Steve Eisman add new short positions against the UK banks

Steve Eisman added to his position against some UK banks.

"Nobody has a freaking clue. The situation is so fluid that it will be foolhardy to take a large position either way. "said Eisman, who in 2008 correctly predicted the collapse of the US property market.

Eisman’s bets against the housing market before the 2008 financial crisis were chronicled in Michael Lewis’s 2010 book “The Big Short,” which showcased money managers who foresaw and profited from the market turmoil. A character based on him was played by Steve Carell in the movie of the same name.

The money manager, who manages long-term cash pools for Neuberger Berman, does not specify the banks in which he is taking additional short positions but said his entire UK exposure was only 6% of his entire portfolio.

Its bigger short stakes are in Canada, where it is approximately a quarter of the fund's capital against financial firms because of the prospect of losing mortgage portfolios.

"Nobody can have a long-term view about the health of the U.K. economy if there’s a Brexit," he said. However, he added that investors in the UK are expecting a recession if Brexit becomes a reality.

Eisman added that Prime Minister Theresa May is unlikely to get any EU concessions that Parliament will accept, and extending the deadline for Brexit is a more likely scenario.

"I suspect we will be talking about Brexit at least in the summer," he said.

If we follow Eisman's logic, the deadline for Brexit's decision will be stretched at least until summer, suggesting new insecurity among investors. This, in turn, is likely to lead to a new instability in the British pound, which is currently at a fairly redeemed level, and we can look for positioning, but only after appropriate confirmation of the graphs.

Source: Bloomberg Finance L.P.
Photo: Used with permission of Bloomberg Finance L.P.

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