Carl Icahn, a businessman and founder of Icahn Enterprises, delivered grave statements about the current situation of markets following a series of terrible low points.
He warned: “I do think the market will bounce back but these are the rumblings before the earthquake.
“The market is telling you something… it’s telling you it’s very dangerous…it’s way over-leveraged.
“The market has become a much more dangerous place due to index funds and Exchange-traded fund’s…it’s like 2008 where everyone was buying mortgages and credit default swap (CDS).”
The philanthropist turned up the dial of his terrifying statements by claiming that eventually, markets are going to become direr than the 2009 and 1929 crashes that both plunged the world into extreme economic hardship.
He explained: “Eventually, there’s going to be a bigger problem than 2009 and 1929, eventually.
“A major storm is coming, could be five years, could be five months.
“No one can tell you what the market is going to do – it’s almost farcical to think you can.
“I am still concerned that one day you’ll see a break like you had a few weeks ago…but it won’t come back.
“There is a huge bubble of passive money flowing in… a sort of euphoria and a lot of people are going to pay the price just like in 1929.”
The billionaire added that there is going to be a “major correction” in the market as he continued to alarm investors.
He went on: “This is something we’ve never seen before…I don’t remember ever seeing a market with this kind of volatility over two weeks.
“Passive investing is the bubble right now.
“There is going to be a major, major, major correction.
“This is a manifestation of a real deep problem we have in our markets.”
Although the renowned investor declared that the “market is a casino on steroids”, he was keen to express that the current period is not “the explosive time”.
After going into free fall earlier this week and losing 1,600 points, the Dow Jones industrial average plunged a further 567 points.
This put the market near the expected correction territory but soon saw a recovery of 367 points.
Since the day of monumental losses, the famous market has dipped interchangeably between positive and negative.