Steve Eisman says Canadian financials are his new ‘biggest short'

Peter Vercoe and Yvonne Man, Bloomberg News

A logo sits illuminated on a new Deutsche Bank AG office building in Frankfurt, Germany, on Monday, Nov. 6, 2017. Demand for offices in Frankfurt and prime rents have climbed to a record as the city emerges as one of the favorites to attract financial firms from London in the run-up to the U.K.’s exit from the European Union, according to lobby group Frankfurt Main Finance. , Bloomberg/Bloomberg

Steve Eisman, the Neuberger Berman Group money manager who famously predicted the collapse of subprime mortgages before the 2008 financial crisis, says Canadian financial companies are his biggest short.

When asked in a Bloomberg Television interview in Hong Kong on Monday what his biggest short play would be right now, Eisman’s first answer was “short Canadian financials.”

“The United States is in far better shape than it was,” he said. “I would say Europe is better, but not good enough. I think Canada is okay, but I think Canada is going to have some issues with their housing market.”

He also recommended shorting Deutsche Bank AG shares and reiterated that he is still short Wells Fargo & Co.

“Deutsche Bank has real profitability issues,” Eisman said. “Deutsche Bank is a problem bank. I think it has to shrink dramatically,” adding that the “undercapitalized” bank will probably raise capital next year.

The investor’s early bets against the housing market before the 2008 crisis were chronicled in Michael Lewis’s 2010 book “The Big Short,” which highlighted money managers who profited from the market turmoil. Eisman joined New York-based Neuberger Berman after closing his hedge fund Emrys Partners in 2014.

- With files from BNN Bloomberg