Billionaire Carl Icahn told that there are too many exotic, leveraged products for investors to trade, and one day these securities are going to blow up the market.
The market is a "casino on steroids" with all these exchange-traded funds and exchange-traded notes, he said.
These funds, especially the leveraged ones, are the "fault lines" that will eventually lead to an earthquake on Wall Street, he said. "These are just the beginnings of a rumbling."
"The market itself is way over-leveraged," Icahn said on "Fast Money Halftime Report," predicting that "one day this thing is just going to implode." He described the possible implosion as "maybe eventually worse than 1929," making reference to the stock market crash that contributed to the Great Depression.
"The market has become a much more dangerous place," he said, adding the current volatility is a precursor of potential trouble. "It's telling you something, giving you a warning."
Investors are piling into index funds thinking they'll never go down, Icahn said. "Passive investing is the bubble right now, and that's a great danger."
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