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Ross: Consumer Leveraging a 'Giant Ponzi Scheme'

Billionaire investor Wilbur Ross, chairman and CEO of WL Ross & Co., shared his insight on Obama's economic plans, the SEC, the housing market and more with CNBC.

Ross: Consumer Leveraging a “Ponzi Scheme”

“Basically it (plush times) all came from the consumer, and it was consumer income, it was consumer leveraging. Median income in this country actually went down from 2000 to 2006 and so basically did net worth…in a sense that’s a giant Ponzi scheme itself, it makes Madoff and everybody else look pretty small.”

Ross: Pay SEC Workers More

“There’s all this talk in the administration that we need more regulation. I think what we really need is better enforcement. There’s nothing that (R. Allen) Stanford did, if he did what they say, or Madoff that wasn’t illegal under present law. So you don’t need new regulations, what you need is somebody capable of going in and really looking at these places and finding this fraud…I frankly think they should pay people better in the agency, because paying people better would tend to attract better people.”

Ross: Recession to Last Until 2010

“I think there are some parts about (the stimulus package) that are good. I think though it’s not going to be a silver bullet that solves everything in a very short order. Even the tax things are going to take some months to start, then they come in very gradually over time. The infrastructure things come in certainly very slowly over time…I think it’s a good idea, but it’s going to take a while, so to me the earliest anything good will happen is sometime in 2010.”

He also suggested the government's mortgage plan for stemming foreclosures should be broadened. Principal reduction options should be available for both performing and non-performing mortgages, he intimated.

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