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Carl Icahn Warns: "Easy To Fake Earnings" Thanks To Fed; "Major Correction Coming"

Tyler Durden's picture




 

"Everybody loves this market," jokes a hursuit Carl Icahn fresh from his eBay exigencies, "everybody is buying this and buying that... we have a lot of hedges on." However, Icahn - who knows better than most just how one can financially engineer a company - says "there is reason to be cautious... a lot of the earnings are sort of artificial." While proclaiming that the Fed "did a great job in saving the economy," Icahn laughs that "with these low interest rates it's easy to fake earnings... and I don't think that can continue forever." Simply put, the billionaire activist investors concludes, you can't print money forever and "that there will be a major correction."

 

 

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Thu, 04/10/2014 - 21:49 | 4645937 LetThemEatRand
LetThemEatRand's picture

I hope ICon has a major correction.

Thu, 04/10/2014 - 22:11 | 4646018 AlaricBalth
AlaricBalth's picture

Icahn says...the Fed "did a great job of saving the economy"

I don't know of which economy Icahn speaks, but the middle class continues to get their asses kicked.

Thu, 04/10/2014 - 22:42 | 4646061 TruthInSunshine
TruthInSunshine's picture

You can bet every last herpes pustule & crustule on Icahn's genitalia that he's now massively short equity "markets."

Watch the NASDAQ continue to lead the bleed. Every stock "market"bubble pops this way in modern times.

The smart money (aka criminal insiders) have been dumping their shares onto the dumb fucks (aka pension funds & retail) for months upon months now, and with the amount of margin debt (all time high) involved in these incredibly warped "markets," it's going to be an epic sell-off by mecessity of forced liquidation.

Mr. Margin is not patient.

Fri, 04/11/2014 - 06:02 | 4646621 Occident Mortal
Occident Mortal's picture

I think you have to acknowledge that back in 2008, many people fully expected the economy to lose around 40-50% of all economic activity.

 

That didn't happen. It really didn't. The economy did not collapse. It just didn't.

 

The Fed stepped in and bailed out the rich (who got even richer) and instead of collapsing the whole economy went into terminal decline.

 

Terminal decline is better than collapse. Neither are great, but terminal decline is better than collapse.

 

So when this guy comes out and says "a great job of saving the economy", he means that the economy did not collapse as many exepected it to, a lot of economic activity survived which would otherwise have been wiped out had the commercial paper market failed in a liquidity crunch.

 

I'm not a great fan of what they did after 2008, I don't like QE. It's fundamentally evil to give free money to a primary dealer elite. I don't think there are any real benefits to having a sky high equities market. Or any asset prices being sky high for that matter.

 

It's the medicine that was prescribed AFTER the crisis that was so wrong, what they did in September 2008 was kind of amazing, they clearly had no idea what they were doing but the random stuff they did do managed to avert a total economic collapse, and of course the bankers managed to sneak though the house a couple of hundred billion for themselves in all of the panic.

 

The printing of $4 trillion since 2008 has done nothing except transfer purchasing power from people with income to people with assets. And that is exactly the WRONG direction. 

 

I think a society would be far stronger if we taxed assets instead of income. This was income would be tax free and asset prices would be a function of actual economic utility.

Fri, 04/11/2014 - 08:54 | 4646931 Kayman
Kayman's picture

 Occident Mortal

What you are saying is that cutting out the gangrene would have been too painful, so better to have a slow, morphine-dulled death.

Fri, 04/11/2014 - 10:23 | 4647312 new game
new game's picture

lossing half of you dick and still be able to fuck is better than loosing it all together.

but then again being able to fuck is less important than having freedom and liberty...

Fri, 04/11/2014 - 06:35 | 4646642 Wahooo
Wahooo's picture

Carl, I will BYFD!

Thu, 04/10/2014 - 21:49 | 4645940 nightshiftsucks
nightshiftsucks's picture

What a dipshit,we are Venezuela.I would be looking for a 400% gain in the S&P and a 400% loss in the dollar.

Thu, 04/10/2014 - 22:13 | 4646024 TheReplacement
TheReplacement's picture

I understand why you say -400% on the dollar but against what (besides raw purchasing power)?  Everyone is printing.  Until and if the Chinese implement gold backing what can you see the dollar falling against?

Fri, 04/11/2014 - 02:48 | 4646517 nightshiftsucks
nightshiftsucks's picture

I know what your saying but isn't the definition of inflation too much money chasing too few goods.If they keep printing will all of the dollars outside of the country come rushing back in ?

Thu, 04/10/2014 - 21:50 | 4645943 Groundhog Day
Groundhog Day's picture

icon man

Thu, 04/10/2014 - 21:50 | 4645944 Truther
Truther's picture

Corrected.

Thu, 04/10/2014 - 21:51 | 4645948 wrs1
wrs1's picture

That would be hirsute, not hursuit...........

Or maybe there is some humor there that escaped me.

Thu, 04/10/2014 - 22:04 | 4646002 Captain Queeg
Captain Queeg's picture

It's all shitgum under the bridge anyway.

Thu, 04/10/2014 - 22:16 | 4646032 813kml
813kml's picture

Hmmm, childish spelling error.  Could be a sign that one of the Tylers has been compromised by FOX News.

Thu, 04/10/2014 - 21:52 | 4645952 Robot Traders Mom
Robot Traders Mom's picture

I also saw Icahn say earlier about Goldman: "They're good guys..." He's a piece of shit, but I agree that nobody knows exactly whether we'll see a collapse in 3 days or 3 years. The Fed can keep things irrational much longer than we think...

 

www.TopTheNews.com 

Thu, 04/10/2014 - 21:53 | 4645959 LetThemEatRand
LetThemEatRand's picture

Heh, heh, heh.  You said "he's a piece of shit but."

Thu, 04/10/2014 - 21:56 | 4645966 fonzannoon
fonzannoon's picture

"Look the fed did a great job of putting a floor under this market and transferring a shitload of wealth up to me and my buddies....but....I gotta tell ya...we...we have so much wealth now, so much shit, we don't know where to put it....I mean it's kinda excessive...so lets crash the whole fuckin thing and start over...did I mention i'm in cash?

Thu, 04/10/2014 - 21:58 | 4645975 LetThemEatRand
LetThemEatRand's picture

Probably in fucking gold the duplicitous fuck.  By which I mean kind gentleman.

Thu, 04/10/2014 - 21:59 | 4645979 buzzsaw99
buzzsaw99's picture

yes and maggot man I-CON can't keep sucking the juice out of dead fetuses forever either

Thu, 04/10/2014 - 22:02 | 4645991 Rubbish
Rubbish's picture

If they don't BTFD tomorrow, my bet is we see a whole lot of money come off the casino tables next week and into the bar for some celebration. This party is about over, time to get serious about living without.

 

 

Fri, 04/11/2014 - 06:37 | 4646646 Wahooo
Wahooo's picture

Hot money is just taking profits in spec stocks like biotech and iCrap. Lot of stocks have hardly budged in the past week and a lot of gone higher. Just a lot of repositioning ahead of earnings. iCon is telling us what he's already done in the past, no doubt he is buying the dip.

Thu, 04/10/2014 - 22:04 | 4646000 TideFighter
TideFighter's picture

<<<Icahn is a fucking douchebag.

<<<Soros is a bigger fucking douchebag.

Thu, 04/10/2014 - 22:05 | 4646007 LetThemEatRand
LetThemEatRand's picture

My head exploded trying to decide.

Thu, 04/10/2014 - 22:12 | 4646021 813kml
813kml's picture

Just like Common Core, there are no wrong answers on this test.

Thu, 04/10/2014 - 22:36 | 4646083 motorollin
motorollin's picture

Posts like this will drive me to make two accounts.

Thu, 04/10/2014 - 22:08 | 4646004 Kiss My Iceland...
Kiss My Icelandic Ass's picture

hursuit ?

 

Um .. spell check, anyone ? H-I-R-S-U-T-E

Thu, 04/10/2014 - 22:57 | 4646158 rubiconsolutions
rubiconsolutions's picture

Hillary Clinton and herpantsuit

Thu, 04/10/2014 - 22:08 | 4646011 dracos_ghost
dracos_ghost's picture

What no friggin tweet. Pussy. And gee, I guess AAPL and HLF are sells now?

Why is CNBC allowed to exist again.

Thu, 04/10/2014 - 22:12 | 4646012 ebworthen
ebworthen's picture

Icahn is a fucking parasite.

He is the kind of flesh bag that should have been eliminated a long time ago.

Him and the Albuquerque Police Department.

Thu, 04/10/2014 - 22:28 | 4646059 Seize Mars
Seize Mars's picture

Ebworthen
Amen, brother. A-fucking-men.

Thu, 04/10/2014 - 22:10 | 4646013 Soul Glow
Soul Glow's picture

Fear the Beard!

Thu, 04/10/2014 - 22:13 | 4646023 SmilinJoeFizzion
SmilinJoeFizzion's picture

The cat has bounced his last

Thu, 04/10/2014 - 22:24 | 4646047 Soul Glow
Soul Glow's picture

Sell in May and get the fuck outta Dodge.

Thu, 04/10/2014 - 22:13 | 4646026 q99x2
q99x2's picture

Can the FED short itself?

I wonder.

Fri, 04/11/2014 - 00:11 | 4646331 BringOnTheAsteroid
BringOnTheAsteroid's picture

Huh, what are mind bending concept that is. Can a company about to go bankrupt short its own shares so it earns more the worse it gets thereby maintaining a perfect equilibrium.

YES - In todays financially engineered world - YES, this is possible.

Thu, 04/10/2014 - 22:21 | 4646042 evernewecon
evernewecon's picture

 

 

If the merchant banks had skin

in the game their derivatives

would be really interesting.

 

Accountants and scientists 

shouldn't be sellout artists.

 

Thu, 04/10/2014 - 22:26 | 4646055 Seize Mars
Seize Mars's picture

I-Con is a ratfuck scumbag communist traitor.
He is nothing. He has no talent, he has no intelligence, he has no insight. All he has is access to capital. That's it. A free-money spigot. Just like his buddy Sam Zell, another moron with access to the free money printing press.

Fri, 04/11/2014 - 02:54 | 4646521 stopthejunk1
stopthejunk1's picture

Bill Ackman??  Is that you???

 

HLF to the MOOOONNN baby!

Fri, 04/11/2014 - 08:31 | 4646851 marathonman
marathonman's picture

I-con has intelligence.  He knows how to use his money to pilfer more money out of companies and enrich himself.  He is a parasite and a scum bag, but he's still just working the system. 

Thu, 04/10/2014 - 22:35 | 4646079 rsnoble
rsnoble's picture

A correction isn't going to do this market any good.  Say it drops to 12k then what?  Everyone piles back in and brings it right back to where it is now and in the meantime things in the real economy continue to get worse?  What a fucking joke.

Thu, 04/10/2014 - 22:41 | 4646106 arnoldsimage
arnoldsimage's picture

wow! what insight, carl.

Thu, 04/10/2014 - 22:47 | 4646122 AdvancingTime
AdvancingTime's picture

What I'm seeing develop is an "almost surreal" feeling of indifference towards reality. Companies have already ushered saving from interest paid on debt into the earning column and a major reason inflation remains low is they are sitting on a hoard of cash this has lowered the velocity of money. We must remember the artificially low FED controlled interest rates are a massive one-off or onetime tailwind that is mainly behind us. 

When rates stop going lower or reverse the positive effect will ebb and become a major headwind. With massive government debt in many countries and the economy still weak this headwind has the potential to become devastating. The collision of MMT, social unrest over inequality, and other destabilizing factors have the potential to create the perfect storm. The article below looks at just how complacent we have become to the risk before us.

http://brucewilds.blogspot.com/2014/01/have-we-been-lulled-into-complace...

Fri, 04/11/2014 - 02:58 | 4646524 stopthejunk1
stopthejunk1's picture

Shit, this isn't anything.  Do you remember the 90s?

 

As far as bubbles go, this one could go a lot further.

 

I'm not saying it's not a bubble.  I'm saying I hope you're not shorting anything, because the market can be "wrong" longer than you can remain solvent.  Ask Bill Ackman about that.

 

Also, in an inflationary environment, stocks are obviously going to go up.  Everybody on Zh rails about unadmitted inflation, and then they rail about the stock market going up.  Well, which is it?  You can't have one without the other.  

 

But, you know, buy gold.  That'll work.

Thu, 04/10/2014 - 22:49 | 4646127 slightlyskeptical
slightlyskeptical's picture

For the record...the S&P is now down 3.5% from it's all time highs....Hardly what one would consider a huge selloff. People piling into shorts will once again pay a price. IMO It will be the next decline that keeps going and going and going. Readers will have the opportunity to make fun of Gartman once again before that happens.

Fri, 04/11/2014 - 00:06 | 4646318 polo007
polo007's picture

http://research.stlouisfed.org/fred2/graph/?g=wqK

Federal Debt: Total Public Debt

2013 Q4 $17,351,970,000,000

Quarterly, End of Period, Not Seasonally Adjusted, GFDEBTN, Updated: 2014-03-25 8:21 AM CDT

http://research.stlouisfed.org/fred2/graph/?g=wvD

Effective Federal Funds Rate

2014-03: 0.08 percent

Monthly, Not Seasonally Adjusted, FEDFUNDS, Updated: 2014-04-07 3:51 PM CDT

Fri, 04/11/2014 - 03:10 | 4646529 stopthejunk1
stopthejunk1's picture

The 17 trillion is not the important number.

 

The important numbers are:

 

-80% of naval tonnage

-40% of global military budget

-70% of oil priced in petrodollars

 

 

The real empire is petrodollars.  

 

The thing is, if you were around as an adult in 1970, you probaby wouldn't have caught onto the petrodollar regime.  Because in 1970, teenaged girls didn't know about it and it wasnt' the hot topic at your noveau bourgeoise cocktail parties.

 

And the super-smart people (Nixon) that arranged the petrodollar empire are currently setting up the next empire to replace it.  Just like they set up Bretton Woods before that.  (And the Fed/16th amendment before that.)  In fact, the new regime is already in place.  And you can't see it; you won't see it for 20 or 30 years, because you don't have anyone to tell you about it, and by that time that you see it every will see it, and it will be obsolete, and you will be myopic about it's successor.  But dont' worry, you'll still be cool at cocktail parties.

 

Sometimes, being contrarian doesn't get you anywhere.  Like everything else, it should be done in moderation. 

 

Disclaimer: I am not endorsing the status quo.  I dig Noam Chomsky.  I am only describing it.

Fri, 04/11/2014 - 09:09 | 4646990 Kayman
Kayman's picture

stopthejunk1

1. -80% of naval tonnage

2.-40% of global military budget

3-70% of oil priced in petrodollars (coal)

Sounds like the British Empire before they overreached.

   How about the world's largest creditor nation becoming the world's largest debtor nation (u.s. dollars are backed by debt- a claim on everything priced in USD/FRN). Same as Britain at the end of WWII when Japan and Germany had their slates wiped clean while Britain still had the debt to pay.

   And I don't think these guys are as smart as you claim. When the petrodollar was agreed to by the Saudis the U.S. was the world's largest manufacturing nation. Now we are a nation of Walmarts and financial criminals.

  

 

Fri, 04/11/2014 - 00:07 | 4646322 QQQBall
QQQBall's picture

The most pubicized correction/crash in history...

Fri, 04/11/2014 - 02:14 | 4646487 kurt
kurt's picture

Icahn is not a blood sucker. He is more like a scavenger.

Fri, 04/11/2014 - 07:26 | 4646702 NuYawkFrankie
NuYawkFrankie's picture

re Icahn is not a blood sucker

How's about a c*ck sucker?

Fri, 04/11/2014 - 03:02 | 4646528 stopthejunk1
stopthejunk1's picture

The longs are as screwed as the shorts in this market.

 

If you do not know how to hedge, you will make no money.  Better just stay in cash and BTFD.  Because there will be a FD....

Fri, 04/11/2014 - 09:31 | 4647061 Itchy and Scratchy
Itchy and Scratchy's picture

Anti-CAPEX crusader!

Do NOT follow this link or you will be banned from the site!