The Real Eisman Playbook Steve Eisman's Masterclass on the 2008 Financial Crisis (Part Two) | The Real Eisman Playbook Ep 39
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Dec 23, 2025 Steve Eisman dives deep into the 2008 Financial Crisis, revealing how excessive leverage and subprime exposure made the collapse inevitable. He explains the mechanics of credit default swaps and their role in creating systemic risk. The discussion spans the timeline of major events, from Bear Stearns to AIG's bailout. Eisman critiques the lack of accountability for Wall Street executives and reflects on the lessons learned from the recent Silicon Valley Bank failure. He also explores the future of banking amid increasing consolidation and regulatory changes.
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Why The Crisis Was Inevitable
- The 2008 crisis was inevitable once leverage, subprime volume, and bank ownership of that paper reached systemic scale.
- Credit default swaps then tied global balance sheets so tightly that failure of one large firm risked collapse of the whole system.
Meetings That Revealed Arrogance
- Steve Eisman recounts meetings with securitization heads who defended selling bad loans by saying "it's legal" and promising to repurchase failures.
- He describes feeling like he needed to take a shower after those meetings, exposing the moral rot he witnessed.
CDS: Insurance That Created Counterparty Risk
- Credit default swaps (CDS) reduce individual risk but create systemic counterparty exposure when used widely between institutions.
- Trillions of CDS contracts connected firms so densely that one failure could trigger global collapse.