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Don't look for a sequel to 'The Big Short' anytime soon

  • Steve Eisman successfully shorted big banks ahead of the 2008 financial crisis.
  • Now he doesn't see enough leverage for a systemic problem.
  • "I've lived through the big short. I'm in no rush to do it again," he says.

Steve Eisman, whose bet against the highly leveraged banking system was chronicled in "The Big Short" book and movie, doesn't see any risks of that magnitude to any part of the U.S. economy on the horizon. In fact, Wall Street is so healthy now, Eisman is buying bank stocks.

"There's no big short in my view. There are sector shorts; there are stock shorts. This is back to a stock picker's market," Eisman said late Monday on CNBC's "Fast Money." "I think there are plenty of shorts in this market. It's just not a systemic problem."

Ahead of the financial crisis of 2008, Eisman was one of a handful who bet against big Wall Street banks for their holdings of bad mortgages. From the beginning of his career in the early '90s, the analyst had "a special talent for making noise and breaking with consensus opinion," Michael Lewis wrote in his book "The Big Short."

Now a fund manager at Neuberger Berman, Eisman is standing out these days for his lack of concern. He's seeing better fundamentals in the financial system than those currently worried about investor complacency and high levels of debt.

Steven Eisman, senior portfolio manager at Neuberger Berman
Katie Rooney | CNBC
Steven Eisman, senior portfolio manager at Neuberger Berman

Eisman pointed out that it took 10 years from 1997 to 2007 for leverage in the financial system to quadruple to unsustainable levels. One decade later, "we're just at the end of the deleveraging process," he said on CNBC.

"I do believe this administration is going to allow for more leverage to come back into the system. But we have so far to go for that to be a systemic problem that it's not something I'm particularly worried about," Eisman said.

Some on Wall Street increasingly worry that too low volatility amid stocks at record highs — led by high-flying technology names with questionable valuations — sets the stage for the aging bull market to finally end.

'Mercury to Pluto'

Among worries currently within the banking system, investors see reason for concern with rising defaults on auto loans.

Eisman does see problems in subprime auto loans — lending to individuals with low credit ratings — as well as mall operators and the apartment industry. But to him, none of those rise to the scale of the financial crisis and can be contained. Worries about student loans also amount more to a government and taxpayer problem, rather than Wall Street's, Eisman said.

He noted that Citigroup was once leveraged at a ratio of 35 to 1, but that ratio is now down to 10 to 1. "That's like discussing the distance from Mercury to Pluto," he said. "There's no one alive today who was alive when Citigroup was levered 10 to 1. That's how much leverage has come down."

His investment picks right now include buying Amazon.com, Facebook and the bank stocks. He also sees opportunities to buy in housing, which he said "is pretty strong."

Of his few bets against a stock, Eisman is short Simon Property for what he calls "overwhelmingly powerfully negative" trends in retail.

To be sure, some analysts also point to nonfinancial issues that could become problems for the market. The North Korean nuclear threat, a sharp slowdown in China's economy and increased political discord could disrupt the status quo.

But Eisman has personal reasons not to jump so readily onto the bandwagon of hand wringers:

"I've lived through the big short. I'm in no rush to do it again."

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