Episode summary
Big Short Reunion w/ Danny Moses: Rising Rates, AI & Private Equity | The Real Eisman Playbook Ep 80
The Real Eisman Playbook
· · 40 min · Hosts: Steve Eisman · Guests: Danny Moses
Summary
Danny Moses argues that higher rates are likely to stay with us longer because neither the Fed nor Treasury can really overpower the market. He says Treasury’s efforts to influence the long end are mostly symbolic, and that the combination of persistent inflation, large deficits, and massive debt issuance makes the current rate regime feel more secular than cyclical. He also warns that housing is vulnerable because mortgage rates around 7.5% are too high for broad affordability, while stock-market wealth has become more important to the economy than home equity.
The conversation then turns to AI, where Moses sees a real secular story but also a familiar capex bubble dynamic. He compares today’s spending surge to the fiber-optic boom of 1999-2000 and to the warehouse-line financing structure that fueled subprime mortgages, arguing that Wall Street lending to AI infrastructure and private credit vehicles could create the same kind of fragility if demand or financing conditions weaken. He points to concentration risk at Nvidia and says some names, like CoreWeave, look especially exposed.
Moses is similarly cautious on private equity. He says the model worked best in a low-rate world, but monetization is taking longer, leverage is higher, and retail access has expanded just as institutions are becoming more wary. He closes by saying the U.S. deficit is concerning, but the reserve-currency status of the dollar gives policymakers more room than France or the U.K. had in their recent bond-market stress.
Key takeaways
- Danny Moses thinks Treasury and the Fed can influence rates only marginally because the market is too large and transparent.
- Moses says housing is under pressure because 7.5% mortgage rates and slower transactions are weighing on affordability and activity.
- Moses sees the AI trade as real but increasingly crowded by debt, capex and concentration risk, especially around Nvidia and CoreWeave.
- Moses argues private equity’s low-rate, leverage-heavy model is under strain because exits and monetizations are taking much longer.
- Moses remains concerned about the U.S. deficit, but says reserve-currency status makes a French-style crisis less likely for now.
Notable quotes
“Nobody's bigger than the market itself. Doesn't matter if it's the Fed trying to control the short end or if Treasury trying to control the long end”
“I agree that the level of underlying rates is going to be higher longer”
“I think the private equity business is going to go through a a long period of very troubled times”
How the episode opens
Hi, this is Steve Eisman and welcome to another episode of the real Eisman playbook. I'm really pleased to say I have a recurring guest, an old friend, former partner from my big short days at Frontpoint and who is now also a podcaster, Danny Moses, who runs a podcast called On the Tape. Danny, welcome back.
Great to be here. Steve, you're now lapping me in the podcast arena, just so you know. You went from zero to 60. I'm still stuck at 20, but thank you for asking. — Thank Thank you. — So, you run a podcast called On the Tape. Y
Tell us a little bit about some of your guests, things that have been happening on your podcast that that are of interest. — Yeah, so I have guests from various fields. Some are technicians, some are strategists. We just had um RPetti from Erggo who does geopolitical consulting whose clients are sovereign wealth funds, hedge funds, governments, corporations. Really, really enlightening. Um, and part of the offering for on the tape now also includes our substack. What do we do in contrarians at the gate and just this week
Which you work out with Porter Collins and Vincent Daniel who you obviously know very well. You had them on a couple weeks ago. So now it's kind of all blended together and Clear Street is now sponsoring. — Who's Clear Street?
They're a broker dealer on Wall Street that's kind of grown over the last few years and their service offering is really catering to all every type of investor. — Okay. — And they do lending. They're clearing everything. And so we're excited to partner with them. We're going to be doing events with them. But I bring that up because it's now kind of all coming together.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- ai trade
- rising rates
- private equity monetization
- ai debt issuance
- housing market
Watch the episode
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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