Exclusive: Just What Does GECC Know That Nobody Else Does?
Some very interesting leaks during today's GECC investor update. While the bulk of what was presented is fluff, mostly about the company assuming profitability under the most dire scenarios (those Calcutta-outsourced financial models tend to have an ever so slightly bullish angle to them, just ask Erin Callan), GECC, during its live webcast, noted that it would consider 2010 funding needs through more TLGP debt.
First off, depositors everywhere rejoice at the notion that the DIF will be further diluted by further potential losses on GECC issues... However, much more interestingly, just where does GECC get its information that the TLGP will extend past October 31, 2009? On a March 17th Board Meeting, the FDIC accepted an amendment to the TLGP program, which in addition to increased fees (an issue ZH already discussed extensively), had the following disclosure on maturity:
The Interim Rule permits all IDIs participating in the DGP to issue DIC-guaranteed senior unsecured debt until October 31, 2009.
So when GECC claims it will address 2010 liquidity needs via the TLGP, two things come to mind:
1) A statement about its future financial condition not based on facts, which could be interpreted as a material misrepresentation by several shareholders who after buying GE stock today at $10 and seeing it drop to $5 (for example) in 3 months go nuclear and sue GE and GECC.
2) That the FDIC is in (in)direct illegal communication with General Electric, and has advised it it will already extend the TLGP's final maturity post the just adopted October 31 date, without proper notification of the U.S. taxpayer, to whom it is the ultimate "fiduciary."
Zero Hedge is not sure which outcome is worse, as there is either criminality involved or implicit conspiracy.
As for those who feel like buying GE stock and having the backstop of suing the company if it drops (see 1 above), I present GECC investor presentation currently mulled over by what few investors GE has left. Hat tip reader AT for bringing to my attention.
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