Moody’s informed us today it has placed General Electric Company’s and General Electric Capital Corporation’s (GECC) long-term Aaa ratings on review for possible downgrade. This review does not affect GE’s and GECC’s short-term funding ratings of Prime-1 (P-1), which were affirmed by Moody’s. This action is a follow-up to Moody’s December review of GE’s 2009 operating plan. GE has outlined a plan for the year that is based on the difficult global economic environment we see. During the next few months, we will work constructively with Moody’s on its review. Our objective is to maintain our Triple-A rating, but we do not anticipate any major operational impacts should that change. We expect to deliver on the 2009 financial framework that we outlined last week.
GE has taken steps to strengthen its liquidity position, including reducing GE Capital Services’ commercial paper from $88 billion in 3Q ’08 to $65 billion today. We have raised 64% of our long-term funding for 2009. The company has more than $50 billion in cash on hand. During 2008, GE increased its alternative funding by $25 billion and will continue to grow this funding in 2009 and beyond.
* Read the announcement from Moody’s
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Seriously, to hell with Moody’s and all other rating agencies. If these "experts" were so intelligent, and their crystal balls were as glowing as they’d like you to believe, why didn’t they help all investors avoid the collapse we’re in now and/or previous bubbles and recessins. The answer is, everything they speak of is pure speculation which honestly makes anything they say (to include their precious "ratings") mean absolutely squat.
GE, be who you are and to hell with these guys and the rest of them. When you battle through this moment in time, which I have confidence you will (backed up with my money), they will jump on the bandwagon. However, none of them have the guts to stick with anyone or anything when tough times are here. I have to ask GE this, why care what these guys think when, at a moments notice, they hold their precious ratings and downgrade at your throat when times are down to manipulate you into doing things?
Last time I checked, none of these precious analysts can produce electricity and potable water, build/distribute windmills and gas turbines, plane engines, locomotives, power grids, etc. I bet very few of them have ever managed a loan portfolio of any sort. Finally, none of them have ever built an appliance or done anything worthwhile in medical advancements.
Yet, they somehow have this mystical power (and pure arrogance)to control what a great company like GE is doing just to appease a bunch of short-term ticker driven lemmings. You know what I think, I think GE should stand up and tell them all to go to hell. Seriously, if you’re going to rely less on commercial paper and lower your debt levels, then who really cares what that AAA or ABC or ZZZ or blah blah blah means. Tell me what loan agency wouldn’t loan to GE compared to startups or other agencies that don’t have the history of "getting the job done" like GE has.
GE, as a shareholder, I have to ask that you simply stand up straight, put your shoulders back, lift your head up, and draw a line in the sand. Whether you believe it or not, you’re powerful enough to lead a coalition of large firms in an effort to stand up to these rating agencies and put them in their place. They are market manipulators, it’s all they have ever been, and that’s all they’ll ever be.
For crying out loud, stop letting these guys lead you buy the tail. Stand up for yourselves and be GE!
To back up my statement, I’m buying more GE tomorrow (I’ll even provide proof of my purchase order via email if you’d like). That’s my way of telling Moody’s and all the naysayers to go to hell. I hope you send the same message GE…..
Oh no, not these guys again! Weren’t Moody, S&P and Fitch the people who gave (or sold) the worthless Mortgage Backed Securities AAA ratings? They created this financial fiasco our Country is in. These Bums belong in jail! They have no credibility to rate anything except toilets.
AlG
The regulators need to start "rating’ the ‘Raters" ! These fellas waste so much of management time of companies, that the process of rating agencies themselves leads to producivity lags ! Specially in these days when organisations are under pressure to execute on various safety strategies, these idiots just keep distracting.
To hell with the AAA, GE can live without it !
Desi,
What do you say we start a campaign:
"To hell with AAA and the raters that govern them!"
Let’s do it. Let’s ask CNBC to invite them for a discussion and let’s have Kudlow ask them questions.
Al
I was thinking more along the lines of Jeff Macke. He has the spunk we need!
I got my GE dividend check a few days ago it looks like a Paycheck you would get if you worked for GE.
Pretty cool, all the GE employees do the hard work and I get paid a check for doing nothing
The financial system failure caused by the malfunction of the the rating agencies, supervisory and analysts have to be the most imminent lessons learnt. A global financial system restructure should consider not only the Bad Bank deployment but also do something with the Bad Rating System…
I would like to know the downside to a credit downgrade with regard to GE, given the choice, keep the dividend, I may be mistaken but nevertheless I WOULD LIKE CLARIFICATION.
I find it deplorable that the credit agencies, the very same agencies deriving payment from subscribers for what? Remains puzzling, are the same people responsible for more oversight and malfeasance giving credence to today’s issues. These folks want to be PARTNERS in GE , so move over Emmelt. LOL
1. The MIS review GE in Dec. 2008 provide with "six recommendations for consideration"…otherwise face downgrade… (Can they run a successfully GE Business? )
2. While the MIS disclaimer citing that …"credit ratings are not statements of current or historical fact. Credit ratings do not constitute investment or financial advice…not recommendation to purchase, sell or hold…not suitability of …investor will make their own study and evaluate…" " … make no warrant, express or implied as to the accuracy, timeliness, completeness, merchantability of fitness…no liability to any person or entity…no…any liability for loss..any errors..( negligent or otherwise)…
3 The bottomline is …Sorry, we collect service fees…for nothing but a joke review
4. We have neither accountability nor credibility, no liability, but we take good bonus…
5. System disruption ..need serious overhaul
CNBC or whoever, should get all the raters around a table, with their ratings (and resultant debt or company performance as a backdrop) since 2004+, and what they thought before stamping ratings on all the toxic waste. They have been criminal really…and now that they are under pressure, getting after companies such as GE to costematically cover up their crimes of the past.
Again, to hell with the AAA..GE should just cost out the resultant impact (cost of funds perhaps). What diff has the AAA made to GE’s stock in the last 12 months. Lets start afresh…bite the bullet and get on with life in the new world.
To all:
I just bought more to backup my stance. 80 shares sub-$13 within my Roth IRA. I suppose it could go as low as the speculation of $9-$10; but, I think this is a good price now. Even if they cut the dividend in half you’re getting 4.775%. Plus, if you take the recent quarter results (the worst in about 88 years — and yes, some of it was a tax benefit but that’s still cash in the bank), you’re getting 11% initial rate of return. Throw on top of that what GE has done to preserve itself, and the government policies being put in place right now, you’re kidding yourself if you’ll see general buying opportunities like this for a while. Again, my crystal ball does not work and I don’t know where the short-term ticker will send it. However, at this price I’m willing to wait it out.
All the best and keep driving forward GE.
Chris
Inaddition, the CNBC could consider inviting NY Cumo office to participate the proposed round table talk. It should focus on the ethical and integrity point of intent to bring down the market cap from 500B to 120B. It is grater Scheme in value than the Ponzi scheme 50B.
GE should start talking about how AA is the place to be etc.. Get people used to AA instead of AAA.
AA is the new investment grade. Long live AA
Eventually people will forget this whole AAA deal.
$11 a share, thanks for coming, time to buy in, GE was over $100 a share in the late 90s, the only concern I have is that no one’s got any money to buy any GE or any other stock for that matter, hence the capital raisings, in Oz the companies are going ballistic, there’s a capital raising every few days, I’ll start getting scared when the cashed up Oily’s start raising capital.
Well, 6:1 is one way to tell them to go to hell:)
Now THAT, is bold action. I must applaud you on that GE, great job.
Now, could we please get a definitive answer once and for all on the dividend? If you have to cut it, I can live with that (especially if you allocate funds like you announced today); just give us straight and concise answers, that’s all we’re asking for.