Wilbur Ross knows how to spot megatrends. For example, he built a steel empire – by purchasing bankrupt companies – and made billions. Oh, and he also predicted the current credit crisis.Well, today Ross was on CNBC and provided some sage advice on the current economic morass. In fact, he discussed his straightforward plan on dealing with the credit crunch (which has been effect for about a year so far).
His proposal is called the "good bank, bad bank" approach. Essentially, it means setting up a third-party entity to take bad loans from Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE). Interesting enough, this was the strategy to deal with the S&L implosion during the early 1990s. And, for the most part, it worked.
According to Ross, the US financial system needs to focus on the good loans – which should stabilize things and lead to more lending. Ultimately, this should spark economic growth and get things back on track again.
Tom Taulli is the author of various books, including The Complete M&A Handbook
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Reader Comments (Page 1 of 1)
8-18-2008 @ 12:52PM
Bill Dollar said...
Wilbur Ross is one smart cookie and people should give his idea's serious thought!
8-18-2008 @ 1:01PM
Bill said...
Real smart....the Execs that broke the bank...get their cash and go away....The govt installs their buddies to run the new bank at inflated incomes....and the tax payers suck it on the bad bank.
Works every time.
What a joke.
8-18-2008 @ 8:16PM
winslow said...
Bush should have been listenening to intelligent individuals such as Ross over the last few years
8-19-2008 @ 10:18AM
carlito said...
Smart yes he is but here is what people don't realize is that back in 2001before 9/11 when they lower rates one of the things greenspan did as well was make sure that all these banks either Originate loans or invest in MBS i believe there was a Percentage they need to have in their Portfolio
When I started out in the mtg industry this is what was told to me which at the time made in the buisness to be in