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Lifiting The Curtain On The GE Capital Event Horizon

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It is no secret that GE Capital has been the lodestone for GE. What looked like a bit of genius, the vertical integration of finance for the customers of GE's manufacturing and power interests, quickly ran wild in consumer finance and developed a highly opaque balance sheet that has left investors jumpy and hinted at large, unknowable liabilities. Well, GE wants you to just settle the hell down now.

Speaking at an investor conference, Chief Financial Officer Mike Sherin said that 93% of the diversified conglomerate's long-term debt funding -- between $42 billion to $45 billion -- is complete for this year and that there is no need for having to tap any external capital. Further, he said the Fairfield, Conn.-based company is "committed" to GE Capital, its troubled financial arm, and hinted a spin-off was unlikely.
Michael Neal, the chief executive of GE Capital, said that in a worst-case scenario, his business unit could face credit losses of up to $13.7 billion this year. However, the unit is predicting 2009 losses of $9.7 billion.

It says something that losses of only $9.7 billion are good news, but almost any number, if it was believed, would do something to avoid the cosmic censorship beyond the event horizon of GE Capital's balance sheet.
General Electric execs seek to strike optimistic tone [Marketwatch]



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