Keith Sherin says GE Capital concerns are ‘overdone’
GE’s Chief Financial Officer Keith Sherin, in an interview on CNBC this morning, addressed speculation about GE Capital, saying, “We have an incredibly strong liquidity position.”
* Read the transcript
* Read the CNBC story
Keith said GE’s financial services business expects to be profitable in the first quarter of 2009 and for the full year, and the company will provide a detailed review of the financial services business the week of March 16 in a dedicated GE Capital meeting. Read GE’s press release
As an interested GE shareholder, despite disappointments with the dividend cut, I thought Keith did a great job explaining the position of the company. I have a feeling that earnings this quarter will confirm the facts of GE and GE Capital. Btw, kudos to the CNBC hosts for the no nonsense, direct-to-the-point questions and to Keith for devoting enough time (around 20 min) to answer the questions properly. In my opinion, this format should be the template used when trying to assure investors in the future.
I hope this time GE will actually put it in action rather than just saying so. If this overdone reaction proof of be false, then there will be no reason to fix the trust anymore because it can not be fixed.
If you want us shareholders to trust GE again, make sure GE will live up with their words. If not, we can all expect to see zero in 2009.
What is your plan to fix the CDS rate? It is a bad cycle that can drive any company to the ground.
Good to see Keith setting the record straight. For all the fear in the market right now, and for those trying to discern the future of GE amidst the stream of comparisons to lesser companies, one word: Integrity.
It remains the core of GE.
I think the recent information GE has published is needed to counter mis-information disseminated by many analysts. However, I would like to suggest publishing a basic monthly report, much simpler( sales, income, cash flow, etc) but similar to the quarterly report on this site. I remember the basic premise of Six Sigma was to make decisions with data, not emotions or speculations. I think this would help demonstrate the value of GE
hit these CDS speculator !
Thank you for coming forward to bring clarity and understanding. The naked short sellers and rumour mongering is destroying GE’s stock price. I applaud your efforts to bring transparency to GE Capital’s situation. Please communicate more frequently.
I am a retired 38 year veteran of GE who continues to support GE thru stock purchases. Jeff Immelt and you are doing a good job, however, I expect you to reorg GE Capital soon to reflect the new reality.The Capital team
has delivered far too many negative suprises. If there is more bad news-get it all delivered and define the action plan-now. Your leadership is appreciated-It is vital to my family’s financial future.
Respectfully,
Tom Drzich
As a GE shareholder i do believe GE management is taking the right and needed steps to lead the company over the stormy waves.I have no doubt that short sellers are the cause of the substantial reduction of GE’s stock price. Please continue doing all is needed to consolidate GE’s place in the top.
Robert
WOW GE closed at 666 the mark of the beast.
Keith…good briefing and looking forward to the March 16th detailized info of GECC…forget not the April 11, 2008 events…
Was glad to hear the positive info from Keith Sherin and want to say how much I like the "gereports". I am a retired 73 year old and have half of my retirement in GE Stock and have for over 35 years. I count on the GE dividend for my living expenses and have to tell you that the cut in the dividend was one hell of a shock to me and I am still sleepless and worried. Please do your best to get it back.
Thanks,
Del
Well done Keith ! Now just open up GE Caps to the world…the last nut and bolt…and let the world see its core strength. Well done again
Keith, you did good in the mist of the most in opportune moment in memory. Unfortunately you came in last of a long line of characters , Bear Stearns, Lehman Bro’s, BAC and Citi. making your stories even harder to digest…………I’m on your side believing the negative hype is pure theater………….I took the liberty to e.mail one of the actors displaying a none stop diatribe against GE asking where his facts originated from and get an e.mail in return FROM A LAWYER that I’m harassing the analyst who hence forth I’ll refer to as fIBBER, McGEE AND MOLLY………..Seems these people live in a world of their own, in a world of illusion with no restraints to truth and fact……….. When asked, the analyst refused to address my concern about compliance, that the firm also makes a market in GE and was curious if the position was long or short …… This hand to mouth activity is questionable at best with concerns of running ahead of a story, may not be the case but the rational does exist and give cause for concern.
Sounds like a story I heard before. Time will tell. On CNBC the Option Trader said GE in big trouble. Someone has a very different view on the status of GE. As a shareholder I can only hope at these levels – minus + / – 85%.
To Keith & Jeff:
At the last annual meeting I ask both of you about the Debt / Equity Ratio. Your explanation at that time was "it was OK for a company the makeup of GE. What do you say now?
In addition – all of the debt we are have – is it producing income as I guess it was supposed to? (Use AAA to borrow low / relend at higher rates)
See you in Orlando.
The 16th. may be too late … whatever happened to Jack’s "Speed and Simplicity" theory???
Mr. Sherin,
How about backing this up with an insider stock purchase? Symbolic gestures matter a lot these days. More pay cuts for executive management would help in that regard, too. Management needs to signal they are "all in" in every way possible. As you say, you need to rebuild trust.
I appreciate the attempts to clarify, but I wonder how much of this is caused by GE’s failure to explain how the accounting departs from GE’s internal valuations. I do not think it is enough to say that GE is not a bank and, therefore, does not have to mark to market. Are there significant losses that require additional capital even on properties which GE believes, over time, will justify current GAAP values?
Barron has an interesting article related to GE CDS "Where Pricing Anomalies Abound" By MICHAEL SANTOLI…Credit-default-swap traders may need a shorter leash.
"…these actions feed signals into the market that companies are at risk of default — often true, sometimes not, never a certainty. The mix of ballooning CDS premiums and collapsing share prices is a factor that can force credit agencies to issue debt downgrades, make real creditors nervous and scare would-be "real money" buyers away from the shares and bonds of the affected companies.
The results are some alarming pricing relationships. A Merrill Lynch analyst Friday noted it was more costly to protect oneself from the possibility of a default by Berkshire Hathaway (ticker: BRKA) than one by Vietnam. And General Electric (GE) CDS prices outstripped those of Russia — a country that a dozen years ago actually did default on its foreign debt…."
Why thhe DC law makers make it legal…What GE invsetors can do?
Hi Mr Sherin, this is great we need more of this, I watch CNBC daily and have been waiting for news that says we are ok but dont hear it, unusual really since we own the network – we need news about how we have weathered every economic crises in history, the only company that ever has by the way, this crisis wont be any different and our company will face it head on – What I’d like to see is one of your statistical/historical economic experts give a story about how GE handled past crises, panic of 1907, 1929 GP, 1973 Oil crises, 1987 Equity meltdown, S&L crises 80-90s, looking at why GE is different now compared to during these crises.
In 1996, a team led by David Joyce, now CEO, president of GE aviation, and Russ Sparks, now Military Engine CEO, to address the issues that FAA-NE considered that GE 90 is not suitable for ETOPS services…FAA would not award ETOPS certificate for GE90 engine, it could be a blow to business…the situation is very closer to today’s GECC challenges…the team used the TOPS-8D process , dive deep to address each of the FAA issues…finally, GE90 is awarded with ETOPS 120/180/208 minutes certificates…for the benefit of wealth of knowledge in GE…It is advisable to leverage the GE aviation expertise’s of TOPS-8D…for this down deep root cause analysis…
Hi Keith Sherin, Can you tell me if GE does go under, chapter 10, is the US economy finished as we know it, ie, does Karl Marx start moon walking on his coffin?
Truth – That is what GE Investors want – Nothing but the truth so help you God……..
I am an employee of GE Money Servicing, Philippines. GE’s Manila-based call center servicing U.S.-based GE clients such as Lowe’s, Sam’s Club and Walmart, Banana Republic, Gap, Old Navy, Chevron, among others.
The only thing I could say to GE’s shareholders? KEEP THE FAITH!
I know everything looks bad right now – its actually much better in the U.S. than here in the Philippines – but I’m sure everything will be better soon.