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GE Capital Serving Kool Aid All Morning
GE Capital, aka the next CIT, is practicing its recently acquired hypnosis skillset (perfected via daily lessons from CNBC anchors) which has culminated with a 63 page presentation replete with far too much empty verbiage and green shootery.
The take home message:
- H1 Net Income has plunged to $1.7 billion on $557 billion in total assets, and only thanks to firing pretty much everybody: $1.9 billion in SG&A savings
- This is down $24 billion from Q4 as GECC is "continuing to rapidly reduce balance sheet"
- Loss reserves are skyrocketing: currently at $6.6 billion, up one billion from Q1 (and much lower than reality)
- 2009 TY original outlook: $5 billion; Fed base case: $2.0-$2.5 billion, Fed adverse case: $0
- How many more people can GECC fire as its balance sheet implodes?
- Oh yeah, and if CRE really blows up, CIT, here we come
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this doesn't surprise me at all, matter a fact, in February i really thought that GE would file for C11 by June .... now i really, really think that will happen between September and December ..
These guys are idiots. They are already the biggest user of the TGLP at near $85 billion the taxpayer is on the hook for. They have no idea of the risk (as we've clearly seen) and this leveraged to the hilt behemoth is bk without more taxpayer monies. We should have let them go and let the existing creditors fight it out. It’s just more scamming on the part of these mismanaged firms with government giving the ok wink.
GE has few worries, as it has attained Too Big to Fail status
Add in the most favored propagandist NBC networks, and this firm is golden
I was typing this word-for-word at the same time. GECC is attached to GE, and as such will have an unlimited line of credit from the Fed/Treasury/Taxpayers.
CIT was allowed to fail for a reason (as already articulated here previously). They are to GE(CC) as Lehman+Bear were to Goldman/Morgan. You thumb your nose at the cartel, you'll pay for it eventually. Well, we'll pay for it one way or another. But the picture is crystal clear.
"Too Big to Fail" is more like "Too Big of a Campaign Contributor to Fail". I suspect the only company that would get more favorable treatment than GE is GS.
BREAKING NEWS
Bawney Fwanks just said NO to FEDs role as system regulator .... small victory for all the people on Earth, one GIANT BLOW to the giant bloodsucking vampire squid ...
i thought the recession was over? not according to the first line. how the fuk they gonna provide attractive long term returns without it?
munt
Boycott GE, those fascist a-holz don't need your money, they can steal whatever they want from the taxpayer.
"We don't have rose colored glasses on about the environment"
They know it sucks. This isn't quite CNBC. Also, TY guidance was 0-5 not 5. Overall results are better than those projected for the base case while the actual economy is closer to the adverse case.
Last slide here... if adverse case holds up GECC will need another $7B early 2011.
Edit: Ah, I see where you got the TY numbers now. It's slightly misleading. The 0 and 2.5 numbers were always part of the guidance depending on what happened in the economy.
GE, the darling of the Harvard Business School. This is what modern business is about: decorating the balance sheet to improve the property value, while the house is emptied of furniture and people.
It pretends to be an industrial company, yet most of it is FIRE. It is not even a US company. Read the annual report sometime. I cannot even figure out what it is, other than a bunch of intertwining trusts and finance operations.
"Imagination at work" -- at least they are honest about it?
good one!
My biggest worry with GECC is not the numbers they show you. These folks were the best of the lot at getting old stuff, 'off the balance sheet'.
While these things are off BS, GE has a big economic interest in the outcome. In order to protect that interest they are going to have to resume control of a lot of the old OB stuff.
This happened with the banks in the summer/fall 08. When the siv's fail, the assets went back.
My guess is you could add another $250 bil onto this balance sheet. It looks real stinky with that in mind.
hey bruce, care to share where you pull these numbers from?
i think i know where. i understand this illustrious audience (kooks is too strong a term) is financially illiterate, but still.
Appreciating your self actualization via the company you choose to keep...
you CNBC staff lurkers emit a strong odor...is that...desperation? failure? humiliation?
"Oh yeah, and if CRE really blows up, CIT, here we come"
If CRE blows up? I'm going to sit back and enjoy the show.
Not "if" but "when".
I'll continue to ask opinions, as to what kind of helium is holding IYR up, and what kind of Lead is holding SRS down? Beuller? Anyone? Anyone?
See TD's posts on rolling buy ins, Reit upgrades and secondaries, Steers & Cohen and the general divergence from reality towards insanity.
In other words: hot air.
Headlines
From the CNBS site:
GE: No New Capital-Raise Needed for Financing Arm
From Dow Jones:
GE: May Need To Infuse $2B-$7B Into GE Capital In 2011
10:16 AM ET | Dow Jones
Comical
Looks like the market is drinking the Kool Aid. GE up 2%.
feeding kool aid to a computer would be disasterous
Case/Shiller up WOW,WOW,WOW
Liz Anne Sonders-"less bad and getting better"
Bob Pisshoney-"Consumer Confidence doesn't really matter"
Back up the truck and buy these stocks,NOWWWWWWWWW !!!
;-)
Yeah, up with no seasonal adjustment. It's interesting that they use the seasonally adjusted numbers in the winter (when they're better), and the NSA numbers in the summer (when they are better). The seasonally adjusted CS Index was down 2.5% annualized for the month...
Housing will stay flat for years, at best !!!
the slide template had GE logo and phrase "imagination at work" for this optimistic presentation
Apropos of EVERYTHING!
This is easily one of the most vile companies of all time.
They invented the term 'designed obsolescence' to screw the consumer, which had massive long term impact on the American standard of living. Companies like GM jumped into line for that scam.
Jack Welch invented/perfected the disposable worker, and age discrimination, and the end of pensions through firing everyone.
Years and years of fake, manufactured earnings reports that hit forecasts to the penny. Otherwise known manipulation.
And now GE sucks off the government tit, make no mistake this company is entirely wiped out and bankrupt but instead bailed out. They are nothing but a massive toxic asset collector but those facts have now been hidden with the suspension of mark to market.
So they can survive to create the largest scam of all time, the GREEN SCAM. The single dumbest redistribution of money in history through green la-lal-la and green shoots.
At least they still got CNBC to make their case.
With the suspension of mark to market accounting there really is no point issuing quarerly statements or annual for that matter.
These firms might as well just put down that they have a trillion dollars worth of assets on their balance sheets.
Ridiculous
Only GE could bring you programming like this!
CNBC Advice Equals Holy Grail!
Multimedia | July 27th, 2009
An excerpt from Broke:
http://www.michaelcovel.com/2009/07/27/cnbc-advice-equals-holy-grail/