【女征男】 西雅图地区# Piebridge - 鹊桥
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General Electric owes its creditors $600 billion. That huge amount of debt
is offset by $468 billion of investments and cash. However, much of those
investments are credit-card receivables and Eastern European mortgages. The
business, which no longer focuses on manufacturing, is dependent on credit
markets.
Again, GE would have collapsed if it didn't get a government bailout. (The U
.S. government guaranteed all of GE's debts through 2012 for free.) It can't
afford its debt at current, manipulated interest rates… much less at the
rates the company would pay without a government guarantee…
Right now, if GE put 100% of its cash from operations into debt repayment
every year and its earnings stayed at 2010 levels, it would take 16 years to
pay off its debts. It would take at least a decade to pay down its debts to
a more manageable level. No question, if GE were being managed prudently,
that's what it would do.
GE holds about $40 billion in tangible equity. I believe its European
mortgage losses are likely to be at least this large over the next five
years, which means, at some point soon, GE could be going to the market for
new equity. If that happens, the company's share price will probably fall in
half.
Why run the company this way? Because the managers know GE is too big to
fail. They're not running the company as though they actually own it. They'
re simply running it to maximize their own compensation. If it fails, it
fails. The stockholders will get wiped out and the government will bail out
the creditors. In the meantime, GE's managers are trying to get rich. They
want to keep the company as leveraged as possible. They don't want to repay
debts. They want to maximize the company's ability to borrow.
is offset by $468 billion of investments and cash. However, much of those
investments are credit-card receivables and Eastern European mortgages. The
business, which no longer focuses on manufacturing, is dependent on credit
markets.
Again, GE would have collapsed if it didn't get a government bailout. (The U
.S. government guaranteed all of GE's debts through 2012 for free.) It can't
afford its debt at current, manipulated interest rates… much less at the
rates the company would pay without a government guarantee…
Right now, if GE put 100% of its cash from operations into debt repayment
every year and its earnings stayed at 2010 levels, it would take 16 years to
pay off its debts. It would take at least a decade to pay down its debts to
a more manageable level. No question, if GE were being managed prudently,
that's what it would do.
GE holds about $40 billion in tangible equity. I believe its European
mortgage losses are likely to be at least this large over the next five
years, which means, at some point soon, GE could be going to the market for
new equity. If that happens, the company's share price will probably fall in
half.
Why run the company this way? Because the managers know GE is too big to
fail. They're not running the company as though they actually own it. They'
re simply running it to maximize their own compensation. If it fails, it
fails. The stockholders will get wiped out and the government will bail out
the creditors. In the meantime, GE's managers are trying to get rich. They
want to keep the company as leveraged as possible. They don't want to repay
debts. They want to maximize the company's ability to borrow.
