Investing In The Bubble

GE will have to take a $9.5B hit to stockholder's equity in Q4 due to the GAAP/SAP mismatch unless Siedman can kick the can down the road yet another year. The new GAAP rule was originally scheduled to be implemented 12/15/20, it was then kicked out to 12/15/21 and as of now it's 12/15/22.

@Steve Cole When Markopolos sounded the alarm, GE was going to have to face the music with a hit to stock holder’s equity of about $9.5B due to their mismatch of Statutory Reserves and GAAP reserves for ERAC. The effective date of the new FASB rule was supposed to have been 12-15-20, it was later kicked out to 12-15-21 and currently the effective date is 12-15-22. The chair of GE’s accounting board, Leslie Siedman, is the former chair of FASB. Check out my blog for the truth about this fraudulent excuse for a company.

Looks like they kicked this out yet another year. Effective date: 12/15/2022.

viewpoint.pwc.com/...

Bondsmoker, my first post here in over two months since the Commie Tyrants at Seeking Alpha started deleting my comments because it doesn’t fit their BS narrative.

Do you still think the trading volumes are legit? Do you REALLY think the high school kids on Robinhood are responsible for market caps going up TENS ON OF BILLIONS? I hope you have woken up a little since losing have your net worth on “hard to borrow fees”. The ENTIRE STOCK MARKET has been fake our entire lives. Always has been. Hope you are able to wake up to reality.

Shorting this market has been the most obvious, easiest money of all time and that is PRECISELY why we saw a V-Shaped recovery in the stock market and Nasdaq at an all time high. They couldn’t let Main Street win. Whiting finished Q3 with ZERO cash on the balance sheet, it was the easiest short of all time. Too obvious, and that’s why they spiked the fake ass price to over $3. Plain and simple. Hope you can wake up and figure this out. It was purely a short squeeze in the fake as fuck stock market. Obvious. Hope they didn’t kill you too bad and even more... hope you wake up to obvious reality bro.

@3Parabellum

The public will never be immune from stupidity, trusting the press and trusting the government. The Corona-hoax lives on...and on... and on...

The herd is way too stupid to figure it out.

The bankruptcies are just getting started. GE Engines are a great business but the balance sheet is... well... I'm still looking for the General Electric Company balance sheet.

@stevebatty

If the Fed is buying up the debt of Boeing, then when Boeing goes bankrupt, and they Chapter 11, the Fed then owns a more solvent Boeing. Are we all enslaved to the banks? Is that what this means?

I’m still clueless. Here’s a link to a YouTube video I posted this morning for a YouTuber I follow called “The Uneducated Economist”. I read your answer, but it still isn’t making sense to me.

www.youtube.com/...

@hangloose Hawaii

I don’t know Hang. Nasdaq is up 3% YTD. The market has completely disconnected from reality. Even after filing bankruptcy, Whiting is still above $1. I’ve always said the only thing real about the stock market is dividends and bankruptcies but now I’m not even sure about that.

Did the Fed chairman actually say something on 60 Minutes that the market didn’t already know? I haven’t seen it yet.

Nasdaq investors are up 3% year to date.

If you knew this was coming.... baseball cancelled, soccer cancelled, NBA cancelled, March Madness cancelled... Disney closed... Six Flags closed... Vegas closed... air travel down 95% y/y... every mall closed... JCPenney bankrupt... Hertz on the brink of Bankruptcy... countless airlines world wide in bankruptcy or receivership... a glut of used cars that may take years to get thru... nearly every retail shopping center nationwide bankrupt... hotels bankrupt nationwide... restaurants bankrupt... WTI going negative... new weekly unemployment claims above 2 million for 8 weeks in a row... God only knows what percentage of home mortgages not being paid... 80% of airlines requesting forebearance from GECAS... layoffs and CapEx cuts reported every day on CNBC... MAX still not certified to fly...

Yeah... this is an investor’s god damn wet dream.

If you had seen all that coming in advance... and knew with 100% certainty it was going to happen... would you have said to yourself... “This is the perfect time to buy and hold QQQ”??? Really?!?!???

And I’m the crazy one?

@Brad N

And half of Georgia didn't die after opening up 2.5 weeks ago. What?!?!?!? I thought Georgia should all be dead and dying by now. Maybe they need to fake another version of the Potters Park back hoe mass grave... only this time in Georgia.

@G. Blair Bauer

This link should take you to it.

seekingalpha.com/...

@James Coleman

Thanks for reading and commenting James. I’ll definitely let you guys know if hear anything from the Kansas Insurance Department with regards to my letter.

@Dmitry Kovalchuk

Business travel will be dead for at least another year. I'd guess about 50% of the planes flying in over my house for landing at DFW are small propeller planes. Do you know if GE Aviation does work on propeller planes?

@arok79

BRK.A closed at 70,000 on 01/01/99. It is now 255,000. He's grown his investor's money at 6.3% over the 21.3 year period. It was the 90's when Buffet's name really became mainstream. So he must have made all his stellar returns before the spotlight was on him. Maybe 30% growth between 1957 and 1999? Then the spotlight is on him and suddenly he's average.

By comparison, gold was $287 per ounce on Jan 1st, 1999. It's $1,750 today. A growth rate of 9%. The DOW closed at 8630 on 12/31/98 and it is up 4.85% annually during the same time. So Buffett beat the DOW but was murdered by the gold bugs.

@Mike Slattery

The new $15B credit agreement refers to General Electric Company, as the borrower.

www.sec.gov/...

So.... where is the balance sheet for General Electric Company?

From page 33:

(a) Represents the adding together of all GE Industrial affiliates and GE Capital continuing operations on a one-line basis. See Note 1.

From page 3 of the most recent 10Q:

GE - the adding together of all affiliates EXCEPT GE Capital, whose continuing operations are presented on a one-line basis, giving effect to the elimination of transactions among such affiliates. As GE presents the continuing operations of GE Capital on a one-line basis, any intercompany profits resulting from transactions between GE and GE Capital are eliminated at the GE level. We present the results of GE in the center column of our consolidated Statements of Earnings (Loss), Financial Position and Cash Flows.

So you see Mike, the definition of GE on page 3 says there is a center column on the balance sheet that is the adding together of all of GE EXCEPT GE Capital. But the center column is labeled GE(a), and the (a) under the balance sheet says it includes GE Capital continuing operations.

If you have a headache already, it's by design.

No one understands GE's financials. Not me. Not you. Not the banks. Not the analysts. No one. Period. No one can understand non-sense, and that is all GE's financial reports are... fake, bogus nonsense. It is impossible to understand non-sense and that is what we've all been trying to do ever since I got here. There's a reason for that: It's impossible.

If the the company is running an accounting fraud, as Markopolos claimed, they had no choice but to keep KPMG. If Markopolos is right, when this comes out, it will bankrupt KPMG too.

Do I trust what GE is saying they have in cash? Nope. Not a single bit.

@Adms08a

That is another oddity. Adam Levine-Weinberg has indicated that insurance reserves are located under the line item Investment Securities. The line item on the GE Capital balance sheet was $38.117B at 03-31-20.

++++INSURANCE AND INVESTMENT CONTRACTS. At March 31, 2020, our insurance liabilities and annuity benefits of $38.2 billion are primarily supported by investment securities of $37.6 billion and commercial mortgage loans of $1.9 billion, net of their allowance for losses, respectively.++++ page 23, 10-Q

If insurance liabilities are $38.2B on page 23, why are they showing insurance liabilities of $38.729B on the page 33 balance sheet?

If their commercial mortgage loans of $1.9B are retail commercial, they are getting killed. I have a friend in the business, his company own's several LLC's for shopping centers. He thinks they will all bankrupt and quite possibly their brand new hotel too. He is recommending I short commercial office REIT's because share prices on these have barely budged but they will be next. So basically the entirety of the $1.9B of commercial mortgage loans is getting a hair cut unless ERAC can sell it before that happens.

They say they have $47B in cash, which would have been $27B without the Danaher cash, so why are they ending the quarter with $1.9B tapped on their credit cards? Mike Slattery attempted to defend this but his explanation is not really resonating with me.

There is also Note 20 on inter-company transactions and I haven't figured that one out yet. It's $7.9B. Maybe Adam can shed some light on that one and perhaps that is where the benign explanation for these oddities is found.

I’ll pass thanks. I do not consent.

@tcelling

I don’t see how they can reduce labor costs by much, if at all. I’m just thinking of my last trip to Six Flags, which was years ago... a ride has staff that do certain job functions, like one guy sitting behind a control switch and another person helping customers understand how to buckle in. Some rides had one person doing both functions. Now they’ll have to come in and swipe down all the contact surfaces with alcohol too.

I don’t see how this does anything but burn cash at 25% capacity.

And how will they enforce social distancing in the line areas? Seems to me, additional staff will need to be hired as mini-tyrants to demand that customers stand further apart while waiting in line. Either that, or social distancing is up to the patrons, in which case, the maskers are going to raise hell.

Can any of the GE bulls come up with a benign explanation for any of the questions I've raised in my latest blog article?

GE: Word Salad & More Numbers That Don't Up
seekingalpha.com/...

Can any of the GE Bulls come up with a benign explanation to any of the questions I've raised in my latest blog article?

GE: Word Salad & More Numbers That Don't Up
seekingalpha.com/...

Can any of the GE Bulls come up with a benign explanation for the questions I've brought up in my newest blog article?

GE: Word Salad & More Numbers That Don't Up
seekingalpha.com/...