Steve Eisman: I’ll short Britain if Corbyn gets in

Steve Eisman made his name as one of the few investors to both predict and profit from the US subprime mortgage crisis. He featured in Michael Lewis’s best-selling book on the crisis, The Big Short, and was played by actor Steve Carell (under the pseudonym Mark Baum) in the film adaptation. So it’s a little concerning that he has placed his latest big bet against the UK economy.

Eisman is currently shorting two British banks (ie he is betting on their share prices falling – for more on that, see our financial glossary). That’s because he has two major concerns about the UK economy, he tells Bloomberg. First, there’s Brexit. He is worried the UK will negotiate an exit from the European Union, but that parliament will then reject the deal. However, there’s another political issue that worries him a lot more.
“I’m shorting two stocks in the UK, but 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. Corbyn’s a Trotskyite… you don’t want to be invested in the UK if a Trotskyite is prime minister.” Eisman didn’t name the bank stocks that he’s shorting, although Bloomberg points out that the most-shorted banks listed in the UK are currently Metro Bank and CYBG. The newswire also acknowledges that Eisman’s previous bets against banks have not necessarily matched his subprime performance – about a year ago, Eisman suggested shorting US bank Wells Fargo which was embroiled in a mis-selling scandal. Since then the shares “have been little changed.”