Emerald

Cramer's Stop Trading! General Electric Brings Bad Credit to Light (12/18/08)

In determining GE"s risk profile, you should know that they are basically a bank. GE depends on GE Capital for 50% of their earnings and these earnings are under severe pressure. Even the "great" Jack Welch had most of GE's debt in short term commercial paper, thereby taking extreme interest rate risk. He got lucky and after he left, Bill Gross of PIMCO called GE on this problem. A stable, blue chip AAA company? I think not. Eanings from non financial activites will also be under pressure due to a slowing worldwide economy. I own GE, but lightened up recently because of the lack of honesty and transparency. Remember, they are a bank and the banks have the same problems.