Interesting GE Article........

[FinanceDude]

I don't put much stock in financial bloggers or newsletter dudes, but this one was sent to me, so I thought I should share:

General Electric: Genuine Risk of Collapse? - Seeking Alpha

Pretty doom and gloom...........

 

[bbbamI]

....back to the happy music thread....

 

[al_bundy]

i looked at GE as a dividend play for family and didn't like the financials. The Fed was the only thing keeping them alive. Too little cash and too much debt. good thing is their short term debt has been dropping all year as they deleverage so another year with Fed help and they will probably be OK.

And Jeff Imelt is pretty good and it's not entirely his fault the company is in the condition that it's in. It was Jack Welch that built GE Finance from a few cubicles to the monstrosity it is today. and it was Jack Welch that bought NBC.

I read Welch's first book and i'd say the company is where it was in the 1970's and looking for direction. Either Imelt or the next CEO will reorganize it again and some other division will be the leader

 

[clifp]

It is an interesting article. One of the things that is worth noting is even if GE capital is levered at 8 to 1 ratio that far less than a typical bank at 12 to 14-1.

It is also backed by the assets of rest of the GE conglomerate which are considerable. Still I think it is fair to wonder if it really deserves a AAA credit rating.

On the other it is yielding almost 10% and has PE of around 6 to 7.

 

[al_bundy]

the whole thing depends on how far the recession will go and how much developing nations will be hurt

 

[Nords]

It is an interesting article. One of the things that is worth noting is even if GE capital is levered at 8 to 1 ratio that far less than a typical bank at 12 to 14-1.
It is also backed by the assets of rest of the GE conglomerate which are considerable. Still I think it is fair to wonder if it really deserves a AAA credit rating.
On the other it is yielding almost 10% and has PE of around 6 to 7.

That's a well-written analysis, and a pleasure to read after some of the dreck that's been floating around on Seeking Alpha.

I especially like this part:

A GE collapse would not bring good things to life. It would bring about the mother of all bailouts.

However this part:

Disclosure: None

should probably be edited to read:
"I've shorted this stock with everything I can get on margin and doubled down with options!"