Features

Steve Eisman: beware Canada's property bubble

Steve Eisman, managing director of Neuberger Berman, is worried about Canada's housing bubble; gloomy on Deutsche Bank; and sceptical of cryptocurrencies.

896_MW_P14_strategy_guru

Steve Eisman,managing director of Neuberger Berman

Digital currencies have boomed for two reasons, neither of them sound foundations for future investment: speculation and money laundering. So says Steve Eisman, the Neuberger Berman money manager famous for betting against US subprime mortgages before the 2008 financial crisis, reports The Wall Street Journal. "What value does cryptocurrency actually add? No one's been able to answer that question for me," he told the audience at the annual CFA Institute conference in Hong Kong.

Yet despite his scepticism about cryptocurrencies, he's not as worried about the global economy as he was prior to 2008. "I see risks but I don't see systemic risks," he said. Although he is still short-selling US bank Wells Fargo (a position he has had for several months), overall, he says, "I can honestly say the financial system in the US is safe". Instead, his main concern is Canadian property. "There's a housing bubble in Canada, which is starting to break." As a result, he is shorting several Canadian financial stocks.

Eisman is also gloomy about prospects for German bank Deutsche Bank, which has seen its shares slump by almost 34% in the past year. The German lender is "a problem bank", he tells Bloomberg. It has "profitability issues", which make it likely that it will have to raise capital next year, reckons Eisman. The new CEO, Christian Sewing, is slimming down its corporate finance business in the US and Asia, and will review its global equities business, notes Bloomberg. The measures will lead to a "significant reduction" in the workforce this year.

Recommended

Bondholders beware – inflation is coming, says Jeremy Siegel
Inflation

Bondholders beware – inflation is coming, says Jeremy Siegel

With vaccines promising an end to lockdowns, inflation won't be far behind, warns Jeremy Siegel, professor of finance at Wharton.
26 Jan 2021
The Arab Spring ten years on: a revolution that failed to blossom
Global Economy

The Arab Spring ten years on: a revolution that failed to blossom

Ten years ago, the Arab world was rocked by mass protests and popular uprisings that ousted long-reviled dictators. For the most part, the end result …
23 Jan 2021
The charts that matter: inflation, bubbles, and booze
Economy

The charts that matter: inflation, bubbles, and booze

As US stocks head higher into bubble territory, John Stepek looks at the charts that matter most to the global economy.
23 Jan 2021
Inflation is the easiest way out of this – just don’t expect politicians to admit it
Inflation

Inflation is the easiest way out of this – just don’t expect politicians to admit it

The UK government borrowed £34.1bn in December, a record amount for that month. Britain's debt pile now amounts to 100% of GDP. How are we going to pa…
22 Jan 2021

Most Popular

The FTSE 100 is set for a makeover with an influx of new tech stocks
UK stockmarkets

The FTSE 100 is set for a makeover with an influx of new tech stocks

The FTSE 100 – the dullest index in the world – is about to reinvent itself as a host of new firms list on the market. The change is long overdue, say…
24 Jan 2021
Why we won’t see a house-price crash in 2021
House prices

Why we won’t see a house-price crash in 2021

Lockdown sent house prices berserk as cooped up home-workers fled for bigger properties in the country. And while they won’t rise quite as much this y…
18 Jan 2021
Think Tesla is a bubble? This might be the best way to bet on it bursting
Oil

Think Tesla is a bubble? This might be the best way to bet on it bursting

The huge rise in Tesla’s share price means that, by market value, it’s now the sixth-largest company in the US and and the world’s biggest car-maker. …
25 Jan 2021