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September 25, 2008

"Consumers perpetrated the credit crisis"

Distressed asset investor Wilbur Ross (better known in India for his SpiceJet investment) has an interesting take on what caused the credit crisis in the US: the eagerness of the American consumer to live beyond his means.

Ross is also critical of the US government's "ad hoc" measures on who it would bail out and who it wouldn't. "If you are stupid but really big, the government will bail you out. But, if you are stupid but medium sized, you die,” said Wilbur Ross at the Reuters Restructuring Summit. This "slippery slope" we are getting into is "going to encourage some very bad behavior by some big institutions".

You can listen to Ross' view on this and impact of the crisis, at a Reuters conference here and here.


Arun Natarajan is the Founder & CEO of Venture Intelligence, the leading provider of information and networking services to the private equity and venture capital ecosystem in India. View free samples of Venture Intelligence newsletters and reports.