Steve Eisman's Masterclass on the 2008 Financial Crisis (Part One) | The Real Eisman Playbook Ep 38

The podcast explores the causes and consequences of the 2008 financial crisis, particularly focusing on the role of leverage and subprime mortgages. It argues that excessive leverage in financial institutions, incentivized by compensation structures and the risk-weighted asset concept, was a primary driver. The episode details how banks, encouraged by rating agencies, loaded up on low-risk-weighted assets, leading to increased leverage and ROEs. The subprime mortgage sector is examined, highlighting the deterioration of underwriting standards and the exploitative nature of teaser rates and refinancing practices. The host also shares his experience of shorting subprime securitizations after identifying the rising delinquencies in 2006.