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carl icahn

Carl Icahn.REUTERS/Chip East

  • Carl Icahn expects stocks to tumble, inflation to linger, and the US economy to suffer more pain.

  • He built a Twitter stake before Elon Musk’s bid, and might have put $1 billion behind it if asked.

  • Icahn teased past bets against crypto, and said he wasn’t surprised by FTX’s collapse.

Carl Icahn warned the stock market’s epic rally won’t last, called on the Federal Reserve to keep hiking interest rates until it breaks the back of inflation, and issued a grim outlook for the US economy in a recent CNBC interview.

The billionaire investor and Icahn Enterprises chairman also revealed he’s betting against the S&P 500, may have shorted cryptocurrencies in the past, and might have put $1 billion behind Elon Musk’s Twitter bid if the Tesla CEO had asked him.

Here are Icahn’s 14 best quotes, lightly edited for length and clarity:

1. “I am still quite bearish on what is going to happen. A rally like this is of course very dramatic to say the least, but you have them all the time in a bear market, and I still think we’re in a bear market.”

2. “Whenever you have higher interest rates that have moved as they have here, you have an inverted yield curve, Treasuries at close to a 5% yield — you are going to have a recession. And I think we do have a recession already.”

3. “There’s a way to go down because inflation is not going away for the near term, and you’re going to have more of a recession, more of an earnings decrease.” (Icahn was discussing the outlook for stocks.)

4. “I don’t think the inflation is over. If I look through the ’70s, it took years and years and years — you can’t wave a magic wand and get the inflation over with.”

5. “The Fed has to keep raising. If it doesn’t, then it’s going to be worse for the future. They have to cure this inflation. It’s not something where you just take a magic pill and get rid of it.”

6. “There’s a lot of things that have to happen to turn this economy around, to get us out of a recession.” (Icahn flagged several headwinds including continued wage inflation, and the blow to household wealth from stocks and home prices dropping.)

7. “I’m short the S&P 500. The S&P has got a lot of tech stocks that are too high for the most part. I think that with high interest rates, they’re not worth what they’re selling for.”

8. “A lot of people called me about it and wanted me to do something about it as an activist. I was gearing up and looking at it. The stock went down a little bit, so I was starting to buy stock. I thought I would try to get on the board of it.” (Icahn was referring to Twitter.)

9. “I was really happy that Musk came along. He stood for the same damn thing, and he’s a lot richer than I am. I felt that he was the perfect guy for doing it. And he didn’t need the money.” (Icahn shared Musk’s concerns that Twitter was restricting users’ freedom of speech on its platform.)

10. “Nobody ever called me to go in. I might have done it if he called me. I might have put $1 billion in it, at the right price.” (Icahn was asked whether he was invited to join Musk’s $44 billion bid for Twitter.)

11. “I think it could spill over.  This is only one of the dangers you have in our economy.” (Icahn was discussing the implosion of Sam Bankman-Fried’s digital-asset exchange, FTX, and the crypto selloff it sparked.)

12. “I’m a smart guy. I tried to figure out the crypto and why it was valuable, but I could not understand what it really had to offer. So I never bought any crypto. In fact, I might have shorted it once or twice.”

13. “If you look at crypto, you look at ethereum, you look at these companies. What do you do if you don’t like the way it’s being managed? It’s a lawless area. There was no accountability that I could see, and I still don’t see it.”

14. “I’m not surprised that this happened because there really are no rules, no laws. It’s like the Wild West.” (Icahn was referring to FTX.)

Read more: America’s biggest wealth manager explains why he’s telling clients that going all-in on stocks is the right move to make now — and why real estate investing is still a no-go

Read the original article on Business Insider