GE Capital - First Impressions

GE just finished their 28.July detail presentation following up the 2Q 09 conference call. Here are Gudovac's first impressions;

Management is forcefully trying to deleverage the enterprise.  They are doing a first rate job given the situation.  Two questions for Owners: 

• If management has provided adequate reserves to cover loan losses, GE Capital will spin off a fortune of cash.
  

• If reserves do not cover loan losses, then GE Capital will consume cash by the bucketful. The question in this scenario, will be the cash flow of the Industrial side of GE. Can GE's industrial side of the business carry GE Capital through if loan losses exceed reserves ? 
  

First Comment - In my cursory review of the information provided, there is no quantification of how much GE Capital finances purchases of GE equipment.  This question eventually needs to be answered for Owners to no longer discount GE shares. 

Delinquencies : How much worse can it get ? 

This data should give pause to any Owner.  The information speaks for itself. 

Non Earners : It can't possibly be this bad !  

The slope of the curve doesn't appear to be going flat anytime soon.  

These are the two critical slide in the presentation. Gudovac will review the details and struggle with answering the questions posed above. 

...................more to follow

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Don't Get Massacred !

Gudovac1941

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