Word: banke
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...abridged description of the case against GE is simple. The assets of its financial unit, GECS, will suffer from high default rates as the recession undermines the ability of its business and consumer customers to pay their bills. A Deutsche Bank analyst recently wrote that GE Capital has zero value in contributing to the value of the company's stock. His argument is that the unrealized losses on the financial unit's balance sheet are greater than most investors understand. On top of the analyst's report, The Wall Street Journal reported that GE has significant exposure to the failing...
...valuable to look at the shares of GE through the eyes of common sense. The company has lost $300 billion of market capitalization in about a year. During the same period, Citigroup has lost $130 billion in market cap. Bank of America has lost $200 billion. Since GE's financial services business is not the majority of its revenue, the destruction of it market value seems extreme. Balance sheet jockeys would say that the trouble the market fears is hidden within GE's asset base and will jump out to eviscerate earnings soon. So far there is no sign that...
...monstrosity that the stock market has made it out to be. It may cut its dividend or lose its precious credit rating. Its financial service businesses may post large loses. But, it should not trade like a money center bank that the federal government is about to nationalize...
...Just like Detroit, Bank of America (BAC), and Citigroup (C), AIG is playing a game of chicken with Washington that the government does not feel it can afford to lose. Imagine what it would be like if all of these businesses failed at the same time. (Read a TIME story on why the government wouldn't let AIG fail...
...Bank nationalization is the phrase on everyone's lips at the moment - with Alan Greenspan, Chris Dodd and Paul Krugman among the leading lights of the unlikely coalition in favor of it, and members of the Obama Administration repeatedly denying that it's in their plans. It's a misleading debate, though, given that the U.S. banking system was effectively nationalized on Oct. 13, when then Treasury Secretary Henry Paulson called the heads of the country's nine biggest banks into his office and told them they couldn't leave the room before agreeing to sell shares to the government...