Thursday, March 5, 2009

The Good, The Bad and The Ugly

First some reasonably good headline news:
Some Bad News:
And the ugly:
  • GE's stock continues its steep decline as the confidence crisis continues.  The credit default swaps on the company's finance arm are trading at highly distressed levels.  Regular readers know that I have been warning about GE's balance sheet since I launched this blog a year ago, in pieces such as "What's Behind the Curtain at GE?" and most recently "Why is GE Still Paying a Dividend?" (not anymore.)  The company relied too much on short-term debt to finance a huge investment portfolio of god knows what (also labeled as "other" on its balance sheet.)  I suppose this kind of accounting used to fly a year ago, but no more.  Investors have woken up, demanded clarity, and want answers.  GE's protestations about everything being peachy are not being met with enthusiasm any longer. 

1 comment:

Reggie said...

Plenty of ugly. In fact, GE was about as pretty as a pig can be today.