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Ross: Markets Headed Up From Here

By Julie Crawshaw   |   Wednesday, 29 Oct 2008 10:20 AM

WL Ross CEO Wilbur Ross believes yesterday’s market rally means markets may have hit bottom and are headed back up.

“The market shrugged off really horrible consumer confidence figures, a record low since the ’60s,” Ross told CNBC.

“Often, when a market shrugs off very bad news it’s a pretty good technical sign.”

Even better news, Ross says, came after market close: $67 billion in commercial paper was issued, 90 percent of which was bought by the government.

“They’re starting to unclog the short end of the credit spectrum and that’s something we’ve been needing,” Ross says.

“The real problem in our credit markets hasn’t been so much the cost of money as it has been the lack of availability of money,” Ross says. That’s why I focus more on commercial paper and the municipal bond market more than on rate cuts.”

“Think about it: If you’re turned down for a loan, what difference does it make if the loan was at four or five percent?”

Ross, who is a distressed asset investor, says his company is focused on buying municipal bonds, some of which now pay 200 to 250 basis points over Treasuries.

Municipal Market Advisors CEO Tom Doe sees more of the same in muni bonds.

“We saw the strongest rally in the municipal bond market, I believe, in history,” Doe told Marketplace.

“Once (investors) understood that the falling price was a liquidity issue instead of a credit issue, they felt very comfortable owning bonds.”

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WL Ross CEO Wilbur Ross believes yesterday’s market rally means markets may have hit bottom and are headed back up.“The market shrugged off really horrible consumer confidence figures, a record low since the ’60s,” Ross told CNBC. “Often, when a market shrugs off very bad...
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2008-20-29
 

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