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ANALYSIS
March 2, 2009
Sagging Index no longer reflects what’s going on in the market, some say, Replacements? Google it, to start.
March 2, 2009
Downward price spiral will actually boost the cost of capital for most companies. CFOS, take note.
March 2, 2009
The latest bailout at AIG could be a preview of how the president will deal with Wall Street.
March 2, 2009
No corporate defaults. Big debt offerings. Percolating CP issuance. Things may be looking up in the capital markets.
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March 3, 2009 8:55 AM ET
(Reuters) — General Electric CEO Jeffrey Immelt took responsibility for the U.S. conglomerate’s “tarnished” reputation as a growth company, in a letter to shareholders released Monday. “Our company’s reputation was tarnished because we weren’t the ‘safe and reliable’ growth company that is our aspiration. I accept responsibility for this. But, I think this environment presents an opportunity of a lifetime,” Immelt wrote in the letter included in the company’s annual report. GE shares have lost 75% of their value over the past year, a steeper slide than either the blue-chip Dow Jones industrial average or the broad Standard & Poor’s 500 index have witnessed. He wrote, “2008 was a tough year, and we expect 2009 to be even tougher. “The macro-environment has been brutal. The losses in the whole financial services industry are projected to be at least $2 trillion. The lending capacity that has come out of the system is somewhere between $5 trillion and $10 trillion,” he said. Immelt intends to “reset” the financial services business “to be smaller, less volatile and more connected to the ‘GE core’.” “Earlier this decade, our financial services earnings received a valuation similar to our industrial earnings; today, it is lower. In the end, having financial services as 50% of our earnings was too high,” he wrote.
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