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By Root 347 0

than anyone on the planet had been a negligible corner of the capital markets. In just a few years it had somehow become the most powerful engine of profits and employment on Wall Street--and it made no economic sense. "It was like watching an unthinking machine that could not stop itself," he said. He felt as if he had moved into a new house, opened the door to what he presumed was a small closet, and discovered an entirely new wing. "I'd been to equity conferences," said Eisman. "This was totally different. At an equity conference you're lucky if you get five hundred people. There were seven thousand people at this thing. Just the fact that no one from the equity world was there told you that no one had figured it out. We knew no one. We still assumed we were the only ones who were short."

He had no interest in listening to other people's speeches. He had no interest in attending the panel discussion and hearing the potted remarks. He wanted private sessions with market insiders. Lippmann had introduced them to the people inside Deutsche Bank peddling CDOs to investors, and these helpful Deutsche Bank people had arranged for Eisman and his partners to meet the bond market's financial intermediaries: the mortgage lenders, the banks that packaged the mortgage loans into mortgage bonds, the bankers who repackaged the bonds into CDOs, and the rating agencies that blessed the process at each stage. The only interested parties missing from the conference were the ultimate borrowers, the American home buyers, but even they, in a way, were on hand, serving drinks, spinning wheels, and rolling dice. "Vegas was booming," said Danny. "The homeowners were at the fucking tables." A friend of Danny's returned from a night on the town to report he'd met a stripper with five separate home equity loans.*

The Deutsche Bank CDO salesman--a fellow named Ryan Stark--had been assigned to keep an eye on Eisman and prevent him from causing trouble. "I started getting these e-mails from him, before the conference," said Danny. "He was nervous about us. It was like, 'I just want to clarify the purpose of the meetings,' and, 'Just to be clear why we're meeting...' He wanted to make sure we knew we remembered that we were there to buy the bonds." Deutsche Bank had even sent along the formal handouts intended for subprime buyers, as a kind of script for them to follow. "The purpose of the conference is to convince people it's still okay to create and to buy this shit," said Danny. "It was unheard of for an equity investor looking to short the bonds to come in and scope the place out for information. The only way we got these one-on-one meetings was by saying that we weren't short. Deutsche Bank escorted us, to make sure we didn't blow up their relationships. They put a salesman in the meeting just to monitor us."

There was of course no point in trying to monitor Eisman. He saw himself as a crusader, a champion of the underdog, an enemy of sinister authority. He saw himself, roughly speaking, as Spider-Man. He was perfectly aware of how absurd it sounded when, for instance, his wife told people, "My husband thinks he and Spider-Man are living the same life." Eisman didn't go around telling strangers about the shocking number of parallels between himself and Peter Parker--when they had gone to college, what they had studied, when they'd married, and on and on--or that, by the time he was in law school, he was picking up the latest Spider-Man comic half expecting to discover in it the next turn his life would take. But Eisman was quick to see narratives, he explained the world in stories, and this was one of the stories he used to explain himself.

The first sign that Spider-Man had no interest in Deutsche Bank's dark dealings came at a speech that morning, given by the CEO of Option One, the mortgage originator owned by H&R Block. Option One had popped onto Eisman's radar screen seven months earlier, in June 2006, when the company announced a surprising loss in its portfolio of subprime mortgage loans. The loss was surprising because Option One was