(Bloomberg News) Wilbur Ross, chairman of private-equity firm WL Ross & Co., said he expects the U.S. to avoid another recession while entering a "subpression" marked by little economic growth and few new jobs.
"We don't think it's going back into a recession, we think it's more of a subpression, where you have a slight economic growth, but a relatively jobless phenomenon," Ross said today in an interview with Deirdre Bolton and Matt Miller on Bloomberg Television's "Inside Track." "It's a new kind of an event for us to be in. It's not technically a recession, because you're not having declining gross domestic product, but it sure feels like one to the people who are losing their jobs."
The 73-year-old billionaire said he is more worried about European economies than the U.S. as those countries grapple with bank and sovereign-debt woes. Ireland will be the first European nation to recover, he reiterated.
WL Ross is among five institutions buying a combined 35 percent stake in the Bank of Ireland Plc, the country's largest bank. The private-equity firm, which also invested in Virgin Money Ltd., a credit-card company in the U.K., is finding more deals in Europe, Ross said.
"Two or three years ago we weren't seeing that much in Europe, and now you're seeing stuff from every place in Europe," Ross said. Still, "it may be a little bit too early" to invest in distressed economies such as Greece, where sovereign-debt resolutions remain uncertain, he said.
Housing Crisis
Incentives to refinance home mortgages may help the U.S. economy, James Lockhart, vice chairman of WL Ross, said in today's interview. Lockhart, the former director of the Federal Housing Finance Agency, said a program similar to the Home Affordable Refinance Program, which refinanced 800,000 home loans, could help lower costs on about 30 million mortgages held by Fannie Mae and Freddie Mac, he said.
"If you push that program, because interest rates are so low now, you could get a lot more people refinanced, and home mortgage payments can come down," Lockhart said. "That could help the economy come back."
Ross, whose firm invested in Dallas-based natural-gas producer Exco Resources Inc., said "sensible regulation" is needed to expand hydraulic fracturing, or fracking. The process, which involves injecting water, sand and chemicals into shale- rock formations to extract natural gas, is opposed by some environmental groups.
"Electricity does not grow in the wall and just need to be liberated by putting a plug in," Ross said. "Somebody has to generate it. It's silly not to develop fully an abundant natural resource. We have up 100 years' supply of natural gas, mostly shale. It's much less pollutant than coal, and much cheaper."