CaptainJJack

A Windy Credit Market Overview

I used to own Boeing, but I sold it when Mulally left, and I still own GE, although I recently sold at $14.15, after getting in at over $20 last year.

I made a lot of money on Boeing, but I lost on GE (obviously).

I followed the WTC dispute, and I expected this result. You would have to be brain dead not to see what the Europeans were doing, and if it continues, it will eventually kill Boeing.

But, Boeing is not going to do much to pursue this further. Their whole business is selling to countries that have protectionist policies (including the US), and they are not going not start stirring up a trade war.

The whole bet on Boeing right now is the 787, and if it were not so far behind, I would be interested in the stock. The key is NOT whether they will get it done, but rather how much will it end up costing them.

I've heard numbers in the $20 billion area, and if that is even remotely accurate, Boeing's profit prospects are poor even if they sell a ton of these planes.

GE, as you point out, is a play on GECC, and with the stock at almost 1.5 times book, there is at much downside as upside even if GECC works out.

Don't get me wrong, GE, especially ex GECC and Universal, is a GREAT company, and a pretty good long, long term bet.

But, I cannot get enthusiastic about the stock at prices above $14, even though Goldman and Morgan Stanley both seem to feel there is strong short term upside.

While I cannot take issue with their seeing a short term rise to $18 (Goldman), I cannot see any reason why it isn't equally likely to fall to $10 if new problems emerge in GECC's commercial portfolio, as seems a better than even chance.