'Big Short' investor who foresaw 2008 crash warns against 'Trotskyite' Corbyn government

Alexandra Rogers
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Eisman declined to say which two UK banks he was shorting (Source: Getty)

A US investor who predicted the financial crash has said he could be impelled to short up to 50 UK firms if "Trotskyite" Jeremy Corbyn becomes Prime Minister.

Steve Eisman, who is the subject of Oscar-winning film The Big Short, said the UK was one of the biggest risks he was watching as it negotiates its exit from the European Union.

Eisman said he was shorting two UK banks among his investments but could be persuaded to short "all 50 if I think Jeremy Corbyn is going to be Prime Minister".

Speaking at a conference in Dubai, Eisman said: “I’m shorting two stocks in the UK, but I’ve got a screen of about 50, and I might short all 50 if I think Jeremy Corbyn is going to be prime minister.

“Corbyn’s a Trotskyite. Now I know my Trotskyites well and I know you don’t want to be invested in the UK if a Trotskyite is prime minister.”

Eisman was one of the few investors to bet against the adjustable-rate subprime mortgages that were at the heart of the financial crash.

The investor also repeated that he is still shorting Elon Musk's electric car maker Tesla, despite its positive performance in October.

Tesla has been mired in controversy over the summer after its controversial chief executive released a series of tweets that suggested he had secured funding to take the company private at $420 per share.

The outburst prompted the US Securities and Exchange Commission (SEC) to investigate Musk over claims his tweets may have amounted to market manipulation. He settled the lawsuit by agreeing to step down as chairman and by paying a $20m (£15m) fine.

Musk's woes were compounded on Friday when Tesla was hit with a subpoena from the SEC over his company's production estimates relating to the Model 3.

Tesla said in a statement: “Should the government decide to pursue an enforcement action, there exists the possibility of a material adverse impact on our business, results of operation, prospects, cash flows, and financial position."