GE Capital: Next CIT?

Jul.29.09 | About: General Electric (GE)

GE Capital (NYSE:GE), 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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ge_webcast_presentation_07282009.pdf 659.6 KB
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