Carl Icahn Talks With Bloomberg At Robin Hood Conference [FULL TRANSCRIPT]

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shareholders. (Inaudible) they went on the – he’s the only guy that I never saw a glass full as saying you should kick a guy off the board except for this guy, and Marc – and – and then he never left.

And then what gets you is the arrogance. These guys live in glass houses. I was minding my own business with Dell, even though he actually I believe screwed the Dell shareholders tremendously because he wouldn’t let anybody – they set it up – let me just tell you. I won’t get into it now, but maybe in the future I will. They set it up and – and in a way that nobody could make a bid. But these guys go around pounding their chests. I learned something in school once. If you live in glass houses you should throw stones, especially at a guy that don’t mind throwing them back at you. And – and I – Dell was off my radar screen, but no more.

RUHLE: He’s on it.

CARL ICAHN: He’s on it now. I just think – I – it’s not that I’m mad that they insult you. I’m mad at their arrogance of telling you – after they – they literally kill their shareholders and then pound themselves on the chests and say look at the good guys we are. And now – now I tell you what Hewlett-Packard’s shareholders got to worry about. They’re worried about —

RUHLE: Hewlett-Packard?

CARL ICAHN: Yeah, because Andreessen is on the board of Hewlett-Packard. I’m sure Dell is going to work his way about trying to make a deal with Hewlett-Packard. If these two guys are involved, god help the Hewlett-Packard shareholders. That’s my warning for what it’s worth. You heard it first.

RUHLE: All right. As long as we’re talking glass houses, is Warren Buffett living in one?

CARL ICAHN: Buffett’s a different kind of person. Buffett has literally made – he’s made a lot of money for shareholders. He really has. If you look at what he’s done over the years, I don’t agree with some of the stuff he does, but – but I think he’s way too easy on some of these companies. Because our companies in this country have – and I said that to Larry Fink at this – this thing – at the conference, that I – I think that we have a major trouble in this country – this country because I – I think many, many, many too many of our companies are badly run.

They’re run by mediocre CEOs and should be made accountable. And – and – and I believe that if we don’t do this –

RUHLE: Well should Warren Buffett —

CARL ICAHN: That’s my passion. My – I think Warren Buffett should do more of that, yes. But he’s not in a glass house because he doesn’t do it.

RUHLE: But should he be considered the oracle of Omaha, the great leader of industries when the financial industry is less popular than it’s ever been? The world despises banking and they hold Warren Buffett on a pedestal. From your seat where you interface with all of it, what do you think about that?

CARL ICAHN: Well look, I – I’m not here to defend Warren Buffett. I think he should have done a lot more and should do more about corporate governance, okay? But Warren Buffett has done – in other words, he hasn’t screwed shareholders like some of these guys in Silicon Valley. They screwed them. I don’t see him doing that. I think he’s legitimately made money. I don’t agree with the fact that in his position he couldn’t do more about that, but that’s not his nature.

RUHLE: Earlier you were —

CARL ICAHN: I’m not going to start getting into a war with Warren Buffett. I think he’s a smart guy and I think he’s done well for shareholders. And there are things I disagree with him on, but – but, hey, I don’t like to start wars. But if somebody wants to start it with me, especially the guys like them – I was minding my own business. They started it. Hey, there’s something in me that likes that because I’m really looking forward to going at them. I’m sure they’ll be having more to say about me after today and I’m – I got to tell you there’s a part of me – my mother said I have some kind of warrior gene in me or something.

RUHLE: A warrior gene?

CARL ICAHN: Well, something – I saw it (ph) on TV. She said I was a throwback to a 13th century warrior in the family. But I would rather fight corporations than these guys.

RUHLE: Yeah, but earlier you were saying how you used credit derivatives, for example, and Warren Buffett in the past has called them weapons of mass destruction. What does that mean for the industry?

CARL ICAHN: That’s different. Don’t confuse it. Some of the things that we’re using, I don’t think he’s calling them that. I think he was more talking about in ’08 or ’09 about derivatives used in the housing bubble that really blew up the economy. And there you have to blame Wall Street for that. And there’s no question that Wall Street – and I think most of them will admit it. They were (inaudible). They oversold mortgage backed securities, MBS —

RUHLE: But didn’t Barney Frank and the US government promote – and Fannie and Freddie promote everyone to say it’s part of your birthright, it’s part of the American dream, everyone should buy a home? Are investment banks solely to blame for people lying on their mortgage applications?

CARL ICAHN: Are you talking about —

RUHLE: The housing crisis.

CARL ICAHN: The whole Wall Street housing crisis, there’s a lot of blame to go around in it, right? In other words, you blame Wall Street for selling those – if you really understood those derivative, they were weapons of mass destruction. They were crazy and these guys were selling them, okay? So you can blame them and you can blame Barney Frank for allowing it to go through if you want to. There was so much blame to go around, but I find it hard to say Warren Buffett’s to blame for it. Why would you say that?

RUHLE: I’m not saying Warren Buffett is to blame, no, no, no. I’m definitely not saying Warren Buffett is to blame. Does it concern you that we’re seeing mortgage standards loosen up again and we could be getting ourselves back into a 2005/2006 when the party begins all over again?

CARL ICAHN: There’s a concern in that. I think if you really want to be concerned, I think the – a concern which might start this avalanche is high yield securities. I think – why – just think about it. It’s a no-brainer. It’s more like Apple is a no-brainer to buy it. This is a no-brainer because why do you go in and – and why are you willing – and here the public doesn’t understand it. Why are you —

RUHLE: Well we’re in a low default environment. People were desperate for yield. Where else were they going to go?

CARL ICAHN: Okay. I agree with you, but what happens when it breaks? Ten years ago you had maybe $19 billion or something in these funds. Today you have like – I don’t even know what it is, $800 billion or $900 billion. Where is it going to go when the fire starts?

RUHLE: But why is it going to break? Corporations have more cash on their balance sheets than they ever have before. Why do we think it has to break? Because everything always does?

CARL ICAHN: It does – it does – I guess the answer which is simplistic and probably facetious is because it always does, right? I would tell you that there are – I could give you reasons why it might break, and I told you one. That if you stop – if – you can’t go lower than zero on federal funds rate. If that stops working to make the economy better, people are going to start getting nervous.

I can give you so many instances. And what do you do if you have inflation, which could happen? We have deflation now. We’re really (ph) even bad deflation. What do you do? The Fed can’t save us themselves. We have to become more productive in our own society. We have to – our companies should become more productive and we don’t have the right people to run so many of them. And that’s why I say that you should have better corporate governance.

RUHLE: If we are heading for more volatile markets, dare I say a 2008, do you feel better about Wall Street today now that we’re more regulated? We’re living in a Volcker/Dodd-Frank world where the Street isn’t long billions of risk like we were in ’08.

CARL ICAHN: I think it is better than it was, but I’m not telling you there’s any panacea. I’m still telling you there are many problems on Wall Street. But I think it’s a lot better than it was. I don’t think you’ll have the bust that you had in ’08, but you could have a real bad bust sooner or later. But I’m not telling you next week or next month or six months. We own a lot of stocks, so I don’t want to be here saying the market’s going to bust. I am saying that there could be a break in the market.

But I am telling you that one of the – I like to look – after you do it as long as I do, your instincts almost take over and tell you when something’s great. And —

RUHLE: What’s great?

CARL ICAHN: Well I just told you two of them. The Apple is great. There’s a few others that you find here and there that’s great. Shorting long term, but it’s not an easy thing to do the way I do it – I’m going to explain it in Twitter. Doing the CDS derivative is great, and great because the risk/reward. But all these things don’t mean you’re going to win. It means that you got a great risk/reward ratio. The risk is much smaller than it should be.

It’s like – you know a fight – let’s say you know a fight’s going on and you know there’s one great fighter fighting a – like a has-been guy, and you know – you say he’s definitely going to win and the odds should be 10 to one. And those are the what the odds should be. And you walk in and they tell you it’s two to one or even money. Well you’re going to bet a lot on the – on the favorite, and that’s what I call a no-brainer. So I think Apple was one – hey, it certainly was one a year ago when we tweeted it and I think it still is. I —

RUHLE: Can you believe that you are Carl Icahn and you’re saying to me when we tweeted it? Three years ago did you think you’d be sitting here, so check my Twitter account? Isn’t that a little crazy?

CARL ICAHN: Very crazy, but I don’t tweet them. My daughter does. Michelle, she – she took over. She does it. She’s right here. She’s come to watch my thing. She’s come into the business and she does all the tweeting. I just write them, and even then —

RUHLE: You can get it all out in 140 characters. Atlantic City. Winning trade? Atlantic City.

CARL ICAHN: Yeah.

RUHLE: What do you think right now?

CARL ICAHN: A lot of problems. A lot of – we are in it. We – we went in – I’m getting a little flack on that one, but we went into the Tropicana when nobody would touch it about two or three years ago when it was bankrupt. Nobody would touch it and we put in – I put $80 million in and we saved that and – and it’s doing pretty well.

Taj Mahal is a tougher – much tougher story. And we – I didn’t even want to put $100 million into it, but – but it’s a complicated thing. But we got – but you can’t have the union contracts that you have there because there’s no money. The company is just out of money. They don’t want to believe it. So it could either close down or we’ll put $100 million in, but we can’t put it in and just lose. It’s losing. Even if we put the money in and even if you didn’t pay interest, it’s losing $7 million, $8 million a month. You just can’t have it. And these people for some reason don’t want to accept it. They just said nope, we can’t change the contracts.

So it’s like if – if – if you’re a spoiled kid and – and your family keeps giving you a big car and a big house and you’re living really good and then the father loses a lot of his money. The kid says no, I don’t want to give up my car. I don’t want to give up my house. Everybody has to make concessions and give up, and they just don’t want to do it. So – well, I won’t say they don’t want to do it. The union doesn’t want to I guess. But so that’s what I think. I think Taj Mahal could be saved, but you have to – you have to save – you have to – you have to get concessions.

But interestingly – and then I’ll leave it – the concessions we’ve asked for, the union is saying these people will get medical. The people who get medical can go on Obamacare and the very poor, the low – the low salaried worker is completely covered anyway by Obamacare subsidies or by Medicaid. They get covered, but the union doesn’t get the money. It’s that we – the hotels save the money.

RUHLE: Do you have a view on Obamacare, the Affordable Care Act?

CARL ICAHN: It’s very – that’ll take longer than the derivatives to talk about. I’ve studied it quite a bit and I really think that in certain cases Obamacare is good. It’s something that I think is not bad. I’m no great fan of Obama, but then again Washington’s got so many other problems. But I really think that Obamacare is something that could be good if it was worked properly. But being that said, I don’t want to get into it because there’s so many ifs there and so many questions.

RUHLE: If you did sit down with Obama, if he was here at the table, what advice would you give him? What does he need to focus on most in terms of the US economy?

CARL ICAHN: Well I – I don’t want to sound like a one-tricky pony, but you should —

RUHLE: Stallion. Stallion.

CARL ICAHN: Stallion. One-trick stallion. I always say pony. Isn’t it pony?

RUHLE: It is.

CARL ICAHN: Anyway, yeah. But I like you saying that. Anyway, I would say do something on corporate governance in this country. It’s dysfunctional. Make – make CEOs, make them accountable and make – and have the ability to get rid of some of them. And the shareholders really don’t do it because the laws are such that the laws protect these guys. And it’s very hard. That’s why I make so much money because it’s very hard to break the wall down. We do it. We do it. For years we’ve studied how to do it, but it’s very hard to do it. And I’m talking against my own business, but it should be a lot easier to do it.

RUHLE: Then when you look at the Aubrey McClendons of the world, do you say how could this possibly happen in corporate America?

CARL ICAHN: That’s my whole point. That’s what I’m saying to you. That’s what I would say to Obama.

RUHLE: Do you actually believe that corporate governance can be addressed? When you look at the gridlock in Washington, yes, this is an —

CARL ICAHN: You just asked me what I’d tell him to try to do. I’m not telling you he can do it.

RUHLE: But is it a pipe dream? Do you actually think in your lifetime, in my lifetime we’re going to see real changes? Look what’s happening in terms of inversions. Companies wanting to pick up stake and get out of this country, and we’re not making real change and improvements to stop that.

CARL ICAHN: Yeah, but I’d tell you one thing that my – you might see a change happening in corporate governance. And the reason is sort of maybe unintended consequences. You have the advent of all these index funds, and the index funds are getting money poured into

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