Do you agree with Carl Icahn who predicts the financial crisis looming directly ahead is going to make 2008 look minor by comparison?

It’s interesting, there’s been a number of people looking back at 2008 recently, partially because Ben Bernanke has written his memoirs about the financial crisis, and there’s been other talk about, “Have we really made any changes that would prevent another 2008.” There’s a recent gathering by the Federal Reserve Bank of Boston where a number of the leading economists there said that, “No, the U.S. is still very vulnerable to a financial crisis. We haven’t made fundamental changes in our financial systems to prevent one” and that’s really true. What major changes have we really made since 2008? Not many. I think Carl Icahn had said that, “What happened in 2008 could be child’s play compared to what could happen in the future.” Well, I would say absolutely and more, because what happened in 2008 is that the credibility of the Fed was still in tact, so massive borrowing, massive money printing to support that borrowing by the Fed worked, and it worked very well to improve asset prices. Not so good to improve incomes, not that great for the economy, but it sure helped to boost stock and real estate prices. So, what’s going to happen next time and the reason that looks like child’s play is the Fed won’t have that credibility; it won’t be able to print money and get that positive reaction it got. In fact, next time it prints money, you’re going to get a negative reaction. So, imagine 2008 and instead of getting the positive Fed reaction when the markets hit 7,000, you get a negative reaction when it’s at 7,000.