New York (AFP)

From the trade war to the next US presidential election, there is so much that can affect the economy that it is "hard to predict now" when the next recession starts, says Steve Eisman, an investor best known for to have anticipated the financial crisis of 2008.

He had then bet on the collapse of the real estate market after seeing the multiplication of the failures of American households having subscribed to the now famous "subprime", these real estate loans at risk at variable rates and quickly prohibitive. His bet, bold and ultimately very lucrative, is narrated in the movie "The Big Short", released in 2015.

It is unlikely that such a cataclysm will recur, he says during an interview with AFP in the premises of Neuberger Berman, his new employer, for which he manages the fund Absolute Alpha.

This "systemic" crisis, which "nearly burned the planet", was due to the excessive indebtedness of banks and the explosion of "subprime".

"This risk no longer exists." The debt (financial institutions) is much less important in the United States and Europe, banks are better regulated, "he said.

- "100% error" -

A smaller recession is entirely possible. But the economy could just as well continue to grow slowly for several more years.

"There are too many variables to try to guess what will happen," he says.

If a crisis were to happen, Steve Eisman does not worry about households. "The quality of credit in the United States is very good, especially on the consumer side," the expert said.

On the other hand, companies that have borrowed debt from the financial markets could drink. Since banks are no longer able, because of the tightening of regulations, to hold too many assets, they will not come to the aid of companies in difficulty by buying back part of their debt, which will further reduce their value, anticipates the specialist.

With interest rates at a very low level, we can look forward to several years of low growth coupled with equally limited inflation. "Money is free, which makes many things that would not otherwise be possible," says the investor.

The current monetary policies are in his eyes "a mistake to 100%".

The Federal Reserve has relaunched the machine in early 2009 with its first quantitative easing program, called "QE1". She then brought a lot of money into the financial markets by buying debt of all kinds.

- Piketty reader -

But the following programs have failed to specifically stimulate growth, which has remained around 2% since 2010, he notes.

"The money went to the stock market and allowed companies to buy back their own securities," says the specialist.

People who can afford to have a portfolio of shares "have become even richer" while savers were affected by low interest rates, he laments.

For this man who prides himself on having read Thomas Piketty's bestseller, "Capital in the 21st Century," "the lack of redistribution of income is fundamentally what prevents growth from taking off more."

According to him, this development was already at the origin of the 2007-2009 crisis.

From the 1980s, the fruits of economic growth began to focus on a small percentage of the population.

"Rather than face the problem, politicians decided, consciously or unconsciously, to democratize credit" and allow everyone to borrow heavily, which eventually lead to the crisis of "subprime", believes there.

Today, the unequal distribution of wealth hampers growth because the propensity of wealthy people to consume is much lower than that of people with modest incomes.

If a dollar is given to 10,000 people, it will probably be spent and will create wealth, whereas if 10,000 dollars are given to one person, it will probably spend a lot less, he says as an example before concluding : "I think Americans are not sensitive enough to the very nature of this problem."

© 2019 AFP