Carl Icahn Talks Trump, EPA Rules, Asset Markets and AIG

Let me begin with this. Last week, you were on Twitter talking about Donald Trump's economic plan. You were subsequently out on Twitter urging people to read it and recommending it as the solution to America's economy. Yesterday, you were sparring with Mark Cuban on Twitter about the presidential campaign, Hillary versus Donald. And now I understand you're talking about starting a super PAC that would effectively be pro-Trump. Does this mean that Carl Icahn is finally, some would say, about to throw his weight and perhaps money around in this presidential campaign?

Well, I think I made it pretty clear all through the campaign right at the beginning that I think Trump's policies are possibly the only thing that's going to save us from going down this decline that we're in on productivity, which is very important in this country. I really think that we've had a tremendous decline in capital spending, which everybody knows. I'm not making that up, and a major decline in productivity growth. Now, if you think about that, I think one of the major reasons for it, and I'm a little microcosm of it, is that some of these regulatory agencies, the EPA in particular in certain things, I'm not against regulation. I think certain regulation is very important. I'm not even against some of the financial regulation that you have, I think.

that some of the investment banks really caused a lot of problems in '08. But I am against what I consider to be just arbitrary and capricious regulation, such as what the EPA is now doing concerning refineries. So that's a microcosm of what I'm talking about, which absolutely scares business. Business looks at this as a war between business and government, and therefore, Eric, today, what happens is that a CEO, and even a mediocre CEO, and I'm certainly no fan of mediocre CEOs, there are very good ones, but many mediocre ones, that go in and say, 'Okay, we've got the great advantage of zero interest rates, and what we're going to do is borrow money, buy back stock, instead of investing in capital,'

which gets their stock up, they're vested, they make 50, 100 million bucks, or whatever they make, and they go play golf the rest of their lives. And the worker, the middle-class worker, suffers greatly from it, which they are today. And you need someone to come in with a fresh broom, and in certain cases with these regulatory agencies, take hold of what they're doing and showing business that we're not against them. And that's why I'm for Trump and that's the whole story in a nutshell.

I understand that. What I was getting at with the question, and perhaps I didn't articulate it well enough, is I'd like to know more and I think there are lots of other people who'd like to know more about what you're going to do beyond endorsing Donald Trump the way that you have, talking up his economic plan the way that you have. Are we going to see a super PAC?

If we do, what's it going to do? I am considering it at this moment in time. What I am doing at this moment in time is really moving against some of the regulations that the EPA has swept under the rug, but I think they're completely and totally illegal. They're going against refineries. And you're going to see in this country a lot of smaller refineries go bankrupt as a result of these regulations where these refineries are simply, to make it simple on this TV show because it's a little more arcane, you know, are penalized for something that they can't do. They're asked—they're saying that they're responsible for blending with ethanol. That's fine, except nobody will buy the gasoline that we blend with ethanol.

I own refineries. Obviously, I have an agenda here. But, you know, that doesn't matter. Nobody was really standing up to what the EPA is doing. So that's just one little example of what is wrong with our economy, and that's all I'm saying. So I'm really getting involved in that at this moment in time. And I didn't go on the Economic Committee, as you maybe know or don't know, because it gives me the room to do a PAC, and we're considering that, too, and I think we will do one. But I don't want to say I'm definitely doing it until I am doing it. But I am saying that we came out with a big paper, and we're going to continue... Really, literally, to fight what the EPA is doing. We think it's illegal, but more than that, it's...

I think it's reprehensible.

It's one thing to write a letter to the EPA. It's another thing to start a super PAC that would challenge some of the regulations that you find so chafing. It's another thing, wouldn't you agree, to conflate some concerns that you have about specific, and as you put it, arcane, weedy regulations that are in place governing refineries and renewable fuels with a whole presidential campaign, isn't it?

It certainly is. It certainly is. But they're not mutually exclusive, obviously. And I don't want to say on this program that I'm going to invest $20 million in a super PAC until... As we speak, I am actually talking tonight to the people that will be working with me on the PAC. However, that being said, I don't want to say something here that you could call me back a month from now, two months from now: 'How come you never did what you said you were going to do?'

I'm not going to say it to you now. I am saying to you that we are going to be in a, shall we say, argument. with the e-p-a don't get me wrong because i believe some of the stuff the e-p-a does does is salutary i think it's necessary in fact but what they're doing here I honestly can't understand it. You know, I've been in fights with companies all my life, all my business life, where I think what they do is wrong. I think it's dysfunctional. But there's always a good argument. There is a good argument for what the EPA is doing. I mean, this is about, you know, I fought U.S. Steel in the old days. I fought with Tom Warner. I fought, as you know, with so many companies and companies. You know, at the risk of being a modest, make billions and billions and billions for investors.

Now, if you're going to say to me, 'Well, Carl, didn't you make a lot yourself?' Well, sure I did. You know, this is what the economy, this is what our capitalist system is about, you know, incentive. But what I'm trying to tell you is I've never seen anything as absurd as what the EPA is doing here.

Let me ask you this, then. What matters to you more right now, today, as we speak: making or somehow forcing the EPA to make these changes, whether it's through the power of your pen, the people who might be watching this conversation, or a super PAC you could start? Or, so, on the one hand, I'm asking you, what's more important: getting the EPA to change these rules, or putting Donald Trump in office? I kind of want to know where they stand on your list of priorities. Mutually exclusive, no, I recognize that, and, uh, again...

I'd very much like to see Trump win this because I think he is the only hope to save business in America the way we know it. I really mean that, Eric. I think that right now our economy is really not doing well. You see, GDP is not going up. I could give you a lot of reasons. But the most important is that the middle class worker... This really does not have good jobs. These unemployment numbers are not accurate in one way. A lot of these guys have left the workforce at two. These jobs aren't paying that well. So I am saying that the middle class... that is why you saw this uprising uh you know for bernie sanders and and you see it for trump and you see brexit and you see what's going on in italy i think there's an undercurrent of great distress in our global economies you know this one percent people resent it and they resent government for allowing it to happen and by the way the epa in this rule in this very small rule

is helping Big Oil, which I don't even think they understand. Helping... they're helping Big Oil, and, and they're helping a couple of very wealthy companies make a fortune and putting the smaller refiners out of business. Okay, that alone you could say, 'So big deal,' but that is why there is distrust

of what is happening in government and this is what i'd like to do something about and if i believe i could make a difference with trump i'll do it but i have to really believe i'm going to make a difference let's talk about that for a moment because you threw a number out there for what you might spend in the super pack twenty million dollars what would it take for you to spend more money on the trump campaign because to my knowledge thus far you've only spent a hundred grand maybe a lot to some people but to a Carl Icahn isn't a great song.

In certain ways, I supported him. I mean, you know, when they had that... but what do you have that rally for the veterans which would be great the veterans report anyway so i would have done it but i gave a half a million immediately when they asked me to at that at that uh... but that evening thing that you know what he would against beckett more but kelly i think it is so in other words i did a few other things but being that said i'm not looking for praise for that what i am saying to you though is uh... i want to really believe that Donald has a shot to win. And you don't? I do believe it. I do believe it. And I'll say this publicly.

But the way you say it, it sounds as though you're trying to persuade yourself that he has a shot at winning.

Well, you know something, and maybe I shouldn't be saying it on Bloomberg, but I will say it, that I do believe that Donald has a great shot if he sticks to the positives, not so much to the negatives—meaning if he just talks about the economy and what I'm saying, and tell the worker in those swing states, 'Hey, look, here's the thing, you know, Hillary Clinton's making all these promises. I mean, I'm going to give you broadband for everybody. I'm going to do tunnels and bridges and all that.' Where's she going to get the money? You've got a divided Congress and gridlock. She's not going to get the money, so she can promise anything. And to some extent, you could say Donald could promise it, too.

But the one thing you know Donald can deliver is he can change the regulatory agencies as president. He doesn't need Congress. You've got to look at things you don't need Congress for. He doesn't need them about immigration. And by the way, you know, I, I think it's a little bit ludicrous to let people come into this country from the Middle East that tell you that they're looking to, you know, that ISIS is telling you they're looking to hurt the country, and, yeah, let these people come in. So these are the things he could deliver. And that's what he's got to stick to. So why isn't he listening to you?

I have to presume that you're offering him this advice. You and he saw each other this past weekend. Did you not tell him?

Well, this weekend was pretty quick. I mean, I came in, left. But I do talk to him, and I am going to keep talking to him about it. And he knows this, too, that he's... Look, I think Donald is great when he speaks about these things. I think his economic message two Mondays ago was terrific. And if he sticks to that, he's going to win. But... And I am going to... People are telling him, 'Hey, you're down in the polls because... Forget all this, you know, negativity and arguments, and even negativity where it is factual, you do.' And so that's one reason I won't do a PAC that's negative against Hillary Clinton. I'll do a PAC that's positive about Donald Trump and his economic, you know, beliefs. And this is where...

You're asking, and maybe I'm saying too much. I think Donald's great. I think he'd be a great president. I believe it. A lot of my friends don't. A lot of my friends are mad at me for this. But I believe it, and I believe he is exactly what this country needs. But what he has to do... is get that economic message across instead of just talking glibly about issues that really don't mean a hell of a lot.

Carl, why isn't he listening to you? Why isn't he listening to Tom Barrack, who told me the very same thing yesterday?

Well, you know why? I don't know. Ask him.

Well, that leaves you in kind of a problematic position, doesn't it?

Look, Erik, you know, you've got a strong point. A strong point about Donald is he's got a strong personality, believes in himself, and that's really good. I know what he is. He will build a consensus in Congress. Hey, look, negatives and criticisms you can make about anyone. But that is what I think is becoming a problem. And so if he would just get on that positive note about this economy, he'll win this election. Because the middle-class American, I believe there's a great undercurrent. They are very disabused about what's going on. Hey, look, I invest a great deal of money. I own 20 companies. I've turned them around. They were negative. They were dying. We cleaned them up. We have 93,000 people working for us at IEP, you know.

But here's the issue, that right now, literally, I've cut down capital spending. And I'm scared of it when I see what the EPA is doing on this stuff. And if I'm scared, can you imagine what all these smaller businesses are? They are killing the smaller business, and Hillary Clinton hasn't said one word against some of these crazy regulations. And I'm not the only one saying, a lot of the regulations, they've run amok. They've run amok. Now, I want to make it clear, there's some great regulations, there's some great regulators, and you need regulation. In fact, I say that to the consternation of some of the Wall Street friends I have. that you don't need it and if you had better regulation you wouldn't have had a way but what they're doing today has gone crazy and that's why there is no jobs for the middle class because there's no capital spent if you have worn out tools you may be right carl that donald trump can

—if he were in the White House, do some things on his own, exercising similar executive authority that the president has over the last several years about immigration, you pointed out, and certainly in some respects about regulation. But he's made similar promises to Hillary Clinton when it comes to trade agreements and also on infrastructure. Are they not similarly false promises if he has to turn to Congress to get help on those?

Every president, you could go back to George Washington probably, has made promises they can't keep, okay? And I think Donald believes he'll keep them, because Donald believes he'll build a consensus in Congress, but it's a question. I agree exactly with what you're saying, and I think he has a better chance of delivering on those promises than Hillary Clinton. So therefore, let's look at what he will definitely deliver. What he will definitely deliver, and this is the point you should be making and you should make, what he will definitely deliver to the middle-class worker who's worried about his job and is not manufactured. And by the way, when you stop manufacturing in a country, all this other stuff is nonsense.

You know, you have a service economy, so we're going to just tweet to each other. What are we going to do, text each other? That's all. It's a great service economy. Eventually our currency will go to hell and we're going to lose our hegemony. So let's get back to my point. He can't know promise. And 100% he'll keep this promise, because I know how he feels about it, that he's going to stop these crazy regulations. He could do that first day in office. I've talked to him about it. I've talked to a team he's got about it. That is 100%. He could stop a lot of the crazy immigration, which I think is crazy. That you could argue. I think the regulations that you have, I mean, if I wanted to go in to the stuff that he's putting these smaller refineries out of business for no reason, the EPA has put them out, for absolutely no reason, I will say to you that he will stop that.

That's 100%. That's what you have to tell the swing state voter, the middle class voter who wants jobs and is sick and tired. up the status quo today and that's what he could do and if he does that he'll win I and one day I be I I you know I others progress before to go with how it saying Eric I can show you nobody's regulations are look I thought you would feel like what I wanna I thought all these companies that you know about and again the risk could be too modest make billions for shareholders make a lot of money for myself but the role that but I will cut you I've never seen anything as idiotic as some of these rules that are being uh... promulgated right now by the e p a i think that would put the central example what's wrong but there are many other examples of what's wrong and that's why i've been waiting so that's another good one a couple more anyway

what what what what's wrong but would would be with the agencies look at the NLRB look at some of the ruling they make concerning labor i mean so people are afraid really good deal with i'd you know i think uh... i would tell you i'd have a lot of unions work for the defined some of the terrible and and and then sub goes go up the reservation of the n o r b protect them hey i'm not against the n o r b i mean there's a look i i i i came to the streets of queens And I really do sympathize with workers. I've got many union workers. People think I'm too tough, but I'm not. I'm a tough guy, but I'm not against that. But I am against some of these... We've gone way too far in areas like that. Now, the FTC does a pretty good job of what they do.

I'm not against them, per se. I'm not fighting every regular... In fact, I believe in a lot of regulations, and I've had a lot of fights, as I said, fights, you know, disagreements with some of my friends on Wall Street, because I think you do need regulation. I think they brought down the investment bankers who are responsible. Okay.

Okay. If you're so certain that... I want to talk to you about the economy for a moment because if you're certain that Trump's economic message is going to resonate with people, if he could just get beyond the negativism, as it were, and talk about the positives and talk about the things that he's going to do, then he would have that shot that you believe he has at the White House. Why is it that—and this may sound like a simplistic question, it's not intended to be—why is it that the stock market is where it is, with valuations so high that I noticed in a letter that, or at least in a statement that you made with your son Brett earlier this month, that you don't feel confident making any large investments?

Absolutely, Eric. I think the market—and I've said it before, hey, look, I have hedges on. I have more hedges than I ever had. I will tell you, they're certainly good companies. It's way overvalued at 20 times the S&P, and I'll tell you why. A lot of it is a result of zero interest rates. It's just what I said. You have zero interest and a lot of buybacks. Money is not going into capital. So think of it as a rich family that just has a lot of... decides, 'We're just going to have a lot of fun. We're going to sit around the pool and we'll keep printing up IOUs to the town. We've got a good name.' You keep doing it until you go broke. And this is what's happening in our economy. Zero interest rates are building huge bubbles.

You have retirees that... saved a million bucks, half a million bucks. They call me, friends of mine, 'Hey, what do I do with my money? I have to buy stocks.' I said, 'Well, why do you buy stocks?' 'Well, I can't live on 0%.' I said, 'What's better, 0% or lose 30%?' And one day you can lose it. But they're doing it. You've got these bubbles building in real estate. In New York alone, the real estate market's through the roof. It's coming down somewhat now. It's absurd. And therefore, I think the market is at literally very high levels because of zero interest rates. And if you really look at it, the dollar is pretty strong right now, which is going to hurt international earnings. The S&P, they live on international earnings.

That's going to be hurt. There's going to be a day of reckoning here. I've seen it many times in my life. When things look good, they look great. You go into the sky. But that's when you have to really pull down and push. really stop by. Being that said, I'm not going to tell you it's going to happen tomorrow or next week, even next month, even next year possibly, but it's going to happen, and you have to change the direction of our economy. So I can't say it plainer than that. And Trump will change it. and bring in and rein in some of the abuses and get capital spending on it. Look, Hillary Clinton said it. I mean, she said it pretty well. Let's unleash the great power of our companies, except the next sentence.

'But we're going to tax them, and we're going to regulate them. But, oh, we're going to get them spending.' Well, it's a mishmash of contradictions.

Your point on capital spending may be bang on. I'm not an economist, and so it's not my position to say either way. But I do have to point out, Carl, that there are a few cynics out there hearing you complain about companies levering up to buy back stock who remember, unless I'm mistaken, that you have asked companies to do just that on at least one notable occasion, if not more than one.

You're very right, and let me address it. Apple, we said they should buy back stock, and they made a great deal of money doing it, because Apple had $200 billion sitting there, and they had extra money. It didn't affect their capital spending one iota. And their stock was dirt cheap when I told them to. And as you know, I mean, look, again, I don't want to just be boasting, but we bought Apple at one of the cheap prices, and I told Tim Cook, 'You should just buy back your stock. You have all this cash sitting there.' And I think I was somewhat instrumental in getting them to do it. But that doesn't mean that a lot of these companies that are over-levered today, and not really what I consider to be making true earnings,

borrowing money and buying back stock this is making a false market but worse than that it's caused it's costing them uh it's causing them to have worn out tools for their workers it's costing them the uh the ability to to go into new things and and therefore they should not be buying back stocks so it's like saying you have two sons that you know what maybe one is sickly you have asthma or something and the other side is a great shape and a great athlete so it's okay for him to go swimming for three hours it's not okay for the the kid with asthma or without feeling well to go do it therefore there are companies that should buy back stock there are good regulators there are good regulations same idea there are good ceos but that doesn't mean that it you know there's a broad brush here that you you go to use and you can't do that

At least I can't do it. So that's my answer to that one.

You say, Carl, that a day of reckoning will come for the stock market. You can't say whether it's going to be this week, this month, even this year or next year. Let's talk about the factors that you believe would precipitate such a correction. What's going to cause stocks to fall?

Eric, I think I've been talking about it this whole interview. One of the things that's causing it to fall is happening right under your nose, that we have no capital spending. What I say is none. Capital spending is going way down. In a society like ours, manufacturing is important. I don't care. Sooner or later, you can't just keep tweeting to each other. You can't text each other. We say we're a service economy. That's great. We're a service economy. What does that mean? Do we text more to each other? Sooner or later, everybody is going to text to each other. It's not wonderful. So why should anybody work? Just sit there and text to each other or watch TV. So, I am saying to you, this is what is happening as we speak.

Capital spending is down. Obviously, capital spending. In the last two years, I mean, it's just down 4% in the last quarter, which is unheard of when you don't have a recession. Okay, productivity. Productivity has not grown. In fact, it's the lowest point it's ever been as far as growth goes. These are very important things in a capitalistic system. Unless you have a dictatorship, you're going to go the way of Cuba. Well, Cuba was a dictatorship, but it still went that way. But then you're going to go the way of Venezuela or Argentina. You're going to be in a major problem if you keep doing it.

I realize, and I think most people realize, that unhealthy economic conditions are not a recipe for rising stock prices. But for stocks to go down, people like you are going to have to start selling and either moving your money into fixed income or into cash. You said that you're more hedged than you've ever been, but apart from a couple of small dispositions, you're not selling yet, right?

Well, no, not right. You know, it's obviously not helping my position, but I have to admit I'm short a great deal of the S&P, but I'm long more than I'm short. I mean, I can't help it because I own so many companies that we run. We have assets in them. We've got investments in them, and each one is unique. I mean, we've got a rail car fleet that stretches from New York to Ohio. I mean, we've got debt on it and all that. These are companies that we built over the years, Eric, and now we're proud of them. We own... a number of companies that... I just bought Pep Boys. I think there's a future in that. I won't go into that on this TV. But that doesn't mean... I own these companies, and I think they'll survive and do okay.

Look, I own the refineries, and we're unhappy about what the hell is going on. But look, I bought it at a cheap price, and we got the power to stay alive. But it's going to be very bad in that industry. But to get back to my point... I don't think it has to be people like me. I think it's just built on itself. I've seen it happen before, where you suddenly start realizing that these companies really don't have true earning power, and then fund managers start selling. And once that toboggan slide happens, it's going to be pretty bad, and I think it will one day. But, you know, there is nobody in the world—there's too many variables—to be able to predict when and where it's going to happen. That's just...

Just an insane way to spend your time. So I will just tell you that we have a problem, and Hillary Clinton will make it worse, because she believes in big, big, big government, but you must, and she said it, unleash the power of companies in this country. We're a capitalistic system, and you have to have companies that invest and have faith in their government. And over the last eight years, we've become more and more at war with our government. Our companies, you don't see them really spending. Now, you can say technology companies are spending, but when is that going to come to fruition? It may be years and years away. Actually, ironically, it's happened a little sooner than you think because you've got more and more people walking around using iPhones and whatever.

And, of course, you've got... uh... globalization to help you somewhat, but like, I mean, we could go on for hours and hours. I think, I think that that's one of the problems that you have. We're importing cheap goods from China all these years, and that's going to stop, so there's going to be all kinds of problems we could go into. I spend hours and hours thinking about it, you know. I'm a bit of a workaholic, and I read about it a lot, you know. And by the way, I am not the only one of what I consider to be real smart guys saying just what I'm saying. I mean, you know, if you read some of these guys, they're pretty damn negative. And I've heard it myself. They're the guys I respect the most, you know.

I've heard it myself. You make the point again about regulation. Absent the kind of regulatory relief that you're looking for, what do you do? You own these refineries through this company, which you control, called CVR, correct? Yes. So can you use CVR to do something else? Can you do a roll-up in the refinery business, buy up some other independent refiners to try and find some economies of scale that help you weather what you term this regulatory storm of sorts?

This is sort of a unique and almost insane problem. I mean, it goes back a few years, but the EPA has ruled in their great wisdom that we, the refineries, are responsible to deliver RINs. We're responsible. Think of it this way: we are responsible to blend a certain amount of ethanol. I'm not against ethanol, I'm not for ethanol, but we have to blend it. Now, that's absurd on the face of it because the—the people that use the ethanol, the gas stations, for the most part are owned by Big Oil or owned by these huge chains. So those guys say, 'Well, hey, we're not going to—we're not going to let you blend because we're not going to buy your blended gasoline.' So you say to the EPA,

How could I be responsible for blended what I'm—I can't help but when the gasoline—they say, 'Too bad.' They—they say, 'You have to deliver to us a certain amount of what they call RINs.' No, I understand the problem, and it is a thorny one. And as you have pointed out in your letter to the EPA, there's, uh, speculation going on in that market. Others have pointed out that there's fraud going on in that market. And I don't want to get, if you don't mind, Carl, anymore into it because it is weedy. But what about the alternatives? What do you do with a company like CVR? I mean, you're not about to get regulatory change tomorrow, you know that.

I have to tell you, we're a strong company, an IEP strong company. But I'm not telling you that we're not going to have trouble at our many small refineries. So what's going to happen is they'll go bankrupt or taken over by Big Oil. When that happens, and you take it over, you get an oligopoly. So what the EPA is doing, I believe inadvertently, is doing what Big Oil could never do themselves: get rid of its competition. The FTC wouldn't let them do it. I'd like to see the FTC step in and stop this crazy RIN business. So they are doing for Big Oil what Big Oil could never do for themselves. So what's going to happen is... in the next few years, these guys are on their backs, and we will be too. Look, I made a lot of money on this investment over the years.

I'm not crying, and certainly nobody's going to cry for me. But what I am saying to you is, Big Oil will take over these companies, and then all of a sudden we'll be facing another problem with gasoline prices go through the roof. That's one thing that may happen. Another thing that's—but what is happening is, and I keep saying this, rulings like this, what is understood, and a lot of companies, thousands of CEOs understand the problem. They say, 'One day, a regulatory agency, EPA, waves its wand, and we're bankrupt, or almost bankrupt, or lose a fortune. Why the hell should I invest in more capital? Why should I invest in more machinery?' Therefore, we can't compete. And therefore, the middle class does not have manufacturing jobs.

And we now say, 'Well, we're not a manufacturer. We're a service company.' Now, the thing that goes for this country, as you pointed out, is, you know, we're a reserve currency. But I don't know how long you could depend on that. So I am just saying that sooner or later, there's going to be a massive problem, I think.

I don't think—I don't see you backing down on the EPA issue. You pointed out earlier that you've gone to battle with many a CEO over the years. And I'm thinking of last year when you called for the breakup of AIG. AIG came back with another plan, and today they continue to execute on that plan, selling United Guaranty for some $3.5 billion. My question to you,

Yeah, and I'm proud of him for that. And, you know, Peter Hancock and I, I mean, don't see eye to eye on everything, but I really think that he and I see eye to eye on what they should be doing at AIG, and I supported him just recently when a few people were really wanting me to really go to battle, and I think... He takes it very seriously, and I'm hopeful that he's going to do a lot more of this. Now, there's a company, Eric, that should do buybacks, because as they get more cash, their stock is so cheap related to what they can buy it for. And they do have that money around, and there's no machinery they can buy. You know, AIG doesn't buy machinery. There is a company that should do buybacks.

Okay, each one is unique. I mean, everyone shouldn't, I can't say every company should do it. That's a good one that you just mentioned. I can't say more because we're on the board. I just do believe, hopefully, that Peter, I can't say more than that, should do buybacks. I'm saying wearing the hat of an investor. I'm not wearing the hat of being on the board, you know.

You were, you know, this was a, I won't call it hostile because maybe it didn't quite get to that level in a technical way, but it was an adversarial position. You're now on the board. Is he moving, you're saying that he's moving fast enough that he's brought you around to the idea that AIG can take this sort of incrementalist approach by selling assets and then returning capital to shareholders?

I'm going to tell you something sort of interesting, Andrew. You probably, you might not believe that, you know, I go into these companies, I see unique things they should be doing. I think in certain cases we fought with the CEO for a while and then we become very friendly, or friendly. I'm not telling you we have Christmas dinner together, but you take eBay with Donahoe, and yet, Donahoe, you know, we would get them to split it up. And what I would have put up, some of the things, he said, 'You're right, let's split it up.' And split it up was great. PayPal, they've got a great company. So he did, he did, little by little. You know, it's funny, Time Warner did just what we said, it took five years. With, uh, Forest, it was a piece of paper. So hang on a second. Are you saying that Hancock's going to come around to your idea that the company needs to be broken up into three?

i'm not even saying that because every one of my ideas that would have to be followed to the letter if if they've got those a general thing which i believe should be done okay i'm just talking general that if you have a company there that has great assets some of them i'd like to take this publicly so i can say it legacy assets they did not make as much money as other insurance companies a lot of these legacy assets they should be sold AIG obviously sells at a lower ratio than a lot of other insurance companies. I think once that is done, I think we have a good P&C company. It doesn't have to... And the life company itself, yeah, I think a good part of that life company should be sold. So it's certainly part of it in Japan.

So these are things I'm saying. You know, I've said it before. I'm not going to get into what the board is saying.

Are you still telling Peter that he should fight the SIFI designation? he should fight those civic deficit i get a lot i can't go into more than that because that's getting into the bulletin and i i can't i don't know that's fair talk that i shouldn't be talking to know that's fair that's fair let me ask you about how you know you just took a new position in Allergan was disclosed if i'm not mistaken yesterday what do you want to see happen there because as you know dan loeb is an Allergan and john paulson is an Allergan at least as of the end of june uh...

Is it just to sit back and see what those guys do? Do you have a different... I really can't talk about... I can't talk... Well, if I'm, you know, I don't... What I don't talk about, what a buyer... What I'm telling... I want to be clear, but Allergan, a unique situation that fell apart.

The Pfizer deal, yeah.

Yeah, well, the Pfizer deal wasn't all that meaningful. It fell apart, Pfizer, and it was tarred by the brush of Valeant. And it is not Valeant, okay? It's a separate, different company than Valeant. Brent is a great CEO. I worked with him at Forest. We made a fortune at Forest once he got to be the CEO. So I look at him as a great CEO. He knows what he's doing. And with the stock, you know, when I sold Allergan, you know, after Forest, we made a great deal of money with it, finally got that done. And then when I sold it, and then it went higher, I said, 'Hey, if it ever comes down, I'm going to do it.' And then it fell apart because it was really tarred by the brush of Valeant. And it's not Valeant.

And therefore, I bought the stock. I think it has a very good pipeline, but I'm not going to be on TV telling you people should buy or sell it, because I'm not even telling you what I'm doing. So, you know, I just want to be clear on Allergan. But I do think Brent is an excellent CEO, okay, and we've gotten along great. And look, a lot of these companies we get into, after a while, you know, they listen to the ideas we have. We've been around a long time, and we get friendly with them. It's not like a warfare all the time. You know, there's war and peace. The head of USX there, Roderick, years and years ago said to me, 'War and peace, God, war and peace.' We did it every day, for every month, for seven, eight years.

You know, I hold companies for eight years and nine years. But I'm just telling you, there's war and there's peace. And, you know, look at Motorola. Greg Brown was a great CEO there. Still is, I think. I don't own it anymore, but he's done a great job. He did a great job. So, you know, these are good—they're good people. And by the way, I think the EPA could be fine. I really think that they should just look at this thing and become rational. That's all I ask.

And you don't think that there's any chance that the EPA, as it's currently constituted, might—I'm just throwing it out there—might become more rational, might act differently in the Clinton administration?

Hey, I sure hope so. I hope that they change the obligated party. In other words, these RINs shouldn't be an obligation of the refinery.

On the refiner, the independent refiners.

And they ought to clean up the RIN market. There's a RIN market in it. And, you know, in any other market, you know, set up by an agency, you don't allow hedge funds and speculators to come in and buy the securities like the RINs. In this case, you have a lot of smaller and maybe larger hoarders, hoarders of these RINs. It's absurdity. And it's putting these companies under. So you hope that somebody will get rational. Look, I've been able to, when you work hard on something, and we do have a bit of the bully pulpit, go in and get something done. Get at least a rational trading in the RINs. Make it unlawful for speculators to come in and hoard them. When you have an unregulated... This is the largest unregulated trading...

I don't even know what you call it, a commodity in the world. You know... right but you know just said he's a funny guy he just told me on the phone we were talking he said i thought i told the new york times that interview i hope it gets out he says you know if pablo escobar alive today he would be doing coke you'd be trading rins carl one more before you before we go if you don't mind federal mogul you wanted to take a private the minority stake that's held by the public that you don't currently own it's trading above your last offer you still interested I can't talk about that. You know that. Come on.

I had to try.