General Electric is about to release earnings. Ponder the Bear Case Scenario:
GE Credit just like any financial institution will need to ride the wave of increasing interest rates. Long term capital is cheap so funding is cheap. But can customers deal with increasing credit costs and can GE deal with product margin compression as it all squeezes together.
Lean manufacturing and six sigma programs have wrung out all the inefficiencies. They need the next new thing in management. So the built in growth from leaner and smarter has stopped.
Appliances and lighting are diminishing proportionally. NBCUniversal is now out of the picture. these earnings were priced well because of stability. The new mix is still not seasoned.
GE has made several big bets on the green economy. Ultimately this will be the right thing. along the way there will be problems. Consider when Europe was exploring the New World. Not all explorers survived.
George Gutowski writes from a caveat emptor perspective.