Icahn – a billionaire investor – called in to CNBC to talk about Monday’s massive drop in the Dow-Jones Industrial Average.
While he thought that Monday’s crash was a mere blip he did say that many institutions are over-leveraged right now just as they were right before the great financial crash of 2008.
‘You have way too many derivatives’ Icahn said – referring to financial instruments whose value is backed by underlying assets such as mortgages – currencies or commodities.
‘It is not really a place for the average person to be playing around in derivatives’.
Icahn said that while he expects the stock market to recover its losses he thinks that this week’s crash was the ‘beginnings of an earthquake’ that would lead to a bigger crash down the road.