WEBVTT - Neuberger Berman Group’s  Steve Eisman Talks Technology Stocks

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news.

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<v Speaker 2>Well about I think about fifty to sixty percent of

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<v Speaker 2>CI debt is held by the CNBS market, So that's

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<v Speaker 2>an investor problem. That's not my problem, that's somebody else's problem.

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<v Speaker 2>And then maybe forty percent is held by banks. Very

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<v Speaker 2>little of that is held by large banks as a

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<v Speaker 2>percentage of their of their assets. You know, some regional

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<v Speaker 2>banks have significant risk, and it's a problem, but you

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<v Speaker 2>know they're able to pull shtick, you know, as we

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<v Speaker 2>always like to say, maybe there's a rolling loan catches

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<v Speaker 2>no loss. I mean, they just roll it until they

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<v Speaker 2>can't roll it anymore. So, you know, commercial real estate

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<v Speaker 2>is a problem that's sort of glacial in that way.

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<v Speaker 2>You know, they'll be restructurings. Banks will have issues, some

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<v Speaker 2>regional banks, I mean, and I don't know if any

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<v Speaker 2>regional banks will go under or not. But it's not

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<v Speaker 2>a systemic It's not just not a systemic issue.

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<v Speaker 3>If I think about the biggest problems facing us. Unfortunately,

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<v Speaker 3>I know that you don't care that much about the

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<v Speaker 3>federal deficit and debt. But how calm, like if we're

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<v Speaker 3>billion dollars a month in servicing costs.

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<v Speaker 2>I'm gonna take on my violin.

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<v Speaker 3>Okay, but more than the military, okay, sometimes so can

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<v Speaker 3>I can.

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<v Speaker 2>I like to take a couple of Number one, I'm

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<v Speaker 2>gonna I'm gonna put you in the camp of what

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<v Speaker 2>I like to call the OI, the deficit crowd.

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<v Speaker 3>Yes, I'm there, I'm ready, You're there, Me and Lisa.

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<v Speaker 2>I'm not an economist, but I understand arguments, and literally

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<v Speaker 2>every single word that people are uttering about the deficit

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<v Speaker 2>today has been uttered by somebody for forty years now.

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<v Speaker 2>In my business, being too early is being the equivalent

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<v Speaker 2>of being wrong. But I've been he too early. I've

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<v Speaker 2>been two years to early. I've been forty years too early.

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<v Speaker 2>So clearly that it's more complicated than the deficit people

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<v Speaker 2>like to say, you know, is there a point where

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<v Speaker 2>it becomes an issue? Sure, but you know how you'll

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<v Speaker 2>know instead of on a day like today where the

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<v Speaker 2>ten year is down, how many basis points is it?

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<v Speaker 2>Do just eleven? You'll walk in and it'll be up

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<v Speaker 2>fifty and you'll say, oh, you're the deficit, and then

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<v Speaker 2>it'll be relevant exactly.

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<v Speaker 3>This is exactly the same as housing, right.

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<v Speaker 2>You know, forty years forty years long time. It's really

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<v Speaker 2>just a very, very long and the argument as to

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<v Speaker 2>why I think it's just not that relevant. Excuse me

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<v Speaker 2>my ear piece, you don't need you, is that it

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<v Speaker 2>has to be that the fear about the deficit causes

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<v Speaker 2>people to start to walk away from the dollar. That's

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<v Speaker 2>the feedback loop. So let's think about that for a second.

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<v Speaker 2>Why is the dollar the reserve currency of the world.

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<v Speaker 2>It's actually very simple. Big money has to park its

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<v Speaker 2>money somewhere, and they're only going to park it in

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<v Speaker 2>the most liquid, safest bond market in the world, and

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<v Speaker 2>that's the US government bond market. Until there's actual replacement,

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<v Speaker 2>the US dollar will be the reserve currency of the world.

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<v Speaker 2>And what you're talking about is just going to be academic.

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<v Speaker 2>It's not China, it's not Europe. You know, no offense

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<v Speaker 2>to all your crypto people, it's not going to be crypto.

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<v Speaker 2>So until somebody can show up and show me some

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<v Speaker 2>replacement for the US government bond market, I'm just not concerned.

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<v Speaker 1>And it remains to be seen if that will happen

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<v Speaker 1>in the next forty years. But before we get there,

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<v Speaker 1>I do want to talk about the state of shorting.

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<v Speaker 1>Of course, you were in the Big Short Steve Carell

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<v Speaker 1>played you great movie, But it feels like this on.

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<v Speaker 2>My tombstone already, by the way it's carved in.

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<v Speaker 1>But in any case, it feels like the state of

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<v Speaker 1>shorting in this market. This just feels like an environment

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<v Speaker 1>where companies won't die. And you see these high valuation,

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<v Speaker 1>high flying stocks, and it just feels like there's a

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<v Speaker 1>lot of temptation out there to short. But how are

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<v Speaker 1>you thinking about short selling?

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<v Speaker 2>I don't shure it for clients at all. I short

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<v Speaker 2>any bitty little bit for myself once in a while.

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<v Speaker 2>I mean, what I would say to people is number one,

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<v Speaker 2>a couple of rules about shorting. Shortening of stock purely

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<v Speaker 2>because you think it's expensive is a death wish. You

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<v Speaker 2>have to have a fundamental reason to be short of stock.

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<v Speaker 2>You know, isn't vity expensive? I mean, yeah, it's expensive,

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<v Speaker 2>but earnings have tripled, so you know, you could have

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<v Speaker 2>made that argument a year or so ago and then

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<v Speaker 2>earnings doubled or triple whatever they did. So look, I

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<v Speaker 2>think the economy is fine. Is it slowing to a

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<v Speaker 2>little bit? It sure, our delinquencies up a little bit

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<v Speaker 2>in consumers, Okay, but there's no fundamental case to be

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<v Speaker 2>massively short things. I mean, are other individual stories. Maybe

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<v Speaker 2>you could short here and there. Sure, but but to

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<v Speaker 2>go after you know, the market, I think it's insanity.

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<v Speaker 3>But you know we have the DOJ going after short sellers.

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<v Speaker 3>I mean, don't they serve an important person.

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<v Speaker 2>To serve an important purpose. I don't understand whether the

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<v Speaker 2>do goes after short sellers.

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<v Speaker 1>The other thing to it, I believe you were one

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<v Speaker 1>short Tesla for a certain amount of time too.

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<v Speaker 2>What would the lessons learned there?

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<v Speaker 1>Because you've seen so many people get squeezed on trying

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<v Speaker 1>to short that stock in this market.

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<v Speaker 2>I've been shortened, I haven't been shorted. It's a look

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<v Speaker 2>you can. I think you get at times short tesla

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<v Speaker 2>when the fundamentals are deteriorating, and then then people stop

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<v Speaker 2>focusing on the fundamentals and they start talking about, you know,

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<v Speaker 2>the dream of auto taxis or AI or whatever, and

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<v Speaker 2>then then it becomes impossible. So Test is not a

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<v Speaker 2>stock to be short long term at all.