levin70

GE: Jeff Immelt, Please Stop Talking

From the 10K

Current portion of long-term debt and short term debt total $193 billion.

The reason the market is punishing GE is that pretty much everyone out there is worried that GE will be unable to roll the debt.

The board should fire immelt and find someone who can clearly articulate how that debt rollover is going to be managed. I would expect that to lead to a higher stock price.

Regards

How GE Compares to Other Banks

Understand that the article is looking at Assets (including goodwill, which it should remove, but doesnt) divided by tangible equity available to common holders. This article is not looking at assets divided by tangible net worth - two very different animals.

Always understand what the numbers are, before you talk about what they pupport to mean.

Especially when talking about solvency. If you really think that preferred holders (perpetual prefferred to boot) are akin to debt holders, i have a bridge to sell you, real cheap even.

This article was well below your standards felix. Normally what you post has weight to it. This unfortunately does not.

Valuing GE (It's Cheap)

Actually, the best measure of leverage is Debt/Tangible Book. If you look at it this way, GE is currently approaching bear stearns territory at approx 36:1. If you break out GECS and look at GECS its a whopping 70:1. GECS as of Dec 31, 2007 had only 8.4 billion in tangible book value. Only a 2% decrease in its investment/fin rec portfolio would wipe out its tangible bv.

Not that I am saying that GE will meet BSC's fate - its asset quality underlying its loans is far better than BSC's, but it is still highly levered on the GECS side.