Today, Moody’s Investors Service announced that it has downgraded GE and GE Capital’s long-term credit ratings from Aaa to Aa2, with a “stable” outlook. The ratings downgrade does not affect GE’s and GE Capital’s short-term funding ratings of Prime-1, which were affirmed by Moody’s. In its review, Moody’s highlighted that GE Capital has successfully strengthened its capital and liquidity to better protect its global businesses. Moody’s also pointed out that “GE’s industrial businesses will generate strong cash flows during the global economic downturn,” and it believes “that GE’s industrial operations continue to have strong Aaa characteristics, including a diversified portfolio of market-leading businesses that generate strong and durable profits and cash flow through cycles.”
* Read GE’s statement
* Read GE’s statement on Standard & Poor’s March 12 rating decision
* Read S&P’s full report
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I think this is good news. We all saw how slow the rating agencies were to downgrade EVERYTHING and by then it was too late to make a difference.
This appears to be the case here: reacting instead of forecasting after all the bad news is out and recovery is on the way. One hopes.
Again, GE takes a huge hit – loses 2 notches – and still spin the story to make it sound positive. Delusion guides GE management – they live in a parallel universe.
big rally on wall street overnight, financials led the way – GE Lets start using that cash to buy funds management businesses before this bull market really starts taking off – please oh please dont do what Westpac in Australia did in 1991 and pull out/cut down(they regret that, pulling out of Asia, with double digit growth for a decade after) – My mum calls me up the other night, she says I’ve lost most of my super, I retire in 5 years I’m transferring all to cash, I said mum you’ve already lost your money the downside risk is minimal now, you put it into cash and thats all you’ll have at retirement – Sounds familiar doesnt it, the corporations are doing it too, mein gott, what a weird lot!!!!!
Here’s some salary data on top execs, company’s you can trust I think as their CEOs only draw small salaries compared to their own equity in the business!!!
Washington Post Exec: $600k salary, owns $1b in shares
Apple Exec: $14m salary, owns $857m in shares
Mohawk Ind exec: $1.7m salary owns $859m in shares
Leucadia exec: $1.6m salary owns $1.2b in shares
Huntsman Exec: $4m salary owns $2.2b in shares
Google exec: $550k salary owns $4.4b in shares
Dell exec: $2m salaryowns $4.6b in shares
Dish network exec: $1.4m owns $4.6b in shares
News Corp exec: $24m salary owns $6.6b in shares
Amazon exec: $1.2m salary owns $7.4b in shares
Microsoft exec: $1.2m salary owns $11.8b in shares
Las Vegas Sands: $5.5m salary owns $19.4b in shares
Berkshire Exec: $100k salary owns $57b in shares
Yahoo exec: $0 salary owns $1.1b in shares
GE Exec: $3.3m salary owns $120m in shares ($60m now though)
Bottom line is high salaries are fine as long as it is in the equity of the company, not cash, with conditions, you cant sell in office and you cant sell for 2-3 years after leaving – I wrote to your president with this proposal and, my PM, I truelly believe that this will remove outrageous greed from the system.
Although with GE rating down 2-notch, today 25% 0f Future Puts closed at strikes April 7, etc…while 40% Calls OF April 10 etc closed…the future are trending GE upward…