YouSaid · the spoken record

Steve Eisman

lines on the record: 61
first: 2023-06-16
most recent: 2023-06-16
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“With moral hazard. Well If it had been up to me, and believe me, it was not up to me and nobody called me over that weekend, but if it had been up to me, I would have let Silicon Valley fail. And then I would have guaranteed all the deposits. And that would have solved your moral hazard problem. I mean, it's not like they guaranteed Silicon Valley and they guaranteed all the deposits and people didn't pull their deposits out of these banks. So you would have been in the same situation, but you would have solved your moral hazard problem. I actually don't know technically if the regulators even had the authority to raise deposit insurance level unless it's an emergency.”
2023-06-16 · Odd Lots · Steve Eisman on Banks, AI and His Next Big Bet · IDENTIFIED FROM THE TRANSCRIPT · source
“No way, really. First of all, the regulators will not allow JP Morgan buying First Republic is a one-off. The regulators do not want the large banks to get any bigger through M&A. Could there be mergers between regional banks? Sure. To go down to from 5,000 to 1,000, I mean, that's a lot of work. Choose your poison. In Canada, the banks are safer because they're oligopolies, but they can charge much higher fees for their customers. Here, there's a lot more competition, but because there's a lot more competition, prices are lower, but then you have problems with credit and just stability.”
2023-06-16 · Odd Lots · Steve Eisman on Banks, AI and His Next Big Bet · IDENTIFIED FROM THE TRANSCRIPT · source
“I know almost all of them. You know, these are the people who traffic in largely the financials for 20 years. And, you know, it's not like we go on vacation together, but we know each other In fact, we don't go on vacation together.”
2023-06-16 · Odd Lots · Steve Eisman on Banks, AI and His Next Big Bet · IDENTIFIED FROM THE TRANSCRIPT · source
“I mean, there's always a trade. The banks are very, very cheap on a price to book. They're very, very cheap on earnings. The problem is that because of the money leaving the banks into money market funds, it's more likely than not and estimates are too high. Longer term, if big if we go into recession, we'll have a credit cycle. And I mean, the joke amongst the people, you know, what I call the financial services mafia is the banks have collapsed and we haven't even had a credit cycle yet. If I'm not going to tell you. Okay.”
2023-06-16 · Odd Lots · Steve Eisman on Banks, AI and His Next Big Bet · IDENTIFIED FROM THE TRANSCRIPT · source
“Big enough. As I always said long time ago. When JP Morgan goes down, planet Earth burns. When Silicon Valley goes down, it's a match, you know, like a match, you know.”
2023-06-16 · Odd Lots · Steve Eisman on Banks, AI and His Next Big Bet · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, I mean, what happened during the pandemic was the banks. were flooded with liquidity. And so what's happening now is people are, but what were you going to do, earn $25 basis points of money market funds is sort of pointless. So now I don't know if any of you noticed, but if you want to buy a three-month treasury, you make 5.4%. That's not bad. So people are taking their money out of the bank and putting it into money market funds. So what's happening is the regional banks are really pulling in their horns in terms of lending. Do I think that If the Fed keeps raising rates, that will accelerate? Maybe. But a lot of it's happened already.”
2023-06-16 · Odd Lots · Steve Eisman on Banks, AI and His Next Big Bet · IDENTIFIED FROM THE TRANSCRIPT · source
“There's absolutely no question that the investment community knew what the losses were on Silicon Valley's portfolio to the dollar.”
2023-06-16 · Odd Lots · Steve Eisman on Banks, AI and His Next Big Bet · IDENTIFIED FROM THE TRANSCRIPT · source
“The problem was they don't read the research. If they read the research that's out there, they would have known the losses to the dollar. But it's been my experience that regulators don't read Wall Street research and they try and find it out on their own. It's a lot easier just to read the research. Trust me.”
2023-06-16 · Odd Lots · Steve Eisman on Banks, AI and His Next Big Bet · IDENTIFIED FROM THE TRANSCRIPT · source
“And the rest is history. Thank you, Peter Thiel, for causing a panic. And the next morning, they were done. That was essentially the story. So after that, everybody, you know, basically started shorting every single bank that had the same characteristics as Silicon Valley Signature, which went that same weekend, First Republic, Pac West, Western Alliance. Obviously First Republic is gone. Probably this partis is largely over. There's a problem with the earnings of the banks, but I don't think it's unlikely, I think, at this point that anybody else is going to go under.”
2023-06-16 · Odd Lots · Steve Eisman on Banks, AI and His Next Big Bet · IDENTIFIED FROM THE TRANSCRIPT · source
“And gave great service. And so when rates were at the bottom, they bought long-term bonds at subterranean rates. The Fed starts raising rates. Who knew? And all of a sudden they have massive mark-to-market losses in their portfolio, which if essentially wiped out their equity. But that's not enough because you could always hold the bonds to maturity unless you got to sell the bonds. So if you remember last year, the stocks that were down the most were the companies that had high revenue growth and negative earnings. They were down anywhere from 75 to 90 percent. That characteristic is the same thing as venture capital companies. So venture capital couldn't raise any more money. The venture capital companies had to pull their deposits out of the bank. Eventually Silicon Valley ran out of liquidity. They sold their bonds.”
2023-06-16 · Odd Lots · Steve Eisman on Banks, AI and His Next Big Bet · IDENTIFIED FROM THE TRANSCRIPT · source
“So, if I could sum it up in like a sentence because it's always pretty good to try and sum it up in a sentence, I'd say we're not having a banking crisis, we're having a crisis of certain banks Like a really good frickin' line so. Pay attention. I mean, the saying goes the generals always fight the last war. The last war was credit quality and capital, which that problem was solved. The problem with Silicon Valley was that the correlation between all their depositors was essentially one. In other words, they were all the same. It would be as if you had one depositors with $550 billion in the bank. And what happened was Silicon Valley had a very simple business model. They just took in deposits from VC and they bought bonds. That was it. They made very few loans.”
2023-06-16 · Odd Lots · Steve Eisman on Banks, AI and His Next Big Bet · IDENTIFIED FROM THE TRANSCRIPT · source