I've been hearing on the street that the giant conglomerate GE may need more capital.
UBS analyst Jason Feldman said GE may need to raise capital despite the expected $9.0 billion annually in savings resulting from Friday’s dividend cut. (See "GE Turns On The Thrift.") Feldman believes the cut was "necessary and prudent action" and "may mitigate the extent of a credit rating downgrade, but said that first-quarter results may yet warrant a downgrade. "We expect investor dialog to shift to whether General Electric needs more capital, and if so, how much," he noted.
Naturally, the place that any capital-needy giant conglomerate would look for money these days is the US Government's tit which is overflowing with the milk of taxpayer kindness, even tho' they'll first pretend like they're going to some mythical "capital markets" first ...
Feldman offered three options should GE need to raise capital, none of which are good for shareholders. GE may request funding from the U.S. government’s Troubled Asset Relief Fund, it could sell industrial assets, or raise capital through a common equity offering. "We believe that GE would probably treat the first two as options of last resort," Feldman added.
Small problem here ... apparently some people vociferously objected when poor foreclosure-facing home-owners were the subjects of said kindness. Among them, of course, our good friend Rick Santelli who said this:
As he ranted (full transcript here):
Why don’t you put up a website to have people vote on the Internet as a referendum to see if we really want to subsidize the losers’ mortgages; or would we like to at least buy cars and buy houses in foreclosure and give them to people that might have a chance to actually prosper down the road, and reward people that could carry the water instead of drink the water?
Hmmm, and let's see ... Rick Santelli works for CNBC which is owned by our good ole' capital-needing friend General Electric?
And CNBC ran that rant over and over again to create an astroturfed Chicago Tea Party movement ...?
Per Santelli's request, please treat this diary entry as a website to have people vote on the Internet as a referendum to see if we really want to subsidize the losers' mortgage based assets