Icahn says market falling off precipice

NEW YORK (Reuters) - Billionaire investor Carl Icahn told television station CNBC on Tuesday he thinks more bad news could come out of the market, such as from commercial real estate, which he thinks could still be hit pretty hard.

The equity and debt markets have been faltering since the summer when failing subprime loans caused a credit crisis.

All three major U.S. stock indexes ended down more than 2 percent on Tuesday after a record quarterly loss at top U.S. bank Citigroup Inc. (C.N) and a surprise drop in December retail sales fueled recession fears.

"The market ... obviously you see how bloody it is, there are a lot of problems in it ... It seems like we are falling off a precipice, it doesn't look good," Icahn said in a telephone conversation broadcast on the channel.

"The banking system is clogged up," he said. "It's not the end of the world forever but there are still I think shoes that could fall, for instance commercial real estate could still be hit pretty hard -- there was just too much leverage put on them..."

Asked about biotechnology company Biogen Idec Inc (BIIB.O), he told CNBC: "I still have belief that it is a great company and that somebody will buy them. We are still looking at that and are still in contact on that."

Icahn pushed Biogen to offer itself for sale in October, but Biogen failed to attract a buyer. In December, Biogen said it would remain independent.

(Reporting by Megan Davies, editing by Phil Berlowitz)