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CNBC Exclusive: CNBC’s Scott Wapner Interviews Carl Icahn from CNBC Institutional Investor Delivering Alpha Conference

WHEN: Today, Tuesday, September 13th

Following is the unofficial transcript of a CNBC EXCLUSIVE interview with Carl Icahn, Icahn Enterprises Chairman, live from the CNBC Institutional Investor Delivering Alpha conference in New York City on Tuesday, September 13th.

Following are links to the video on CNBC.com: http://video.cnbc.com/gallery/?video=3000550828 and http://video.cnbc.com/gallery/?video=3000550824

Mandatory credit: CNBC Institutional Investor Delivering Alpha conference.

CARL ICAHN: Getting used to it.

SCOTT WAPNER: The end of an interesting day, by the way. Dow down just about 260 points. And we have heard from some of the world's best investors and brightest investors today who say that times are dangerous. Paul Singer, who you listened to, said that it was a dangerous time. Ray Dalio was worried about where we are, warned about interest rates, that you could have asymmetric risks.

Are you still as negative today as you have been for the better part of the last year?

CARL ICAHN: Yeah. I mean, I don't know if negative is the right word exactly. But I think there are tremendous risks, and -- but I think anyone that's going to tell you it's going to go down tomorrow or next week, even next month or next year, it's sort of a guessing game. But you could look at the environment, and I think it's very dangerous. In other words, you're walking on a ledge and you might make it to the end, but, hey, you fall off that ledge, you're going to really see trouble. And I think that could well be.

SCOTT WAPNER: What pushes you off the ledge? The Fed raising interest rates? You think they should? James Dunhill said yesterday they should; Ray Dalio today said they shouldn't. Where's Carl Icahn on that?

CARL ICAHN: I really will tell you that I don't think it matters. Because, either way, there's a problem. If you don't raise interest rates, I think we're in a major bubble. And you can't -- I think Singer said it right. I heard him for a while, and he's a very smart guy. I've known him for years. I think he's smart despite the fact that he's not for Trump. I think he's smart. So, yeah, he told me that, you know, no uncertain terms. I just saw -- I haven't seen him for a few months. I saw him three months ago. He takes it very seriously. And he sees me somewhere and he looks at me like -- sort of complimentary. He says, you are a smart guy. You're a super-smart guy. Then all of a sudden, he's got this rage, how can you be for Trump?

And first -- relax, relax, Paul. And he really -- but he's a very -- he is a very smart guy. And he's one of the few guys I really respect on Wall Street. And I listened to him today. And I -- honestly, a lot of the things he said, I couldn't have said it better myself. And that's saying a lot.

(Laughter.)

CARL ICAHN: He was right on -- you know what he was really on? And we get into these regulatory agencies. And there are good regulatory agencies that do good jobs, good regulators. But there are so many that -- his words were right on -- amazingly arrogant when you talk to them.

SCOTT WAPNER: You've taken on the EPA.

CARL ICAHN: Not even taken on. There's a woman at the EPA -- look, I'm too old not to -- to be politically correct. This woman, Janet McCabe. And she's a number two something or other. And she's responsible for the most idiotic -- look, I have an agenda here. But the reason I'm bringing it up is it fits into what is wrong with our economy, people like her.

And I'll tell you why. Seriously. Everybody is afraid to say anything about, oh, don't say anything; there'll be reprisals. Listen, I'm too old for that. Let them do reprisals. Should -- we own a refinery -- refineries, a couple of them. And here's what they do, and here's how irrational it is.

And she's running this program. And get this. It is hard to believe. It's like out of "Alice In Wonderland." They have this program where -- I'm not against the RFS, and I'm not -- I'm certainly not against ethanol or for ethanol, or clean air. I like clean air. I think it's great.

But the whole point of what I'm saying is that a few years ago, they pass the Clean Air Act and the renewable fuel standards. And that's fine. And then they come to this point. They go to the EPA and say, in all of your wisdom -- and I will say this -- I mean, Janet McCabe, I'm certain she's a smart woman and a nice woman. She's never run a business, has no business background. And they say you -- or whoever did this, you are going to police the fact that in the Clean Air Act -- I'm going to make it simple because I know Scott's going to push me off in a minute because he doesn't want to talk about this much.

But, look, they push this thing in and say, refineries, you are responsible for blending 10% ethanol or something to that effect. I'm making it simple. They have what they call a blending law. And they keep raising it more and more. It's like the Israelites in Egypt when the pharaoh wanted bricks, but you needed straw, and he wouldn't give them any straw. And he says I'm going to kill you if you don't give me the bricks.

So that's what they do with the refineries. They tell you that you have to blend this thing. And we say fine. You know, we put it on the Magellan pipeline. You go to the rack, you take it off the rack, and we say we're happy to blend it. However, there's one little problem. The big gas station chains, only owned mostly by big oil, are saying we don't want to buy your blended gasoline. We'll only buy unblended. We'll blend it ourselves.

So we go to the EPA and say, well, now what do we do?

Well, she says, hey, that's your problem. I'm paraphrasing. This happened a few years ago. That's your problem. So how do we do it?

Well, at the end of the year, you have to give us something called RINs. Now, a RIN, it's like a piece of paper. It's really electronic. So if you don't blend it, you got to go to the gas station with -- let's say you have 7-Eleven or the big oil companies that own them, and you got to go buy -- they blend it. They take our gasoline, they blend it, and they make a RIN. Okay. And now you got to buy it.

So for a while, that was okay. It cost them 5 cents to make it. They charge you 10 or 15 cents. But now the speculators on Wall Street, which is what they do, and this is how you -- so now it gets to the housing bubble. This is just what happened. And I'm not blaming the Wall Street guys, because look out, they're speculators. That's what they do.

So they started hoarding it. And it's a completely criminal market now. There's no regulation in it. The RINs are up 5,000% or the smaller refineries are going bankrupt. But here's -- and you go and you try to call this Janet McCabe. And I say, look, I call up, I try to be a nice guy to the secretary. Please, I'd like to talk to her. Oh, she's on vacation.

I said, well --

SCOTT WAPNER: Your voice on the phone --

CARL ICAHN: Because I was trying to be funny. Don't laugh. Well, she's on vacation. Can't she spend ten minutes, get off the mountain or something for ten minutes? And they don't laugh. Like, we don't disturb people on vacation. I said what if the world's falling apart? We're going bankrupt? What if we're -- we're not going bankrupt, but there's so many going bankrupt. Nope, sorry.

So it took me three weeks. I get a call, an hour to go before the phone call message, and say, she's not going to talk to you. So I said, well, you know something? I can get to the President of the United States in three weeks or less than three weeks. It's very important.

No, she will not talk to you.

And this is exactly what Singer said, amazingly arrogant. Let me finish the point. You are going to move on right after this statement.

(Laughter.)

CARL ICAHN: So I said to her -- and I think this was funny; they didn't. I said to the secretary, not her, because I couldn't get her. She says, the only way she'll speak with you perhaps when you are in Washington. And I said I'm going to Washington. Well, when you're in Washington, call her up, and maybe we'll find some time for you so she can see you.

I said, I'll tell you what. I'll send you my picture. I'll put it on her desk. I'll frame it nicely. And I'll frame her picture, and I can look at it while I talk to her. No laughter. Now, she wouldn't even talk to me now.

I really don't want to boast -- I sent her a 30-page paper on why this is going to be destructive, this is going to bring on great scandals, but, worse than that, it's going to bankrupt a bunch of refineries. Big oil is going to get what they've always wanted, which you're going to see in a year or two. And you're going to get something like the housing crisis.

Because what's going to happen is a lot of these refineries are owned by foreign entities. And they're going to push gasoline prices up double and triple and hurt our economy. And people know that.

A fellow named Tom O'Malley, who is the dean in this area, has been writing letters how there's going to be this huge scandal and huge bankruptcy. So my point is, this is what Singer was saying. They're amazingly arrogant, but I'll make my point about the economy where it fits in, because I know --

SCOTT WAPNER: Well, the point you're making in a sense is one of the reasons why you say you support Trump, is because you think -- and you've made the case that you think he will get rid of some of the regulations that are harming business.

CARL ICAHN: But it's sort of worse than the regulations. It's the fear of these irrational regulations. I have a lot of companies. Other people, you know, other CEOs I know. So if you're a CEO, this is -- so simply, and you don't have to go through a lot of calculation. You look at it simply.

You got a CEO. And you know I've been critics of CEOs to some extent. Some I like; some I don't. But most of the guys are astute politically and survivors. And so they got a business. And the business is doing okay or well. You can borrow money at 0% or 2% or 1%. Well, now, what would you do if you're a CEO?

On the one hand, you could take that money and build machinery, build factories, and make -- our work is productive with new machinery. I mean, the pundits are all, why are we not productive? You're not productive because the machinery is terrible. And you really don't have new machinery to use. And the reason is that if you're the CEO, you look at the one hand, I could put money into machinery and have these crazy, irrational rules from the EPA and other -- some rules, you need rules.

Don't get me wrong. You should have rules. You should have clean air and all. But you shouldn't have people like the Janet McCabe who I've never met dictating what should be done and not being willing to listen to somebody that knows it. And at the risk of being immodest, I said I've made 28% return on my money since I started. Okay? And I know markets. I don't know much about anything else, but I do know markets.

And if you listen to me for 15 minutes, you'll understand something. We don't need to talk. That's as simple -- and that's what Singer said, and that's what I'm saying.

Now, that guy, the CEO, the reason he's not putting the money into machinery and factories is he says to himself, I got -- I could put it into these factories; I could put it into machinery. And you know what's going to happen? When you get these crazy rules, regulations, and not make return on my money and be fired by the board, or a guy like Carl Icahn will fire me. Okay? And that's what they can say to themselves.

Or I'm going to go in, take the money, and buy back stock. My stock will go up. I invested two years ago. I invest next year. It will be perfect. And one of the guys like Goldman Sachs tell him, hey, this is perfect for you, Joe. They're playing golf together, whatever. And you know what? You'll vest in two years. We do the buyback. It vests that day. You'll take your stock out. You got $50 million. You play golf the rest of your life.

Well, what the hell would you choose? Of course they're not going to put money into the economy. And Hillary Clinton says, one hand -- which is really funny. And she's right in the first sentence of this. She says, you know what? She says, we must -- because, you know, both candidates, it's ridiculous. I'm going out and promising I'm going to do tunnels and bridges. And Hillary is saying why not give everybody broadband? Good idea, Hillary. Great. Give everybody broadband. The homeless guy will have broadband. So that's a good idea.

However, where are you going to get the money? You got a Congress that is obsessed with deficits. So neither of them are going to get the money to do this. But the one thing Trump can do that she is not doing, because Hillary says, hey, you should all do all this. We're going to unleash the great power, the great buying power of our great companies, and they are going to put money in. And that sounds great, except for one thing. The next sentence, and we're going to tax them, and we're going to regulate them. Ha, ha, ha. Let's see them now. We want them covered, and put money in. Oh, isn't that great?

Trump, on the other hand, will say, hey, I'm going to change the regulatory agencies. And, again, there's some -- there are people in regulatory agencies that are really good, really smart. I've met them and -- certain of them. And they're fine. But I'm going to change the Janet McCabes of the world. And I know she's going to do a reprisal. My CEO has just had a heart attack somewhere in Kansas because he's so scared that they're going to come after him. So I said, look, you can't live like that. Of course I'm going to have a drink when I go home and worry what the hell they're going to do.

But the real issue I'm saying to you is that this is why we have a problem in this country. We got a problem in this country because you need regulation. And the reason we had the housing bubble is we had the laws and you had the regulations. We didn't follow them. That's why you had that.

And what you are going to have here, you are going to have another bubble coming up, because we cannot produce, we cannot compete. Now, you can say we're a service economy, which I never understood, but the pundits will say, well, a service economy, what the hell does that mean? Everybody texts everybody else, sits around and texts, so we produce nothing. Well, sooner or later, they're going to stop taking our currency, right. And sooner or later, we're not going to be the reserve currency of the world.

And, by the way, most of this stuff, even on the technology side, that's produced and really is worth something, most of that isn't produced in this country anyway. And when we look at where we are and you look at these crazy regulations like these RINs -- and, by the way, these RINs will blow up. There's going to be a scandal. I mean, we have five things we're doing and ten things we're doing. We believe that they are criminally traded, that there's collusion, and we're going to be doing all that. But even with that, we have a major problem.

SCOTT WAPNER: So what you're saying is that -- okay. You make the argument, okay, Trump is going to be better for the economy and, for a variety of reasons, which you've just laid out --

CARL ICAHN: It's not a variety. One of the things will be the regulatory. He's going to do something about it.

SCOTT WAPNER: What do you make of those who say he's going to be terrible for the economy? Not only bad for the economy; he's going to be terrible for the stock market?

CARL ICAHN: Well, wait, wait. Let's not confuse stock market and economy. I know maybe you don't want to hear this. But you know stocks can go down and the economy can be good for the middle class guy that wants a job. It doesn't mean that the 1% that have been sitting around and all hate Trump don't really realize that, but isn't that true? Does the stock market equate to the economy necessarily all the time --

SCOTT WAPNER: No, but Mark Cuban, for example, last week, said -- and I'm quoting -- I have no doubt the market tanks if Donald wins.

CARL ICAHN: And I like Mark Cuban. You won't get me into one of those fights with Mark Cuban. Okay? I know he's trying. Tell me what Ackman said.

(Laughter.)

SCOTT WAPNER: You're a little early on that cue. I'm going to get there.

CARL ICAHN: I go to bed when he starts -- my alarm will go. I'm not fighting with Ackman either.

SCOTT WAPNER: But look, even people whom I know that you like and respect, Lee Cooperman, on my show recently, said while he didn't really like either candidate, he said Hillary was less risky for the market.

CARL ICAHN: They're wrong because you need to do something about our productivity in this country. In other words, I think it's very simple. If you don't have jobs and you don't have people working, sooner or later this blows up. You know? And it blows up in so many different fashions.

But it's simplistic. Our economy is not doing well. I don't care -- I don't even think Lee Cooperman would tell you it's doing well. I think he's a smart guy, by the way. And I think Cuban's smart. I don't think they'd say that our economy is doing well. Look at GDP. I mean, zero interest rates. You can't get the GNP above 1 1/2, 2%. It's absurdity, really. With zero interest rates, I think if you tell somebody 10, 15, 20 years ago, I'm going to get your rates down to 1%, they'd say, oh, you'll have inflation. You're going to have terrible inflation. You don't have inflation. So you can get away with it. But one day, you will. One day, you'll have inflation. And it's going to happen -- and I can't tell you when, but it will happen very quickly.

SCOTT WAPNER: This was a year ago, almost to the day, where you put out your "Danger Ahead" video.

CARL ICAHN: And I stand behind that. I think it's true.

SCOTT WAPNER: And the stock market since then is up double-digit percentage points.

CARL ICAHN: Okay.

SCOTT WAPNER: Does that make you think that even more danger's ahead, or does that make you rethink where exactly we are, the fact that stocks have been able to do that well?

CARL ICAHN: Well, to begin with, there were a lot of sectors in the market, outside the big dividend-paying, big blue chip-type stocks, that really make up a lot of the S&P that haven't done well. Look at the hedge funds. I just heard Steve Schwarzman talking about the hedge funds not doing well. Okay?

So these money managers are doing terribly. And you know why? Because some of them are smart enough to be hedged. And it doesn't mean that, if you made a lot of money, that you're necessarily smart. There are a lot of people, friends of mine on Wall Street, I say -- they get a little mad sometimes. I say, if you're so rich, how come you're not smart? That's what I say to them.

What I'm saying, it doesn't necessarily mean that I'm necessarily wrong. I am saying to you -- and I think you heard Dalio today and you heard Singer, both very smart guys -- and other guys very smart -- that you really got to be very cautious. And, by the way, it doesn't mean that I'm net short, because we have a lot of long positions in a lot of companies that we control.

So, actually, I actually make more money, ironically, if it goes up, a little bit more hedged. I mean, we are short against the long. You know? So that doesn't mean -- in a sense, yeah. I can have cash, but you're long and you're short. You know? So it's a net position that I would say a net long -- I wish I wasn't, but I'm net long because we've got companies we control that you'd have to sell the whole company.

SCOTT WAPNER: More than a Trump presidency, what turns your view around of the stock market? Does Donald Trump being elected have anything to do with your view changing? Or what has to happen?

CARL ICAHN: I have to tell you, I can't tell you if Trump gets elected it's going up or down. I think that's just a guess, not going up or down now. But I will tell you, I really do believe this: That if you look ahead four years, or three years even, if Trump gets elected, this economy will be a lot better than if Hillary Clinton gets elected. That, I really believe.

But I can't tell you, Scott, you know something, if he gets elected, market's up 100 points or down 200 points. It's how people look at it. It's how they're going to be. Is there a question of uncertainty? Is there a question of the trade argument she wants to have? I mean, there's going to be a lot of near-term questions.

I think with Hillary too, though, there's a lot of problems, I think, with what she's saying to do. She wants to bring in more government and bigger government. And, you know, it really -- big government, if you see how our schools are run, we have a lot of charter schools. Our schools for kids -- you know, my wife really runs them. And she puts a lot of time into them. But the kids in the Bronx, those kids can read or write as good as Scarsdale. And down the block, they blame it, oh, the environment, oh, the delinquency. Those kids can't read or write. And these guys can read and write as good as Scarsdale. And why? Because it's the government running it.

And the government shouldn't run things, because they aren't trained to run things. I mean, you can't even blame them. You can't blame -- I really don't blame Janet McCabe for screwing this up. She shouldn't be doing it. I mean, she should be talking to other people and getting their advice.

And then these RINs are going to blow up one day. And then you're going to say, oh, this guy O'Malley, there's going to be a huge government scandal. And then they'll be all looking for the scapegoats. And maybe they'll blame her for a little bit. But what difference does it make when you got a lot of people, all the problems you had in the housing bubble and the government maybe can't save it this time.

SCOTT WAPNER: Let me ask you about the name you mentioned just a short time ago: Bill Ackman. Because, two years ago, we sat on this very stage in this room, and you guys hugged it out.

CARL ICAHN: I remember it well.

SCOTT WAPNER: As do I.

CARL ICAHN: We hugged?

SCOTT WAPNER: You did. It was a little awkward hug, but it was a hug.

CARL ICAHN: I think I tripped on the steps.

SCOTT WAPNER: Now you guys are back at it. What happened?

CARL ICAHN: I don't think we're back at it. I really don't believe that. I mean, he said a few things about -- look, I take a little affront, umbrage, when I say -- I get the right from Herbalife to buy up to 35%. I get the right, and then I read that Ackman's saying I'm manipulating the market. I'm a manipulator because I said I wanted to buy the 35% and I didn't really mean it. So I said, well, okay. And then I bought the 2.5 million shares just recently. And he says -- I don't know what he said about that. You talk to him; I don't talk to him.

SCOTT WAPNER: You were mad -- correct me if I'm wrong -- that he went on our network, on CNBC, and said that you were getting out because you believe that Herbalife was, quote, toast.

CARL ICAHN: You want me to tell you the honest truth? I'm not joking. I wasn't there. I wasn't really there.

SCOTT WAPNER: You just bought more than 2 million shares that day just for a goof?

CARL ICAHN: Well, it was down 10 points, wasn't it?

SCOTT WAPNER: Because they thought you were getting out.

CARL ICAHN: Well, maybe he did me a favor and got it down 10 points. You ever think of that? Maybe I did want to buy it. Maybe he was wrong.

SCOTT WAPNER: You did consider getting out.

CARL ICAHN: Is that a question or a statement? Because, you know, I'm not going to answer it.

SCOTT WAPNER: Maybe it's a little bit of both.

CARL ICAHN: Go to the next question.

(Laughter.)

SCOTT WAPNER: Why do you continue to believe in that business after the settlement with the FTC raises a number of serious questions about where that business could potentially be years from now?

CARL ICAHN: Look, the FTC was involved, in my opinion, because of Ackman. Pure and simple. He got that senator to go in and get them going. That's my opinion on that. But then I don't know. I'm -- actually, the FTC, when I look at regulatory agencies, by and large, I think they've done a pretty good job by and large on things. So I'm not here to argue about what they did. I think they took maybe too long in looking at this company. I honestly will tell you that I think that they know -- or maybe they're not saying it -- that we never were and we're not a pyramid scheme. We make a real product.

A pyramid scheme is I give you this little pencil, then you get three other guys to sell pencils. And it's all bullshit. And that's not true here. We make a product; people eat it. But the interesting thing about Herbalife is -- the irony is, that Ackman is wearing this white hat, he says, and I'm trying to save these poor women that do this thing. And that's their only livelihood. They're out there. They have their friends. And the friends go and they drink this drink. And you can say it's no good -- I'm not going to -- but I will say they make some good products, I believe.

I personally don't like the drink. I drank it. It gave me a lot of gas. I didn't like it.

(Laughter.)

CARL ICAHN: But a lot of people love the damn drink. And I drink this vitamin C, this vitamin thing every morning. And I haven't got a cold since I've been drinking it. I've been doing it for two years, put it in the thing, drink this stuff. Okay. My point to you is they make good product. One.

Two, there is something to this last mile concept. There are people -- when I was a kid, I was 14, I was always working. I sold Fuller brushes. You knock on doors. Some people like it. Some people slam the door in your face. And you go to your friends. And the friends buy the Fuller brushes from you.

And that's what these people do. And they make a living from that. And some people make a great living from it. Now, did they go too far, some of the salespeople go too far, the distributors, and say how you could have a Mercedes Benz? I don't know. But the real issue is that these people have jobs and are working because there is a model in our society where everything is going to be bought on the Internet.

And, by the way, our retailers don't personally sell you. There is a model for personal sales. And the irony -- here's the question for Ackman too, that, you know, with it all, the sales in the United States are only, I think, 15 -- not even 20%. So it's only 20%. United States, I think, will do fine. I think there are regulations. And some of those regulations in an ironic way are maybe good for Herbalife because we've spent all the money and the technology to police them. We already spent it. Some of the smaller sales operations companies are going to have trouble. So it might even be good.

Then let's go outside of the United States, where this model really works. You know, China, first quarter was up 36% over a year ago. And I think second quarter, 14. It's choppy. I mean, it's going to be down and up. But it's still going up. And that's going around the world. So you've got a model that I think works. And if I'm wrong, I'm wrong. I'm not here to sell Herbalife. But I am telling you that I'm not just playing games buying the stock.

I think it works. I could change my mind. But I would tell you this, that I also looked, because I'm a market specialist, as I told Janet McCabe's secretary, and I think I know markets. And as far as I'm concerned, I think -- I don't want to say it in a bad way about Ackman, but no professional would really want to be short a company where you got 92 million shares outstanding and 28 million short. And of those 92, I own 20%. I've said I've got permission to go to 35%. And here's a little secret for your show, that I've asked permission -- I've gone to the FTC to get accelerated treatment for the right to go to 50%, up to 50%, which is going way up. I only have the right to go to 35 --

SCOTT WAPNER: Up to 50%?

CARL ICAHN: Well, you have to do levels. And we went. And if you think I'm fooling, I mean, maybe you don't think it's a lot of money, but I came from the streets of Queens. I had to give them $280,000 to waive the accelerated approval. So that's not out, but it will be out anyway. So I'm telling it to you.

So Ackman loves to think that I'm going away. But how do you go out on TV and say what a man thinks to someone else? I mean, you want me to tell you what you think? I mean, you like the girl walking down the street. And your wife calls me up, what the hell did he say that for? I think it's absurdity.

So I think that tells you something. Now, the 92 million shares outstanding against the short position, 28 million, I don't think that Jim Chanos or any professional short seller will touch it with a 10-foot pole. And I sure wouldn't touch a company like that unless it was really on the verge of bankruptcy. And even then, why do you do it when I'd say -- even today, 28% of it is closely held. So you got 92 million, take away 30 million, you got 60 million floating out there.

What if somebody does a tender offer. I mean, I'm just saying it comes up. Now, I'm not saying anybody is doing a tender offer, but I'm saying this is why I look at things technically too.

SCOTT WAPNER: Would you do a tender offer?

CARL ICAHN: Is that a question?

SCOTT WAPNER: Yeah. Did you hear how it ended up? Offer? Offer?

CARL ICAHN: I would consider it. I don't mean -- now, I got my lawyer sitting out there somewhere. This is not a 13D thing, because I certainly have not made -- I don't have any stated intention to do it. But there again, it's something I've thought about. Doesn't mean I will. And I think there are other people that might. I think Herbalife is certainly a candidate to go private.

In fact, frankly, wearing my Shell Oil hat, I think Herbalife is a lot better off private and getting away from this type of Ackman-type criticism. I mean, you know, Ackman is out there driving everybody crazy, which, you know, is his right to do. He's obsessed with this. And don't get me wrong. I think Ackman's a smart guy. I think he's just obsessed and gets obsessed. And when you're an investor, and a good investor -- you said something before. When you're angry.

If you're a really professional investor, you can't get angry. It's like looking at a tennis match. You think Djokovic got angry or -- a great player doesn't get angry. He studies it. You know, they have this whole thing about that. And I don't want to get into it more than that. But I am saying to you that what I will tell you --

SCOTT WAPNER: He might not get angry, but he might try to get even.

CARL ICAHN: Well, he won't get even if he gets angry. I'm just telling you that -- not against another pro. If you're watching tennis guys, I mean, they get angry, they got no chance to win. You can't do that.

SCOTT WAPNER: No, I hear you. You said -- and you said it on January 25th of 2013 on CNBC -- that this could be the mother of all short squeezes. It sounds -- January 25, 2013.

CARL ICAHN: See, you got a good memory. It's like what I said when I think about "Danger Ahead." So now you're saying I'm wrong because it hasn't been the mother of --

SCOTT WAPNER: No. I'm saying I'm wondering -- are you laying out the case and laying out a scenario by which that would come true?

CARL ICAHN: Yeah, look, I don't want to be here telling you in any way, shape, or form you should run out and buy Herbalife because that could happen. But I said it before. And if you're asking me why I said it, I'm telling you why I've said it. Because -- and I'm looking at the numbers today -- that it is, I think -- and, again, I think Ackman's smart, but I think in this case it's absurd to have a major short position. And then it gets more technical if you want -- so you have a lot of derivatives out there. But those derivatives translate into shorts by the people that sell the derivatives.

And they're not in to lose because they don't care about Herbalife. They probably don't even know what they do really. These guys do derivatives. I'm not knocking them; that's what they do. They're all mathematical, real smart guys. So they do a derivative and sell -- and short some stock against it and all that stuff.

So they have it in their contract, I would assume, that if anything like that hits, like a tender or anything like that, they want the thing out, their contract is torn up, I think. Now, I'm not -- I'm just telling you, when you get into this kind of a business and you're a professional, you got to do your work. And, honestly, in the case of --

SCOTT WAPNER: Yeah, he did a lot of work. He did a lot of work.

CARL ICAHN: Can I tell you, I don't agree with that. Can I tell you that? Now, I'm not -- I really hate to get into this because I really think he's a smart guy. And, in a strange way, I know you going to not believe it, a year ago, at the tennis match, I talked to him. I know you don't believe it. I sort of liked him. He's sort of a --

SCOTT WAPNER: I did believe it.

CARL ICAHN: I sort of like him. I think he's smart. But the real issue is, I think he put a lot of credence, when he first did it -- I know one, shall we say, didn't do what he thought he'd do. And he didn't go out at that conference and talk about how bad Herbalife was. And I think Ackman was shorted, so Ackman then decided I think it's bad. He read this report by -- I think the Indigo Girls or something.

And you know what? It's a big report. So I think I'm one of the few guys -- and I really believe Ackman being smart, I can't believe he really read the report. Because I read it, and it was hogwash on my part. And it's not what a professional report should be. I'm not mad at them, but how can anybody really know the intricacies of a company like that?

And so I remember reading it. I spent three hours reading it. I said bullshit. That's why I bought it. Now, I will admit to you, at that point, I was mad at Ackman, I will say. So I -- but I didn't buy it because I was mad at Ackman. And I might not have read the report if I wasn't mad at Ackman. I think about that. And that's possible.

But that doesn't mean I did it because I was mad. In fact, I was helpful. I read it because I was thinking, hmm, I'm mad at Ackman, he's got a little trouble here, why don't I read the report and see what's going on? Because, you know, guys that don't like it were calling me up and saying why don't you go buy the stock? And I was thinking, oh, I'll take a look at it. When I read it, I said, this is complete nonsense, this report.

SCOTT WAPNER: Let's end on a different topic. Let's just bring it full circle back to the market and leave our esteemed guests here today with your view, say, the end of the year. The Fed could move twice between now and then. We will have a new president elected by then.

How will the stock market look at the end of the year versus where it looks today? And "I don't know" is not an acceptable answer.

CARL ICAHN: Well, it's like saying will the farmer's wife shoot another 7 in Vegas? And then you ask me, well, will she? And if I say I don't know, you say it's not acceptable.

SCOTT WAPNER: Does the Fed move twice between now and the end of the year? Does the Fed move at all? And if so -- I know you've said it doesn't matter, but you must believe that the stock market is going to react one way or the other.

CARL ICAHN: Yeah, but I have to tell you, I think there are very, very few people in the investment community, let alone in the world, very few that could really figure out what the Fed's going to do, including -- I'm not sure, if you ask the governors, they know what they're going to do coming up.

So I really will tell you that it's foolish to spend time thinking about it, because you just don't know what they're going to do. And you got all these pundits figuring it out. And it's really like, you know, when you -- the medieval times, when the friars would go around and argue about how many angels on the head of a pin, you know, that type of thing.

I just don't waste time thinking what the Fed is going to do. But I do spend time thinking about the macro problems of this economy. And I think that, to me, is -- I mean, it's not a sure thing. Nothing is a no-brainer when it comes to that. But if you look at the macro problems in this economy, they're many. And we may get through that precipice, get to the other side. You'll be sitting here talking to me maybe and saying, well, you said they're going to do this or that. I said, hey, you're walking on that precipice. You're walking on a ledge up there. And you're walking on a very thin ledge. And I think the chances are very great you're going to fall off. But it doesn't mean you can't get across that ledge.

SCOTT WAPNER: That's a perfect place to finish up. Thank you so much, Carl Icahn.

CARL ICAHN: Okay.

(Applause.)

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