Money & The Economy

‘Major Problem’: Investing Guru Raises Serious Concerns Over Future Of American Economy

Founder of Icahn Enterprises Carl Icahn said that the American economy had a “major problem” Tuesday following the collapse of Silicon Valley Bank.

“Our system is breaking down and we absolutely have a major problem in our economy today. And I’m not going to opine whether or not you bail out a bank or something like that,” Icahn said on CNBC’s “Closing Bell.” “But you can’t have the country feeling that – it doesn’t matter if they save, it doesn’t matter, they can spend all the money they want, you can do whatever you want, the government will bail you out.”

Federal regulators shut down Silicon Valley Bank Friday after its stock price collapsed, and customers began a bank run following the financial institution’s disclosure of a $1.8 billion loss on asset sales due to high interest rates, CNBC reported. Depositors who had accounts at Silicon Valley Bank and Signature Bank, which was shut down by regulators Sunday, will be able to fully recover their funds, the FDIC announced in conjunction with the Treasury Department and the Federal Reserve Sunday.

“There is so much to clean up and it is getting much worse now. We’re one of the worst countries in the world as far as corporate governance goes, and I could go on and on that,” Icahn said, pointing to what he said was a failure in corporate leadership.

Several regional banks, notably First Republic, saw their stock prices drop during Monday’s trading, according to Fox Business. Moody’s announced Monday that several banks were under review for a downgrade, Fox Business reported.

“The economy is breaking down,” Icahn said.

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