Sunday, March 15, 2015

[GE] update

Below is an alternate count to what I have posted before but no less bearish.  I want to be on record saying GE is likely to go to $20 (or less) by the end of Q3 2015.  Stair steps up, elevator down.  After a little rally next week as shown I model a precipitous fall for GE shares.  If you are in the Jan 2016 puts like me, hold tight.  If you are looking to deploy new money on GE puts, consider the Jan 2017 13s:


Too extreme for you?  The try the 23s:

GE continues to quietly divest of assets like today's news where it dumped an arm of GE capital.  Why do you suppose GE is doing this folks?  I'll tell you: LIQUIDITY CRISIS.  GE is a shadow bank masquerading as an industrial conglomerate.  When the recession kicks in not only will it get hit in revenues, its borrowing costs will also skyrocket at the same time that those who owe it money begin to default. 

GE has precious little cash for a company of its gargantuan size.  It has only 16bn in cash backstopping 365bn in debt and that is despite having been on a selling binge for at least 18 months now.  So at this point it has sold off all the good businesses but it still carries all the bad ones nobody wants.  I have seen this movie before.  It ends badly.  GE will likely either get broken up into smithereens or it will BK (or both) before this is over.

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