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Banks Now Have A $41 Billion Problem

Bamby

New member
These Banks Now Have A $41 Billion Problem In GE

Three weeks ago we reported that in the first nail to its investment grade coffin, GE had found itself completely shut out of the Commercial Paper market when Moody's downgraded its senior unsecured rating to Baa1, from A2, and downgraded the short-term rating to P-2, from P-1, making future sales of CP impossible. So, in lieu of CP access, GE said it would replace that funding with a net $40.8 billion of available credit facilities committed from banks. Or, as we explained "GE will now use its revolver, which carries a higher interest rate, to fund what it previously achieved using CP."

This transition in GE's reliance from commercial paper to revolver is not just a problem for GE, however, which now faces higher funding costs and encumbered assets: with the industrial conglomerate's business and operations deteriorating rapidly, GE has become a major headache for America's largest banks almost overnight.

As Bloomberg reports, the five biggest Wall Street firms have committed to lending at least $3.5 billion each to GE even as the industrial giant is facing rising concerns about its viability and the sustainability of its debt.

http://www.zerohedge.com/sites/default/files/inline-images/ge exposure 11.21.jpg?itok=0ld6Gbbg


zerohedge


Some of the biggest American banks involved in the potential loses. Through experience banks have been able to subsidize or pass all their losses off to others. In this case are the taxpayers going to fleeced directly to cover? Or are they going to conspire to make savers pay for it with holding to substandard interest rates used to cover their losses....:hammer:
 

300 H and H

Bronze Member
GOLD Site Supporter
I had G.E. stock for some years, got out 2 years ago, still with my "skin" on..

It is amazing to see this once iconic company go this route. My understanding is they got involved with the home mortgage bubble, and lost substantial amounts of money..

They are one of the bigger producers of jet engines, and my bet is that part is doing ok. There core business used to be consumer products, and that part of the business they tried to sell off some years ago, with no takers.

I was hoping to not see them go the way of failure. I was hoping a stronger economy would prove beneficial. But apparently not..?

In the days of the 80'sand early 90's they were number one or two of the largest exporters in America...

If they fail, many jobs will be lost, and yet another iconic American company will become history.. Sad

Regards, Kirk
 

XeVfTEUtaAqJHTqq

Master of Distraction
Staff member
SUPER Site Supporter
They are probably too big to fail. All you tax payers better open up your bottomless wallets and help them out.
 
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