- The investor Steve Eisman, played by Steve Carell in the movie “The Big Short,” says he is betting against two UK banks in the lead-up to the British exit from the European Union.
- Eisman said he could short as many as 50 UK stocks if the Labour leader Jeremy Corbyn were to come to power.
- Eisman said he expected the UK to secure an exit deal with Brussels that the UK Parliament would reject, ultimately forcing Britain out of the bloc without agreed-upon terms.
- Eisman is known for betting against the US housing market ahead of the 2008 subprime-mortgage crisis.
The hedge fund manager famous for betting against the US housing market ahead of the 2008 crash is shorting two British bank stocks in anticipation that the UK falls out of the European Union without securing an exit deal.
“I’m shorting two stocks in the UK,” he told a conference in Dubai, United Arab Emirates, over the weekend, as reported by Bloomberg. He wouldn’t name the companies.
He reportedly told the conference that he expected the UK to secure a deal with Brussels that the UK Parliament would reject, ultimately forcing Britain out of the bloc without agreed-upon terms.
Bloomberg noted that Metro Bank and CYBG, the parent company of Clydesdale Bank and Yorkshire Bank, were the two most shorted UK financial stocks.
Some 6.6% of Metro Bank’s stock is being shorted, data from Castellain Capital’s Short Interest Tracker showed on Monday morning.
Eisman said that while he was shorting just two UK stocks, that number could rise as high as 50 if the Labour Party leader Jeremy Corbyn were to become prime minister, because he believes Corbyn’s policies would be detrimental to the UK economy.
“I’ve got a screen of about 50, and I might short all 50 if I think Jeremy Corbyn is going to be prime minister,” he said.
“Corbyn’s a Trotskyite,” he added. “Now I know my Trotskyites well, and I know you don’t want to be invested in the UK if a Trotskyite is prime minister.”
Eisman was one of the protagonists in “The Big Short,” the nonfiction book by Michael Lewis about the 2008 subprime-mortgage bubble in the US. Steve Carell played Eisman in the 2015 film adaptation.
Since gaining recognition beyond the financial sphere after the book’s publication, Eisman has been a vocal market commentator, and in the past couple of years in particular he has warned frequently about the health of European banks, particularly those in Italy and Germany’s biggest lender,Deutshe Bank.
A short seller makes money by borrowing a company’s shares and selling them, with the aim of buying them back at a lower price and returning them, pocketing the difference.