Legendary money manager Carl Icahn sounded the alarm bell after the Ira Sohn conference.
In an interview with CNBC, Icahn said the following:
"I do think that there could be another major problem. Now, will it happen next week, next year, I don't know and certainly nobody knows, but I don't think that the system is working properly. I really find it amazing that we're almost back to where it was, where there's so much leverage going on in the investment banks today. There's just way too much leverage and too much risk-taking, with other people's money. I know a lot of my friends on Wall Street will hate my saying this, but the Glass Steagall thing or something like it wasn't a bad thing. In other words, a bank should be a bank. Investment bankers should be investment bankers."
In March 2011, Icahn returned investor money citing his fears of another crisis. In a letter to investors Icahn wrote:
“While it may sound ‘corny’ to some, the losses that were incurred by investors in our funds in 2008 bothered me a great deal more, in many respects, than my own losses,” he wrote. “Perhaps this is because over the years I have become inured to dealing with large ‘paper’ losses for myself.”
If anyone in the money management world is aware of how much leverage there is in the financial system it is Carl Icahn. In June 2007, while Wall St. was sanguine, Icahn said the leveraged buyout boom had peaked. The stock market peaked that summer and the financial crisis starting with sub-prime was just around the corner.
In an interview with CNBC, Icahn said the following:
"I do think that there could be another major problem. Now, will it happen next week, next year, I don't know and certainly nobody knows, but I don't think that the system is working properly. I really find it amazing that we're almost back to where it was, where there's so much leverage going on in the investment banks today. There's just way too much leverage and too much risk-taking, with other people's money. I know a lot of my friends on Wall Street will hate my saying this, but the Glass Steagall thing or something like it wasn't a bad thing. In other words, a bank should be a bank. Investment bankers should be investment bankers."
In March 2011, Icahn returned investor money citing his fears of another crisis. In a letter to investors Icahn wrote:
“While it may sound ‘corny’ to some, the losses that were incurred by investors in our funds in 2008 bothered me a great deal more, in many respects, than my own losses,” he wrote. “Perhaps this is because over the years I have become inured to dealing with large ‘paper’ losses for myself.”
If anyone in the money management world is aware of how much leverage there is in the financial system it is Carl Icahn. In June 2007, while Wall St. was sanguine, Icahn said the leveraged buyout boom had peaked. The stock market peaked that summer and the financial crisis starting with sub-prime was just around the corner.
