Famed hedge fund investor Steve Eisman, famous for predicting the 2008 financial crisis, now appears to be two-for-two.

In an exclusive interview with Daily Mail, hours before President Donald Trump announced a pause on new global tariff hikes, Eisman said he expected 'cooler heads to prevail'.

At least for the time being, they have.

On Wednesday, shortly after harsh 'reciprocal tariffs' hit dozens of US trade partners, Trump reduced rates to 10 percent for a period of 90 days to allow for negotiations.

The Dow Jones Industrial Average surged nearly 8 percent on the news. The Nasdaq surged 12 percent and the S&P had its best day since 2008. 

Speaking to Daily Mail following the historic rebound in US equities, Eisman was nonplussed – and reluctant to blow his own horn.

'There's two possibilities,' said Eisman of Trump's surprise shift. 'He saw the stock market was going down, so he decided to back off. Or he, basically, gave everybody a preview of what he's capable of and now he's going to sit down in a more relaxed environment and negotiate. Maybe, it's a combination of the two.'

Now, Eisman, host of the podcast The Eisman Playbook, tells the Daily Mail that – to him – the way forward for America's trading partners is clear. They should come to Washington to cut a deal because 'the US is the most important market in the world and every country needs access to it.'

In an exclusive interview with Daily Mail, hours before President Donald Trump announced a pause on new global tariff hikes, Eisman said he expected 'cooler heads to prevail'.

Only 11 percent of US gross domestic product (GDP) comes from exports. Conversely, Eisman estimates that up to 30 percent of China's GDP – after accounting for all the products that the Chinese government channels through other countries to dodge US tariffs – is generated from exports. 

The economies of major European countries – like the United Kingdom, France and Germany – are also similarly reliant on export sales to US consumers.

In short, the world needs the US markets worse than the US needs their products. 

According to Eisman, it only makes sense for these countries to negotiate with Trump, if they're acting rationally. 

That's a big if.

'Politicians want to get re-elected, maybe they're worried that if they work out a deal, they'll lose their jobs,' he said. 'One of the things about economics is the assumption that people act rationally. One thing is damn sure: they act rationally sometimes and they act irrationally other times.'

Perhaps world leaders should remember that nearly two decades ago, they should have been listening to Eisman.

After sounding the alarm about the state of the US housing market in 2007, his hedge fund FrontPoint Partners took a massive position against subprime prime mortgages. 

The rest is history.

The bottom fell of the housing market, triggering a global financial crisis – and Eisman's firm made an estimated $1 billion. 

Author Michael Lewis wrote a book about Eisman and others, titled The Big Short. Actor Steve Carell played Eisman in the 2015 film of the same name.

Now, Eisman sees stunning parallels between the 2008 financial crisis and events playing out on Wall Street today. In both instances, so-called financial experts behaved in ways that did not necessarily make logical sense.

Author Michael Lewis wrote a book about Eisman and others, titled The Big Short. Actor Steve Carell (above, left-center) played Eisman in the 2015 film of the same name.

'[In 2007] my partners and I had a meeting with the head of research of asset-backed securities at Bear Stearn,' recalled Eisman. 'He basically said housing prices in the United States have never gone down on a national level since World War II. And I looked at him, and I said, "Is that a law of physics?"'

'It wasn't a law physics,' Eisman quipped, 'Housing prices went down 30 percent nationally.'

The 'paradigm' today, said Eisman, is that world economies must be managed by the rules of a college economics textbook: 'We all took Econ 101. They taught you that free trade is good, tariffs are bad.'

That is true, in an academic sense, explained Eisman, but Econ 101 cannot account for the unintended consequences of international trade and globalization – and, specifically, the decimation of American industry and a terrible human fallout.

Low and middle-income Americans 'didn't just lose their jobs, their communities got obliterated,' Eisman said, remembering how he travelled the US on a speaking tour following the release of Big Short and saw how his fellow countrymen lived.

'You would find towns where at least half of Main Street is boarded up. Towns where it was very clear that the housing stock was incredibly old and new homes hadn't been built over a generation,' he said.

'These tariffs are an attempt, I would say, to right a wrong. And I have a lot of sympathy for it.' 

Of course, not everyone shares that sentiment.

'I watch CNBC, I watch Bloomberg. The people are like borderline hysterical,' he said. 'Nobody likes losing money in the stock market… but the reason why they're hysterical is that the most jarring thing that people can ever experience is when their paradigm blows up.'

'They don't understand how there could be a president of the United States who doesn't seem to believe in the paradigm that's so obvious to everybody else.'

Eisman observed that when industries crumbled many were forced to rely on government assistance – others fell into addiction.

Eisman believes Trump is attempting to help by renegotiating trade agreements and, perhaps over time, restoring American manufacturing: 'Maybe you could reshore some textiles, you could reshore some real machinery and industrial stuff, it would go a long way.'

'We didn't just let them down, we let them die. They're Americans, they're Americans too,' said Eisman, the emotion building in his voice. 

He faults the US government, not for pursuing a policy of globalization, but for failing to develop policies to help the millions of people left behind while US GDP grew. 

Eisman believes Trump is attempting to help by renegotiating trade agreements and, perhaps over time, restoring American manufacturing: 'Maybe you could reshore some textiles, you could reshore some real machinery and industrial stuff, it would go a long way.'

'If you don't give a s*** about the people who lost their jobs, there's nothing I could say that would ever convince you because all you want to do is make money in the stock market,' he concluded. 

But, if you were interested in trying to make good with the Americans who lost – even as the rest of the country won – over the last few decades, then you do what Trump is doing, he said.

Whether the president can pull it off is another question entirely.

And Eisman is not willing to bet on that.