Steve Eisman, now a fund manager at Neuberger Berman Group was profiled in “The Big Short,” (as the character Mark Baum, played by Steve Carell in the film). In this morning’s interview on Bloomberg he opined that Europe still faces the risk of a financial crisis while the probability of such an event in the U.S. is very low compared with 2008. [Even if that is so, a banking crisis in Europe would infect global markets thanks to high inter-relationship and correlation between assets and institutions.]
He also explains that the asset management business from ETFs to Hedge Funds to the vast majority of funds and managers are long always and therefore offer investors, little if any ‘hedge’ or downside protection against losses. [Which is a problem, since that is precisely the risk management that is most essential to financial success in real time over full market cycles, and is often what clients think they are paying for, until prices fall and they are left holding capital losses.] Here is a direct video link.
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