Saturday, March 21, 2009

Is GE a Zero?

From the WSJ:

To meet investor demand for more details about GE Capital, managers held an investor day Thursday, during which they gave out much new, and welcome, information about the unit's $637 billion of assets. One detail: Large amounts of GE Capital's loans are to borrowers with junk, or sub-investment-grade, ratings.

For instance, 81% of the $55 billion of equipment leases in the Americas is to borrowers below investment grade, and 40% are rated B+ or lower. On the $38 billion leveraged loan book, 76% of the borrowers are rated below B+, and 28% are below B-.

For instance, management is expecting $333 million of credit losses on its leveraged loans in 2009 -- less than 1% of the total amount. The unit aims to have reserves at 1.2% of the book this year.

GE Capital's consumer portfolio also contains a lot of loans to lower-grade borrowers. The company said 58% of its $183 billion in consumer loans were to prime borrowers, implying a sizable 42% were to non-prime borrowers.


Anonymous said...


Anonymous said...

What do you think about Geithner Plan? Is this going to fly?

Anonymous said...


Did you read about the Phoenix web entrepreneur who claims to have trademarked the phrase "Great Recession"?

Apparently he's suing the IMF $10M for infringing on his mark.

Anonymous said...

How dare the IMF attempt to steal market share from him! Trademark infringement is illegal (and the IMF should know better), especially when the products and services that the IMF offers are very similar and identical to his blog.

The Great Recession (TM)


Anonymous said...

What's going on with this rally. My short positions are getting killed. This market is so rigged. February consecutive down days and on March consecutive up days. Is this the beginning of a bull market?