GE is struggling to get short term financing at a price it wants to pay. So what does GE do? The answer is twofold:



1) Borrow from the Commercial Paper Funding Facility



2) Pretend this is a good thing.



Consider this ridiculous headline: GE to Sell CP to Fed to Help Unlock Credit Markets.



General Electric Co., the biggest U.S. issuer of commercial paper, plans to use the Federal Reserve’s new short-term funding facility, throwing its weight behind the central bank’s efforts to unlock the credit markets.



“This is a way for us to demonstrate our support for what the Fed is doing, which is providing all-around liquidity,” Wilkerson said.

GE's Disingenuous Pronouncement

GE Sees Shrinking Economy

The U.S. economy will have two or three quarters of “negative growth” once global financial systems stabilize, General Electric Co. Chief Executive Officer Jeffrey Immelt said.



Financial markets are experiencing the greatest disruption since the 1930s, tightening credit for corporate and consumer borrowers. GE, the biggest U.S. issuer of commercial paper, said yesterday it plans to use a new short-term funding facility from the Federal Reserve when the program starts next week, throwing its weight behind Fed efforts to unfreeze the credit markets.



Companies should be planning under a scenario of “what happen if the credit markets are half the size in 2009,” Immelt said. GE still runs the company for its debt to be rated AAA, the highest available, Immelt said. Financial companies will either become bank holding companies or have the AAA rating, he said.



“We still believe if you have low cost of funds, good origination, good risk management, there is a role” for a AAA- rated company, Immelt said. “You’re either one or the other as time goes on.”

GE Will Cut Costs, Jobs

General Electric Co. is cutting costs, preparing for a new wave of regulation from Washington and embracing manufacturing over financial services as ways out of the economic crisis, its chief executive said Friday.



"Costs will be lower in 2009 than in 2008," Chairman and Chief Executive Officer Jeffrey Immelt said in an interview. "That will be true across the board." Employment will also be lower, he said, declining to name numbers or percentages.



GE's NBC Universal business group recently announced cuts totaling $500 million, ...



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GE Monthly Chart





GE Capital Financing Woes

Sales personnel are not allowed to make any more loans this year, and are being told to try to get their customers to pay off their loans. All prepayment penalties are waved for closing loans and GE Capital is about to launch a new incentive scheme for the salespeople that makes it worth their while to get their customers to agree to participate.

GE's Debt