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Wilbur Ross: Economy Headed For Stagflation At Best

Last Update: 3/10/2008 8:11:37 AM

NEW YORK (Dow Jones)–The U.S. economy won’t turn around any time soon, famed
investor Wilbur Ross, chairman and chief executive of WL Ross Capital, said in a
CNBC interview Monday morning.

“I think at best we’re in for stagflation,” Ross said. “I think the consumer has
been tapped out for quite a while and is frightened by the poverty effect of
seeing the house go down.”

In terms of overcoming challenges in the bond rating industry, Ross said “making
real triple As will solve a lot of the problem.

“The problem is we’ve had a lot fake triple As before.”

Ross recently announced plans to invest up to $1 billion in bond insurer Assured
Guaranty Ltd. (AGO).

Maurice “Hank” Greenberg, CV Starr & Co. chairman and chief executive, also
participated in the interview and concurred that a rebound is not on the
near-term horizon.

“Do you believe subprime is over? Then you believe in the tooth fairy,” Greenberg
said. “I believe there will be more downgrades and mark to market. If it walks
like a duck and quacks like a duck, we’re in recession.”

Greenberg also predicted slowdown globally, citing inflation in China and
European unemployment topping 7%.

“We need a fiscal stimulus,” he said.

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