Against the Rules: The Big Short Companion The Short Sellers
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Oct 21, 2025 
Steve Eisman, the astute investor and founder of FrontPoint Partners, known for his foresight in the subprime mortgage crisis, shares his riveting insights. He discusses the alarming moment he recognized fraud in the mortgage market and reflects on chaotic moments during Lehman's collapse. Eisman critiques the systemic failings in Wall Street's due diligence and questions the lack of criminal prosecutions. He also delves into current risks in private equity and the dual systems of justice stemming from the financial crisis.
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Risk Creep From Low Rates
- Greg Lippmann saw rising risk as institutions chased returns by taking ever-greater risk as rates fell and spreads tightened.
- He identified aggressive, back-ended mortgage lending as the match that would ignite a systemic crisis.
Putting The Trade On Early
- Lippmann began putting on the mortgage-short trade in fall 2005 and told his bosses it could take two to four years to pay off the losses before winning big.
- He pitched the idea to hundreds of hedge funds and raised partners to keep the trade alive while it lost money.
The Wrong-Number Breakthrough
- Lippmann accidentally reached FrontPoint while cold-calling firms to fund his ongoing losses and pay the weekly bills for the trade.
- He compared meeting those managers to encountering entertaining kids from a mixed-income summer camp.
