and Globalization
And that's a fancy name for chief bank regulator of the United States. I mean, it's a crazy thing to say that the United States never had a chief bank regulator until 2011. And that position was occupied by Fed Governor Daniel Tarullo. who's truly one of the unsung heroes of the last 15 years because he really did an amazing job. He de-risked the banks. He de-levered the banks.
Escaping the Drift with John Gafford
From the Big Short to Tariffs: Steve Eisman on Trade Wars and Globalization
So, you know, I worry about a lot of things. I don't worry about the health of the U.S. financial system anymore.
Escaping the Drift with John Gafford
From the Big Short to Tariffs: Steve Eisman on Trade Wars and Globalization
I can only tell you what I'm doing. Okay, perfect. I sold a few things that I didn't have great confidence in and I'm sitting on my hands. That's what I'm saying.
Escaping the Drift with John Gafford
From the Big Short to Tariffs: Steve Eisman on Trade Wars and Globalization
Hedge funds, I guarantee you have de-risked. And they're waiting. And so there's a lot of cash on the sidelines. But that cash is not going to get deployed until there's clarity. They're sure.
Escaping the Drift with John Gafford
From the Big Short to Tariffs: Steve Eisman on Trade Wars and Globalization
It's a good question.
Escaping the Drift with John Gafford
From the Big Short to Tariffs: Steve Eisman on Trade Wars and Globalization
Well, do I think it should be investigated? Sure. Any type of corruption should be investigated. Do I think that's going to move markets? I don't think that's going to move markets.
Escaping the Drift with John Gafford
From the Big Short to Tariffs: Steve Eisman on Trade Wars and Globalization
I don't know. I honestly don't know. That's a good question. I've actually thought about it. I'll think about it.
Escaping the Drift with John Gafford
From the Big Short to Tariffs: Steve Eisman on Trade Wars and Globalization
I'm going to think about that one.
Escaping the Drift with John Gafford
From the Big Short to Tariffs: Steve Eisman on Trade Wars and Globalization
I don't think so. I mean, it certainly may give them more impetus, but I think Trump has been thinking about this for a very long time, way before there was AI.
Escaping the Drift with John Gafford
From the Big Short to Tariffs: Steve Eisman on Trade Wars and Globalization
I mean, The access to information, you know, you ask AI a question, you know, if you want to find out, you know, certain information that was more difficult to research in the past, boom, you got an answer now.
Escaping the Drift with John Gafford
From the Big Short to Tariffs: Steve Eisman on Trade Wars and Globalization
There I would say no. I think I'm going to say something a little radical. Information is overrated. And let me explain what I mean by that. You know, people think, you know, when they talk about what my partners and I did in 2007 and 2008, that somehow we had access to information that other people did not have. And that actually is not true.
Escaping the Drift with John Gafford
From the Big Short to Tariffs: Steve Eisman on Trade Wars and Globalization
You know, the most important, I mean, there was a lot of different types of information. It was anecdotal information that we did a lot of. But the most important information out there was the securitization data that came out every single month. And all you had to do to get that information was pay Moody's about $15,000 a year. I think that's what we paid. Whatever it was. But you know what?
Escaping the Drift with John Gafford
From the Big Short to Tariffs: Steve Eisman on Trade Wars and Globalization
Pretty good.
Escaping the Drift with John Gafford
From the Big Short to Tariffs: Steve Eisman on Trade Wars and Globalization
The entire fixed income world had that information.
Escaping the Drift with John Gafford
From the Big Short to Tariffs: Steve Eisman on Trade Wars and Globalization
No, no. They understood how to look at it better than we did because they've been doing that for years. We just interpreted it differently. They had made money for so long. in this paper that they came up with all these psychological excuses. Why? Yeah, that that is bad, but it'll get better.
Escaping the Drift with John Gafford
From the Big Short to Tariffs: Steve Eisman on Trade Wars and Globalization
And so my view is that information is important, but it's the interpretation of the information that's even more important.
Escaping the Drift with John Gafford
From the Big Short to Tariffs: Steve Eisman on Trade Wars and Globalization
I have nothing great to say about the University of Pennsylvania, by the way. Because I went there, I got a lot of problems with the school.
Escaping the Drift with John Gafford
From the Big Short to Tariffs: Steve Eisman on Trade Wars and Globalization
That's public knowledge.
Escaping the Drift with John Gafford
From the Big Short to Tariffs: Steve Eisman on Trade Wars and Globalization
It's public information. Yeah.
Escaping the Drift with John Gafford
From the Big Short to Tariffs: Steve Eisman on Trade Wars and Globalization
Just go to the eismanplaybook.com. That's our podcast website. We'll soon have another website, which will be broader. It'll be steveeisman.com, but it's not up yet. And I'll be dropping a podcast pretty much once a week.
Escaping the Drift with John Gafford
From the Big Short to Tariffs: Steve Eisman on Trade Wars and Globalization
I mean, I'll tell you what I read and then I'll tell you what I focus on. I read the newspapers every single morning. You know, I come in, I turn on my Bloomberg and I look at the news. And then what I do is I read a lot of sell side research.
Escaping the Drift with John Gafford
From the Big Short to Tariffs: Steve Eisman on Trade Wars and Globalization
And what I have found over the years is that and there are exceptions to this, but generally speaking, the boutique firms, little firms that most people haven't heard of, you know, not the Goldman Sachs and Morgan Stanley's of the world. They're good analysts there, too, tend to produce research. It's a lot more.
Escaping the Drift with John Gafford
From the Big Short to Tariffs: Steve Eisman on Trade Wars and Globalization
And sometimes you could say unbiased, but I would say deeper dives into what's happening. And I tend to learn a lot more from those people.
Escaping the Drift with John Gafford
From the Big Short to Tariffs: Steve Eisman on Trade Wars and Globalization
I think. use a term that probably no one has applied to this what we have is a theological problem and what i mean by that is everybody like you like me in the markets um went to college and we all at least took econ 101 and econ 101 they taught you that free trade is good tariffs are bad trade wars are terrible and the thing about economics is It's very persuasive because there's a lot of math.
Escaping the Drift with John Gafford
From the Big Short to Tariffs: Steve Eisman on Trade Wars and Globalization
There are a lot of graphs. There are a lot of tables. And all that math, tables and graphs can't be wrong because they have all that math, graphs and tables. And, you know, everybody walks out of, you know, when you walked out of Econ 101, you thought, you know, I really learned something. So we have been living in a world of economics now for a long time.
Escaping the Drift with John Gafford
From the Big Short to Tariffs: Steve Eisman on Trade Wars and Globalization
And I think part of the problem is you have to go back to the 90s. In the 90s, President Clinton sold NAFTA and China entering the WTO with two arguments. And those arguments were, this will increase GDP and it will create a lot of jobs.
Escaping the Drift with John Gafford
From the Big Short to Tariffs: Steve Eisman on Trade Wars and Globalization
he was 100 right about the former and he was terribly wrong about the latter you know if you have i after the movie i i got a great speaking gig and i've made speeches all over this country and you know let's say i go to university in the middle of indiana or something you you drive from the airport through towns that have been obliterated literally obliterated i mean half a main street is closed no new home has been built in a generation and
Escaping the Drift with John Gafford
From the Big Short to Tariffs: Steve Eisman on Trade Wars and Globalization
You have to remember the GDP is just an aggregate number, but it doesn't tell you that maybe half the country has suffered terribly from what happened. So I think what President Trump is trying to do, and I have to say great sympathy for this, is he's trying to right a wrong. Because after the 90s, we allowed our manufacturing base to go overseas. Okay. but we didn't retrain our people.
Escaping the Drift with John Gafford
From the Big Short to Tariffs: Steve Eisman on Trade Wars and Globalization
We left them, we said, it's your problem, you go deal.
Escaping the Drift with John Gafford
From the Big Short to Tariffs: Steve Eisman on Trade Wars and Globalization
So I think what he's trying to do is two things. He's trying to level the trading playing field because we are the only ones who seem to play fair. We've had very low tariffs, very low barriers. Everybody else has tariffs and barriers. And he's also trying to bring a lot of jobs back to the United States. And, you know, you could think about President Trump, whatever you want.
Escaping the Drift with John Gafford
From the Big Short to Tariffs: Steve Eisman on Trade Wars and Globalization
Some people like him, some people hate him. But one thing that I find admirable, regardless of whether you agree with his policies or not, he's one of the few politicians in our lifetimes who actually does what he says he's going to do. And nobody believed this tariff stuff because it's so against what everybody learned in college. They didn't take it seriously.
Escaping the Drift with John Gafford
From the Big Short to Tariffs: Steve Eisman on Trade Wars and Globalization
He's just fulfilling his campaign promise. Now, The people who voted for President Trump, his biggest followers, are not big investors in the market. They're the ones who live in these towns. So I think there's a reset about what's happening, and it's extremely jarring because he's not playing by the playbook that everybody learned in college. That's part of it.
Escaping the Drift with John Gafford
From the Big Short to Tariffs: Steve Eisman on Trade Wars and Globalization
What I think is also clear is that this is going to take time. And thankfully... and I really mean this thankfully, the United States is in the best position in the world to deal with this.
Escaping the Drift with John Gafford
From the Big Short to Tariffs: Steve Eisman on Trade Wars and Globalization
The tyrants are the tanks.
Escaping the Drift with John Gafford
From the Big Short to Tariffs: Steve Eisman on Trade Wars and Globalization
Ah, okay. So let me quote some statistics. Okay, perfect. The internet is a great thing for research, as we know.
Escaping the Drift with John Gafford
From the Big Short to Tariffs: Steve Eisman on Trade Wars and Globalization
I got these statistics in 10 seconds. Okay. So the United States... only has 11% of its GDP coming from exports. That is the lowest number probably on planet Earth. China officially is at 20%, but that doesn't include all the stuff that they ship to Vietnam and Cambodia that eventually makes its way here. So China, and this is just a guess, is probably at least 30%.
Escaping the Drift with John Gafford
From the Big Short to Tariffs: Steve Eisman on Trade Wars and Globalization
Europe, every country in Europe is in excess of 30%, with the exception of Germany, which is over 40%. Mexico and Canada are each 35% of their GDP comes from exports and is the kicker. 25 points of that 35% comes here exports to the United States. So if we were if we are working under the assumption, and believe me, it's a big assumption that everyone is going to act rationally.
Escaping the Drift with John Gafford
From the Big Short to Tariffs: Steve Eisman on Trade Wars and Globalization
Everybody would come to the United States cap in hand and say, okay, listen, all the stuff that we've been doing, jiggering the trade in our favor, game's up. Let's try and negotiate as good a deal as we can. That says everybody's rational. Now, everybody's not necessarily rational. Politicians want to get reelected.
Escaping the Drift with John Gafford
From the Big Short to Tariffs: Steve Eisman on Trade Wars and Globalization
They might be afraid that if they cut any deal with President Trump, they're not going to get reelected. So I can't handicap that. I can only say that if they're rational, deals will be worked out. I do know, because I have a very good friend who runs a hotel in D.C., that the hotels apparently in D.C. are filled with ambassadors from all over the world asking to negotiate. Let's talk.
Escaping the Drift with John Gafford
From the Big Short to Tariffs: Steve Eisman on Trade Wars and Globalization
So I thought that was pretty nice information that I got this weekend. But I don't know how it's going to play out. My guess is most countries will cut a deal. It may take a few months to cut those deals, but most countries will cut those deals. China may not cut a deal. China may say, you know, this is just a form of war and we'll deal. That I can't handicap at all.
Escaping the Drift with John Gafford
From the Big Short to Tariffs: Steve Eisman on Trade Wars and Globalization
Like I said, 25% of your GDP is exports to the United States. You're not exactly holding a lot of cards.
Escaping the Drift with John Gafford
From the Big Short to Tariffs: Steve Eisman on Trade Wars and Globalization
Oh, I think they're probably increasing their prices because they have to because these tariffs are very punitive for them.
Escaping the Drift with John Gafford
From the Big Short to Tariffs: Steve Eisman on Trade Wars and Globalization
I can't answer that question. I don't have enough information to know that one way or the other. I think Nike and Apple are going to have… Look, you can't rejigger your supply chain from Vietnam and China to the United States overnight. It doesn't work that way. You know, factories, unfortunately, can't be built overnight. That's just not how it happens.
Escaping the Drift with John Gafford
From the Big Short to Tariffs: Steve Eisman on Trade Wars and Globalization
So does that mean that there are going to be higher prices for certain goods in the near term? Probably. You know, this is not going to be a seamless transition.
Escaping the Drift with John Gafford
From the Big Short to Tariffs: Steve Eisman on Trade Wars and Globalization
is right now in Congress, they're hornswoggling about taxes. And I think one of the things that will be proposed is if you build a factory in the United States, and I think it'll be backdated to the beginning of the year. So if you build a factory in the United States, you get 100% write-off. That's pretty wild.
Escaping the Drift with John Gafford
From the Big Short to Tariffs: Steve Eisman on Trade Wars and Globalization
Some combination of both, but unions are much weaker at this point.
Escaping the Drift with John Gafford
From the Big Short to Tariffs: Steve Eisman on Trade Wars and Globalization
I think companies will probably choose states that don't have strong unions is my guess. So if I had to take a guess, you know, which states do I think are going to benefit the most? You'll see them in the south and the Midwest outside of union strongholds. That's just a guess.
Escaping the Drift with John Gafford
From the Big Short to Tariffs: Steve Eisman on Trade Wars and Globalization
That's part of the problem with economics is when you peel it back, you realize that one of the major assumptions about economics is that people act rationally. And one thing I know from watching my screens every single day on terms of stocks is the last thing people do on most days is act rationally. They act emotionally. Yeah.
Escaping the Drift with John Gafford
From the Big Short to Tariffs: Steve Eisman on Trade Wars and Globalization
The best case scenario, I think, is two to three months. Two to three months. Yeah. That's pretty quick.
Escaping the Drift with John Gafford
From the Big Short to Tariffs: Steve Eisman on Trade Wars and Globalization
And the worst case scenario is a full-blown trade war.
Escaping the Drift with John Gafford
From the Big Short to Tariffs: Steve Eisman on Trade Wars and Globalization
I don't know. That's above my pay grade, Ben.
Escaping the Drift with John Gafford
From the Big Short to Tariffs: Steve Eisman on Trade Wars and Globalization
So what I would say to people right now is this is not the time to be a hero. You know, first of all, any, the, any analysis, analysis, On my own podcast, The Eisen Playbook, I had my old partners on last week, which we just posted. And we were talking about, if we were all still together running our hedge fund, what would we do? And I think we all concluded that we would not press shorts.
Escaping the Drift with John Gafford
From the Big Short to Tariffs: Steve Eisman on Trade Wars and Globalization
We would just take the book down on both sides. We would just de-risk and we'd sit and wait. And the reason is that when In normal times, there are a lot of different variables that move markets and move stocks. And right now, that whole world is out the window. There's one variable that matters, and his name is President Donald Trump. And that means volatility.
Escaping the Drift with John Gafford
From the Big Short to Tariffs: Steve Eisman on Trade Wars and Globalization
So what I would say to people is, if you're literally having a conniption fit every single day and you can't sleep, and Lord knows you need to sleep,
Money Rehab with Nicole Lapin
Are We Back to 2008? With The Big Short's Steve Eisman
Not even a little bit. I just don't. I think the entire deficit is too big. You know, de-dollarization. Everybody's going to sell their treasuries. It's Armageddon. Cats and dogs are going to lie down together. It's the end of the world. Story has been told on and off by people for 40 years.
Money Rehab with Nicole Lapin
Are We Back to 2008? With The Big Short's Steve Eisman
What I think people miss about when they talk about sovereign debt crisis stuff is that the entire global financial system runs on treasuries. Period. Banks do overnight repos, which is where they lend to each other overnight. They do it in treasuries. Sovereign wealth funds park the money. They do it in treasuries. There is no alternative.
Money Rehab with Nicole Lapin
Are We Back to 2008? With The Big Short's Steve Eisman
And the reason why there is no alternative is there's no other... There's no other asset class that is anywhere close to as liquid or as safe. So if the Chinese bond market was a much bigger and better market or crypto was 1,000 times bigger than it is today, we could have a discussion. Until then, it's just short-term generations as far as I'm concerned.
Money Rehab with Nicole Lapin
Are We Back to 2008? With The Big Short's Steve Eisman
I don't know about zero. You know, a lot of things have been five to 10 years. But right as low as it's not something I worry about. I just don't worry about.
Money Rehab with Nicole Lapin
Are We Back to 2008? With The Big Short's Steve Eisman
I think he needs a hug. He does. He needs a little bit of a hug.
Money Rehab with Nicole Lapin
Are We Back to 2008? With The Big Short's Steve Eisman
Yeah, but the economy is a lot bigger. They were saying the same thing when it was $1 trillion. It's just a number. I just don't think it's an issue.
Money Rehab with Nicole Lapin
Are We Back to 2008? With The Big Short's Steve Eisman
No, subprime mortgages scared me to death. This does not scare me that much.
Money Rehab with Nicole Lapin
Are We Back to 2008? With The Big Short's Steve Eisman
Yeah, what scares me is the potential for a trade war. That scares me. I wouldn't put that as a zero probability. President Trump is playing high stakes poker right now.
Money Rehab with Nicole Lapin
Are We Back to 2008? With The Big Short's Steve Eisman
No, I don't think he's going to say psych, just kidding. I mean, you could like President Trump. You could dislike President Trump. I'm not making a political pitch here. But I think one thing that is extremely admirable about him is that he's one of the few politicians I've ever seen where he actually goes out and does what he told you he was going to do. He campaigned on this.
Money Rehab with Nicole Lapin
Are We Back to 2008? With The Big Short's Steve Eisman
This is what he told you he was going to do it. And he did it. And everybody's like, I can't believe he did it. I said, what do you mean? This is not like, you know, when President Bush got elected the second time, or it was the first time, I can't remember which one it was. And then they immediately tried to change social security.
Money Rehab with Nicole Lapin
Are We Back to 2008? With The Big Short's Steve Eisman
And everybody said, what do you mean you're trying to change social security? You didn't mention this on the campaign. This was front and center throughout the campaign. So I don't understand why people are shocked. I guess they just, you know, I think part of the issue that people have is everybody that we know took Econ 101.
Money Rehab with Nicole Lapin
Are We Back to 2008? With The Big Short's Steve Eisman
And in Econ 101, they all taught you that free trade is good, tariffs are bad, trade wars are terrible. And they showed it to you with graphs and tables and pictures. And it's all very, very convincing and mostly right. Except what they didn't tell you is that free trade can obliterate industries.
Money Rehab with Nicole Lapin
Are We Back to 2008? With The Big Short's Steve Eisman
When you took Econ 101, they made it sound like if you divide the world between guns and butter, one country should produce all guns and the other country should produce all butter and everybody would be better off. And what was never discussed was, yeah, but what happens to all the people who are making butter who lose their jobs? They make it sound like they're all going to get a job making guns.
Money Rehab with Nicole Lapin
Are We Back to 2008? With The Big Short's Steve Eisman
That's not how it works. You know, all these people lost their jobs and a lot of them are on welfare and nobody ever offered them an opportunity to retrain. So it's gotten very ugly.
Money Rehab with Nicole Lapin
Are We Back to 2008? With The Big Short's Steve Eisman
This was a bazooka.
Money Rehab with Nicole Lapin
Are We Back to 2008? With The Big Short's Steve Eisman
Is that fair? Yes, I agree. But I think if you take a step back again and ask yourself, If you want to change the terms of trade, how are you going to do that? You can't be nice. You got to be mean. You got to be tough. And then given the fact that only 11% of our GDP is from exports, let's talk.
Money Rehab with Nicole Lapin
Are We Back to 2008? With The Big Short's Steve Eisman
It's not that you don't have much to lose. You have something to lose. You have less to lose than everybody else.
Money Rehab with Nicole Lapin
Are We Back to 2008? With The Big Short's Steve Eisman
You're all calling me. They're basically saying, please. Well, thanks for answering our call. Predict the end of the world again. And I'm like, dude, I've been there before. I'm not predicting again if I don't believe in it.
Money Rehab with Nicole Lapin
Are We Back to 2008? With The Big Short's Steve Eisman
The difference between then and now is now you have a, let's make a worst case scenario. There's a trade war of some undetermined dimension and it causes a global recession. That, to me, is the worst case scenario for here. The worst case scenario in 08 was the end of everything. There's a big difference. Let's take an example.
Money Rehab with Nicole Lapin
Are We Back to 2008? With The Big Short's Steve Eisman
If General Motors tomorrow went bankrupt, let's just say hypothetically, what would happen? Everybody who works at General Motors would lose their jobs. And the government did not bail them out, let's say. Worst case scenario for GM, got liquidated. General Motors goes bankrupt. Its employees lose their jobs. A lot of the companies who supply things to General Motors would have to lay people off.
Money Rehab with Nicole Lapin
Are We Back to 2008? With The Big Short's Steve Eisman
Some of them would go out of business. For that part of the industry, of the economy, that would be very bad. and how much of an impact it would have on the entire economy of the United States. I can't dimension it, but it maybe would cause a recession. Maybe, I don't know. When JP Morgan goes down, planet Earth burns. Hard stop. It's the end.
Money Rehab with Nicole Lapin
Are We Back to 2008? With The Big Short's Steve Eisman
People can't get their money, but nobody trades stocks. Things stop. You know, I had, after a wait, I was talking to a friend of mine who ran a small chemical company in New Jersey. And I said to him, like when it was over, I said, what was 08 like for you? And he said, well, he said the first nine months of 08 were good. And then things stopped. I said, you mean like things slowed down?
Money Rehab with Nicole Lapin
Are We Back to 2008? With The Big Short's Steve Eisman
He said, no, things stopped, nothing moved. And that's because people were worried about the money, the money that they had in the bank. You know, when you're worried about the money that you have in the bank, things stop. When there's a global trade war, there's a recession. It's a whole other dimension.
Money Rehab with Nicole Lapin
Are We Back to 2008? With The Big Short's Steve Eisman
Anything. Right. You were worried that things were going to go to zero.
Money Rehab with Nicole Lapin
Are We Back to 2008? With The Big Short's Steve Eisman
Down 10%. Right. Yeah. David Portnoy, for example, was upset over the weekend, I think, that he was down $7 million. He was down $7 million from $100 million. Nobody likes the come down. But there's a difference between going from $100 million to $93 million versus going to $100 million and worrying that your $100 million is gone.
Money Rehab with Nicole Lapin
Are We Back to 2008? With The Big Short's Steve Eisman
Yeah, you look at your portfolio and it's lower and you feel bad. That's how we all react.
Money Rehab with Nicole Lapin
Are We Back to 2008? With The Big Short's Steve Eisman
And some not hiding in plain sight.
Money Rehab with Nicole Lapin
Are We Back to 2008? With The Big Short's Steve Eisman
Well, the first thing I would say to people is that the statement that I'm looking for an information edge is overrated.
Money Rehab with Nicole Lapin
Are We Back to 2008? With The Big Short's Steve Eisman
what i mean by that is you know people think that in 07 and 08 that i had access to information that other people did not have and that's just not true you know the big the biggest data source that i had was from moody's where the securitization securitizations report every single securitization reports all its credit data every single month. That was the Bible.
Money Rehab with Nicole Lapin
Are We Back to 2008? With The Big Short's Steve Eisman
That piece of information that came out every month during two days a month in the middle of the month was more important than anything else because those were hard numbers and they couldn't be faked. And I viewed that data very, very negatively and it kept reinforcing the other research that I did. But other people who looked at the same data
Money Rehab with Nicole Lapin
Are We Back to 2008? With The Big Short's Steve Eisman
came to conclusions that, well, it's bad, but it'll get better. So information is important. It's the interpretation of the information, I think, that is more important.
Money Rehab with Nicole Lapin
Are We Back to 2008? With The Big Short's Steve Eisman
I look at the Moody's data, but there isn't a credit issue in the United States at this point. If there was a recession... See, the difference between then and now in terms of credit data was... There, leverage got so high and so many bad loans were made that the credit data deteriorated before there was a recession, which is unusual.
Money Rehab with Nicole Lapin
Are We Back to 2008? With The Big Short's Steve Eisman
Usually what happens is there's a recession, people get laid off, and then the data gets bad. So, you know, right now, if you were to do a deep dive in the credit data, you would see delinquencies are up some. It's no calamity. You know, it's within the normal bounds. And if you talk to all the banks, they basically say the same thing.
Money Rehab with Nicole Lapin
Are We Back to 2008? With The Big Short's Steve Eisman
Now, if there's a global trade war and then there's a global recession, the data will get bad. But that's almost tautological.
Money Rehab with Nicole Lapin
Are We Back to 2008? With The Big Short's Steve Eisman
Not even a little bit in terms of credit. I don't think a subprime mortgage loan has been made in the United States since 2007. Not one. I mean, I may be exaggerating a little bit, but basically there are no subprime mortgage loans made in the United States. The issue with the housing market is that it's locked.
Money Rehab with Nicole Lapin
Are We Back to 2008? With The Big Short's Steve Eisman
And the reason why it's locked is that during COVID, because rates went to zero, anybody with a pulse refinanced their mortgage at 3%.
Money Rehab with Nicole Lapin
Are We Back to 2008? With The Big Short's Steve Eisman
Exactly. And so if you're going to buy someone's home today, you're paying six and a half, seven. One thing I learned in first grade is that six and a half, seven is more, a lot more than three. In fact, it's more than twice as much. And so it, you know, it's very hard to get, you know, that's why existing home sales are so moribund. And again,
Money Rehab with Nicole Lapin
Are We Back to 2008? With The Big Short's Steve Eisman
You know, the new homes were doing very well for a while, and the big home builders were giving people incentives. They were buying down people's rates, and that helped a lot. But that seems to have run a lot of its course. So even new home sales are kind of just flattish. You know, the only thing that's going to get the housing market really going again is either time, a lot of time.
Money Rehab with Nicole Lapin
Are We Back to 2008? With The Big Short's Steve Eisman
or rates have to come down. I think mortgage rates have to get to five, something like that.
Money Rehab with Nicole Lapin
Are We Back to 2008? With The Big Short's Steve Eisman
We were facing the end of the world. We all thought we were going to die. And we don't want that. We don't want to die. So, you know, for rates to go back to three, three, God forbid they should go back to three. Because if rates go back to three, we'll have so many other problems. You're not going to be worried about buying a house. You'll be worried about a lot of other things.
Money Rehab with Nicole Lapin
Are We Back to 2008? With The Big Short's Steve Eisman
Exactly. So could they get to five, five and a half? Yes. Would that help the housing market? Absolutely. Is everybody with a three percent mortgage that owns a home going to sell their home? No.
Money Rehab with Nicole Lapin
Are We Back to 2008? With The Big Short's Steve Eisman
It's an inventory problem. You know, it will certainly help. How much? We'll see.
Money Rehab with Nicole Lapin
Are We Back to 2008? With The Big Short's Steve Eisman
I agree. Near term, people are taking a short term view that the whole trade policy puts the dollar at risk. I think that's wrong for the reasons that I went into. But that, you know, you can't short term trading is short term trading. It'll work itself out eventually.
Money Rehab with Nicole Lapin
Are We Back to 2008? With The Big Short's Steve Eisman
Or is there something else, another move? Or just put your money into your money market fund and sit and wait. You know, treasury money market fund, which is paying...
Money Rehab with Nicole Lapin
Are We Back to 2008? With The Big Short's Steve Eisman
Four and change. It's not so bad. You know, it's a spark of day. You don't have to worry about it. And then when you feel more comfortable, you buy again.
Money Rehab with Nicole Lapin
Are We Back to 2008? With The Big Short's Steve Eisman
I'm not waiting for a 2,000 point drop. Not you. No, I understand what you're saying. What I am waiting for is resolution.
Money Rehab with Nicole Lapin
Are We Back to 2008? With The Big Short's Steve Eisman
certainty there's some level of certainty about which way this is going to go because if if if it resolves well and you've raised some cash so you missed the first couple of days big deal you know if it resolves well you're back to a bull market that will probably last year so what differences are made on the other hand if it resolves poorly you'll be happy to have had some of that cash
Money Rehab with Nicole Lapin
Are We Back to 2008? With The Big Short's Steve Eisman
Correct. But during the interim, it was hell. It was hell.
Money Rehab with Nicole Lapin
Are We Back to 2008? With The Big Short's Steve Eisman
Straight to the bank?
Money Rehab with Nicole Lapin
Are We Back to 2008? With The Big Short's Steve Eisman
I'll give a career tip. Since your audience skews young and maybe this will be helpful to them. And this is partly from my own personal experience. So if you go back in time, I graduated law school, I clerked for federal judge, which was great. And I went to work for a big corporate law firm and I was utterly miserable.
Money Rehab with Nicole Lapin
Are We Back to 2008? With The Big Short's Steve Eisman
So here's my lesson is that I don't agree with Warren Buffett where he says, pursue your passion. And the reason why I don't agree with it is you could love opera, but if you can't sing, you're going to be an opera singer. Pursue your attributes. So what I tell when people come to me for career advice, what I say to them is try and figure out what are your attributes?
Money Rehab with Nicole Lapin
Are We Back to 2008? With The Big Short's Steve Eisman
What are you naturally good at? You know, is it math? Is it science? Is it writing? Whatever it is. The career you choose should be the place where you can do that, as opposed to being a round peg in a square hole.
Money Rehab with Nicole Lapin
Are We Back to 2008? With The Big Short's Steve Eisman
Glad to be here.
Money Rehab with Nicole Lapin
Are We Back to 2008? With The Big Short's Steve Eisman
Really? Did something happen this week?
Money Rehab with Nicole Lapin
Are We Back to 2008? With The Big Short's Steve Eisman
Who needs a hug? I think a lot of people need a hug. I don't know about you, but I think everybody's pretty emotionally exhausted from this week.
Money Rehab with Nicole Lapin
Are We Back to 2008? With The Big Short's Steve Eisman
He did, badly. And I hugged him.
Money Rehab with Nicole Lapin
Are We Back to 2008? With The Big Short's Steve Eisman
Every day? How about every hour?
Money Rehab with Nicole Lapin
Are We Back to 2008? With The Big Short's Steve Eisman
I don't know if it's a bear market yet. In normal times, markets have many variables. You know, PE, earnings. You know, maybe there's some news about OPEC. It's multifaceted. Every now and then, 08, COVID, now, it all gets boiled down to one thing. And the one thing right now is what's going to happen with trade.
Money Rehab with Nicole Lapin
Are We Back to 2008? With The Big Short's Steve Eisman
And people are trading headlines because they're petrified there'll be a trade war and therefore a recession. And then when they have news that says maybe there won't be a trade war, they get euphoric. It's going to be like this for a while.
Money Rehab with Nicole Lapin
Are We Back to 2008? With The Big Short's Steve Eisman
Volatility is here. I wish I could say make volatility your friend because I personally don't really know how to do that. Some people do. It's here. You're just going to have to tolerate it for a while.
Money Rehab with Nicole Lapin
Are We Back to 2008? With The Big Short's Steve Eisman
No, I don't think we were bound for a correction at all. I... I'm actually, generally speaking, pretty positive on the U.S. economy. I think the U.S. economy is more dynamic than it's been certainly in my lifetime. And so the long term is very good. But this is certainly a wrinkle.
Money Rehab with Nicole Lapin
Are We Back to 2008? With The Big Short's Steve Eisman
You know, every now and then you get somebody at some interview who says, you know, generally it's like Tommy Lee. He'll say something like on a day when the market goes down. Well, it's a correction. It's healthy. And my response to that is I don't need to be so healthy.
Money Rehab with Nicole Lapin
Are We Back to 2008? With The Big Short's Steve Eisman
No, I don't think it was sick before this at all.
Money Rehab with Nicole Lapin
Are We Back to 2008? With The Big Short's Steve Eisman
I think there's a lot more going on here than just, you know, terrorist trade war. And I think to understand that you need to go back to the 90s. President Clinton, we had President Clinton. And President Clinton ushered in NAFTA and he brought in China into the world trading system. And he did so, he made two arguments.
Money Rehab with Nicole Lapin
Are We Back to 2008? With The Big Short's Steve Eisman
His argument number one was that improving global trade along those lines would accelerate GDP growth and it would create jobs. And he was 100% right on the former and he was 1000% wrong on the latter. After the big short movie, I got this really great speaking gig I travel all over the country, different universities, places, conferences.
Money Rehab with Nicole Lapin
Are We Back to 2008? With The Big Short's Steve Eisman
You know, I saw parts of the country I really had never seen before. You know, if you go to a university town, generally flying to some airport and you have to drive for an hour, an hour and a half, and you go through the towns of America. And what you see in the South, the Midwest, is not only did people lose their jobs, they lost their communities.
Money Rehab with Nicole Lapin
Are We Back to 2008? With The Big Short's Steve Eisman
So I think what President Trump is arguing, and you can disagree or agree, I have great sympathy for it, is that we really screwed half the country because of free trade. Now, it ushered in an enormous bull market with some fits and starts, but generally since 1994, it's been a tremendous bull market where people like me and others of my socioeconomic class have made a lot of money.
Money Rehab with Nicole Lapin
Are We Back to 2008? With The Big Short's Steve Eisman
but the other half of the country got obliterated and we didn't even retrain these people. We said, you're on your own, go learn how to code. And they didn't learn how to code. So I think he's, he's trying to achieve two things. He's trying to improve the terms of trade and he's trying to bring back a lot of jobs to the United States. Now, how do you do that? Oh, I'll tell you, you don't do that.
Money Rehab with Nicole Lapin
Are We Back to 2008? With The Big Short's Steve Eisman
The way you don't do that is convene a meeting of the G7 and say, hey, guys, the United States needs to change the terms of trade because it's not fair. Will you help me out? They'll laugh at you. The only way to change the terms of trade is to put a bazooka to people's heads. And once you put a bazooka to people's heads, people start negotiating.
Money Rehab with Nicole Lapin
Are We Back to 2008? With The Big Short's Steve Eisman
The other thing that I think is often missing from conversations that you see on podcasts and television is that the United States is in the best possible position of any country to change the terms of trade. Hard stop. Because the percentage of U.S. GDP that comes from exports is only 11%. That's about the lowest number in the world.
Money Rehab with Nicole Lapin
Are We Back to 2008? With The Big Short's Steve Eisman
If you look at region by region, country by country, if you were to Google China and say, ask Google or Perplexity or Gemini and ask what percentage of China's GDP comes from export, you'd get 19%. And that number is not right because so much of China's exports get routed to Vietnam and Cambodia, et cetera, and then come overseas. My guess is that number is probably closer to 30%.
Money Rehab with Nicole Lapin
Are We Back to 2008? With The Big Short's Steve Eisman
Europe, every significant country in Europe is in excess of 30%, with the exception of Germany, which is over 40. Mexico and Canada are both 35% of their GDP is from exports. And of that 35%, 25 of that 35 is pure exports to the United States. So my hope is,
Money Rehab with Nicole Lapin
Are We Back to 2008? With The Big Short's Steve Eisman
is simply that the us in terms of who's in the best position to negotiate the us is in the best possible position so if everybody's so low because the number is so low and everybody else's number is so high and they all need they all need x or x they all need access to our consumer i mean mercedes-benz do you think mercedes-benz can survive by not selling any cards in the united states i don't think so so if everybody's rational and believe me that is a big if
Money Rehab with Nicole Lapin
Are We Back to 2008? With The Big Short's Steve Eisman
People will come to the United States and they'll negotiate. Now, I have a very good friend who runs a hotel in D.C., and by chance I was speaking to him this weekend, and he said what he's hearing from all the other managers of hotels, because they all know each other, is that the hotels of D.C. are packed with people from countries looking to negotiate with the Trump administration, as we speak.
Money Rehab with Nicole Lapin
Are We Back to 2008? With The Big Short's Steve Eisman
So, like I said, if everybody's rational, Everybody will try and cut as good a deal as they possibly can. Now, not everybody is always rational as we know.
Money Rehab with Nicole Lapin
Are We Back to 2008? With The Big Short's Steve Eisman
We're going to come to that in a second. But, you know, politicians have to get reelected. They may feel like if they cut too good a deal, they get thrown out of office. So I can't handicap this. China, I think, is a different animal. I'm not sure what the administration's motivation here is. I think they... perhaps they would take it either way.
Money Rehab with Nicole Lapin
Are We Back to 2008? With The Big Short's Steve Eisman
If they could negotiate a good deal with China, they would. And if they have to leave the tariffs on and basically cut China off from the United States, they'll do that too. So you may have a situation where everybody but China cuts the deal. That's possible.
Money Rehab with Nicole Lapin
Are We Back to 2008? With The Big Short's Steve Eisman
I think we will be okay.
Money Rehab with Nicole Lapin
Are We Back to 2008? With The Big Short's Steve Eisman
A couple months.
Money Rehab with Nicole Lapin
Are We Back to 2008? With The Big Short's Steve Eisman
They will negotiate. They'll either negotiate or they won't negotiate. It's not going to take, I think, more than a couple of months to be very clear of what direction this is going in.
Money Rehab with Nicole Lapin
Are We Back to 2008? With The Big Short's Steve Eisman
It's a good conspiracy theory.
Money Rehab with Nicole Lapin
Are We Back to 2008? With The Big Short's Steve Eisman
You haven't dropped.
Money Rehab with Nicole Lapin
Are We Back to 2008? With The Big Short's Steve Eisman
You know, every now and then you get into an environment where people in the bond market start to question the reserve status of the dollar. And so you get these short-term periods where either the dollar sells off or yields go up because people are selling the bond, which is basically the same thing. And I think we're in a little bit of that right now.
Money Rehab with Nicole Lapin
Are We Back to 2008? With The Big Short's Steve Eisman
And that's why I think yields haven't dropped. I don't think that's a long-term problem, though.
Money Rehab with Nicole Lapin
Are We Back to 2008? With The Big Short's Steve Eisman
Well, if we have a recession, it will definitely go down.
Money Rehab with Nicole Lapin
Are We Back to 2008? With The Big Short's Steve Eisman
I mean, I don't know where hedge funds stand right now. Yesterday was so crazy. Clearly, there were a lot of people over their skis and they were just covering like crazy. But I can't answer that question. I don't know.
Money Rehab with Nicole Lapin
Are We Back to 2008? With The Big Short's Steve Eisman
I think the rate story is more short term, so eventually they'll come down. The problem with making a bet on home builders, and I have a little bit of a bet myself, but the problem with making a bigger bet is that if, let's say, tomorrow, hypothetically, every country reaches a deal and the economy is fine again, rates aren't going to go down, and there goes your home builder trade.
Money Rehab with Nicole Lapin
Are We Back to 2008? With The Big Short's Steve Eisman
So everything is just so binary related to the macro that the only thing I would tell people, and this is what I've done myself, is you should de-risk. You should sell. You don't go crazy because if you sell everything, you're paying taxes. But if there's something in your portfolio that you've kept but you're not that crazy about, sell it. If you think you can...
Money Rehab with Nicole Lapin
Are We Back to 2008? With The Big Short's Steve Eisman
afford to pay taxes and lighten up so you'll have some cash so you could sleep at night. Do that. But I wouldn't do anything draconian.
Money Rehab with Nicole Lapin
Are We Back to 2008? With The Big Short's Steve Eisman
If you can afford to pay the taxes, you should sell some and just pay the taxes. But I wouldn't do anything big.
Money Rehab with Nicole Lapin
Are We Back to 2008? With The Big Short's Steve Eisman
Well, I have some cash and hopefully things get better and I'll buy some stuff.
Money Rehab with Nicole Lapin
Are We Back to 2008? With The Big Short's Steve Eisman
Well, like I said, it's so binary. The tariff situation could go the wrong way, and then everything you'll have bought will go down. So this is such a binary, one-dimensional market. It's very difficult to handicap. What I'm telling people is don't be a hero.