SA author Josh Arnold takes a look at GE's (GE) balance sheet and concludes that it's more of a...

SA author Josh Arnold takes a look at GE's (GE) balance sheet and concludes that it's more of a hedge fund or bank than an industrial powerhouse. GE Capital (GECC) accounts for 84% of GE's liabilities and controls 90.9% of the cash. If Arnold were a shareholder, he'd be terrified: "GECC was responsible for enormous wealth destruction during the most recent financial crisis and will be again at some point in the future."
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Comments (7)
  • rjj1960
    , contributor
    Comments (1481) | Send Message
    Where has Josh Arnold been for 5 years?? Of course GE is a bank and the blame falls solely on Jack Welch. Wall Street got into his ear years ago to say..Jack, not only do you sell the jet engines, but also finance them and collect the Vig..
    31 Dec 2012, 10:23 AM Reply Like
  • maudie
    , contributor
    Comments (489) | Send Message
    Wow! 12 years after Welch is long gone and he's still to blame. Obama should get another decade out of Bush.
    31 Dec 2012, 10:41 AM Reply Like
  • steve2334
    , contributor
    Comments (191) | Send Message
    I wonder if Buffett knows?
    31 Dec 2012, 10:45 AM Reply Like
    , contributor
    Comments (156) | Send Message
    I have no problem with GE financing the jet engines or appliances through GE capital, but beyond that, in my opinion, GE Cap. has no business in general finance. GE is a multi-national industrial giant a la Siemens of Germany, some even put it in the league of other defense Industrial giants like Boeing, Lockheed, Northrop Grumman, Raytheon etc. When an industrial giant gets involved in other areas, it loses its hold on its expertise. Things outside of one's expertise, may for a time, pep up a company's balance sheet, specially when the area in question is having a good time, but when economy falters, as happened during the last recession, no fault of GE mind you, It brings down the whole house. Yes I blame JW, 'manager of the century" even after 12 years, he is gone. GE, in my opinion, is not a hedge fund, the CEO JI has a tough job, and he is performing it superbly. It is my understanding that he had confidence enough, soon after becoming CEO in GE's future prosperity that he invested $ millions of his own money.
    Last check showed he still does. If Warren Buffet loaned huge amount of money to GE under his leadership during those tumultuous times then having a confidence in GE at this time, with rising earnings and dividends, is easy for me. I am a long term investor and currently hold a position in GE.
    31 Dec 2012, 11:57 AM Reply Like
  • edranetz
    , contributor
    Comment (1) | Send Message
    GE provides business loans and even tried to help Borders Bookstores from shutting down. They had nothing to do with the mortgage scandal. They don't provide individuals with mortgages.
    31 Dec 2012, 12:16 PM Reply Like
  • Remyngton
    , contributor
    Comments (343) | Send Message
    Bush's fault !!!


    ha ha ha


    that's worked wonders over the last 4 years


    " The Big Lie " ... Goebbels ... Obama
    31 Dec 2012, 12:54 PM Reply Like
  • dmaislen
    , contributor
    Comments (21) | Send Message
    What a comment...GE is nothing but a hedge fund and a bank. It's comments like this off the top of your head or out of some other nameless place that create problems for responsible, well run companies like GE. If other companies were run with half the integrity found within General Electric's management the world would be a much better place. Throwing word "brickbats" at Jack Welch is beyond stupid. He is one of the best managers that walked the planet in the last 250 years!!! I'm not a huge Immelt fan, but I'm not a huge Obama fan either.


    GE has responsibly built a very respectful business. Who said they couldn't be in the commercial finance business? Where's that rule of law? They're in a lot of businesses. They shed the ones that don't work out or fit, but overall they've done a pretty darn good job. During the last twenty years before the financial meltdown GE's profit from their Capital arm was pretty amazing. Mike Neal ran Capital with skill and generated billions in earnings. Let's give credit where it's due. GE is NOT a hedge fund.
    31 Dec 2012, 02:11 PM Reply Like
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