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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LetThemEatRand's picture

I hope ICon has a major correction.

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.

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.

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.

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.

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...

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.

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?

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 ?

wrs1's picture

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

Or maybe there is some humor there that escaped me.

Captain Queeg's picture

It's all shitgum under the bridge anyway.

813kml's picture

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

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... 

LetThemEatRand's picture

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

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 lets crash the whole fuckin thing and start over...did I mention i'm in cash?

LetThemEatRand's picture

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

buzzsaw99's picture

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

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.



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.

TideFighter's picture

<<<Icahn is a fucking douchebag.

<<<Soros is a bigger fucking douchebag.

LetThemEatRand's picture

My head exploded trying to decide.

813kml's picture

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

motorollin's picture

Posts like this will drive me to make two accounts.

Kiss My Icelandic Ass's picture

hursuit ?


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

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.

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.

Seize Mars's picture

Amen, brother. A-fucking-men.

SmilinJoeFizzion's picture

The cat has bounced his last

Soul Glow's picture

Sell in May and get the fuck outta Dodge.

q99x2's picture

Can the FED short itself?

I wonder.

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.

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.


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.

stopthejunk1's picture

Bill Ackman??  Is that you???


HLF to the MOOOONNN baby!

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. 

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.

arnoldsimage's picture

wow! what insight, carl.

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.

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.

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.

polo007's picture

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

Effective Federal Funds Rate

2014-03: 0.08 percent

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

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.

Kayman's picture


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.



QQQBall's picture

The most pubicized correction/crash in history...

kurt's picture

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