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Disruptive Forces in Investing

Steve Eisman: From The Big Short to the Long Way Home

Jun 25, 2024
Steve Eisman, a prominent investor known for foreseeing the 2008 housing market crash, shares his journey from analyst to a key player in the financial crisis narrative. He reveals critical moments leading up to the crash and discusses misconceptions in financial investments while reflecting on the behind-the-scenes creation of 'The Big Short.' Eisman explains the evolution of investment strategies and emphasizes aligning career paths with personal strengths. He also nods to the influence of early investment education, adding insights from a pioneering female investor.
20:33

Episode guests

Podcast summary created with Snipd AI

Quick takeaways

  • Steve Eisman recognized early signs of the 2008 housing market crisis, leveraging past experiences to predict the impending collapse accurately.
  • Eisman attributes current market stability to stronger regulations and healthier financial institutions, emphasizing the importance of adaptability in investment strategies.

Deep dives

Early Signs of the Housing Market Crash

In the early 2000s, significant warning signs indicated an impending crisis within the housing market. Steve Eisman, who had previously experienced the collapse of subprime mortgage companies in the late 1990s, identified patterns of risks resurfacing with a new generation of subprime lenders. By 2006, early delinquencies on securitized loans became apparent, prompting him to start shorting subprime paper as he recognized it was only a matter of time before the market imploded. His foresight and experience allowed him to predict the collapse with alarming accuracy, as he observed the market’s rapid expansion despite the deteriorating credit quality of loans.

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