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WL Ross & Co. CEO Wilbur Ross on how investors can profit from growth in the natural gas sector.
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Appreciate it.
Think what he has made billions of dollars investing -- distressed situations buying into industries and others can't sell fast enough so what is he buying right.
Now -- -- hear it here billionaire investor Wilbur Ross chairman and CEO WL Ross.
Joins us now it's always great to have you because your one of these people who looks around to see that fish or bad bird flopping around in the straits of Hormuz into the core -- do -- -- -- Yes -- -- -- in the shape of dinosaurs and then for use them.
But let's first talk about your most recent investment and that is into the gas tanker business that Lehman Brothers once had a made about a 110 million dollar investment just at a time when natural gas is extraordinarily low.
And people are waiting to see some kind of movement -- -- happen what is it about this investment right.
This is a group of moderate sized tankers so called handymax vessels twentieth to 23010.
-- tons.
But it doesn't carries.
-- and liquefied natural gas and ethylene.
Too small shallow harbors.
In less developed countries Indonesia.
-- Venezuela.
Africa places like but to very specialized kind of activity.
The longer term that's of -- its spending.
Growth didn't shale gas exports from the US.
As you know our country has lot of shale gas.
President Obama finally gave one export permit.
Just recently.
And we think -- be more come over time.
And if so there'll be a big demand because in these less developed countries many of the harbors a very shallow they can handle the very large traders.
Is this also an investment into your core belief system which you you believe very strongly in the free market power the market the power of the -- to overcome.
Difficulties and in fact.
The problems -- liquefied natural gas could be overcome if the incentive is there and with gas this cheap you've got to think that somebody out there's been invent a better way to liquefied right.
But will the problem listened so much the qualification technology it's a known technology can be done it's expensive.
But the natural gas at two dollars and change in the US and twelve to fourteen dollars and Asia there's plenty of room from the qualification.
We guess -- vacation.
And trends.
-- -- their new techniques now that you've looked at that seemed to be lowering that costs.
Know what's really lowering the -- is the excess supply in the US because so much of the shale gas has been found an association.
With oil.
And with oil at a high price the shale gas becomes a kind of byproduct.
So doesn't make too much -- one person so.
What makes perfect sense.
It's cheap here but in Europe where we were just at the Olympics for Fox Business -- fox sports all my gosh it is so expensive to air condition your home because natural gas is more expensive -- year.
Working off that spread.
When buying the transportation.
In the smaller vehicles and smaller vessels that can get to countries that need about -- that's exactly -- folks it's so simple when he doesn't.
-- you -- -- look -- but what do you then say five natural gas -- so.
We -- -- quite separately from the navigator.
Have a very large position in exco which is in fact in the business.
-- exploring for and producing.
Shale gas here in the U us.
There's another business which is has been derided.
And that is municipal -- of course a lot of the predictions.
Of some people -- will not be mentioned this wanted to have turned out not to be the case -- some people said that they were gonna go down there haven't gone down.
Assured Guaranty is is one company that you Fred they they insure municipal bonds so you put you're sure -- in that company -- so do you believe that they're gonna hold fast.
Well they've never had one losing quarter through the whole financial crisis including right now.
So -- I don't think that's going to change the fact that a couple of municipalities.
And California Stockton San Bernardino.
Ready -- foolish problems with their excessive pension funds combined with the constraints.
Of proposition thirteen.
Does what has produced the problems.
And there was one an Alabama there was one in Pennsylvania you don't see those as the tip of an iceberg or the beginning of a domino effect known.
The -- municipal bond market is a three trillion dollar a year market.
It's a few hundred million dollars among all those municipalities that.
We came up with the idea -- the Wilbur Ross -- and trade.
Aside from the natural gas vessels what's the next opportunity that you see out there -- that looks truly distressed.
Well we've been looking at things elsewhere in Europe as -- over and bank of Ireland and we're in virgin money.
I was in Greece very recently in.
It's a little too early I think to do anything there I think Greece is in pretty bad shape.
Don't think so employment could be agrees serves the would be pleased you're going to.
Finally let me bring it back home to our country we mentioned municipal bonds it is not an area that you think is gonna collapse as some people said.
Partly because localities.
Local communities have been into and a hello a lot better job at getting their accounts in order than the federal government.
Do you think that is going to be a trend that we will continue to see that the local governments -- state governments will get their affairs in order no matter what happens to the fence.
Well I haven't seen California's its affairs nobody Indiana you look at what's happening with Wisconsin and the re voting in the governor that's for austerity there what's happening in New Jersey -- what they're more examples of of things getting it right and local community -- there are wrong.
Somebody live and Palm Beach and in Palm Beach we've just changed the whole pension system -- -- There were a lot of abuses people were retiring in the early forty's.
Getting more.
Retirement pay than they ever -- base -- Because they were rolling in the last three years over time along with today's I think so guess who -- all of the overtime it was a -- three years from.
-- -- and that's not unusual.
So pension -- -- pension and retiree health of the two big monsters that localities and states have to deal.
Wilbur Ross of WL Ross great to see you thank you so much good.
