THIS GUY MUST KNOW…
September 25th 2008 00:00
Of all the opinions I read about, so far, on where to put the blame for the financial mess the world is in at the moment, there’s one opinion that I agree with. This is the opinion given by Jack Welch. He was at the helm of General Electric for 20 years.
The Reuters story published by Yahoo! quoted Welch as saying that it is the fault of the “mortgage lenders, legislators, the investment bankers and the others…”
Being the former GE Chairman and CEO, the guy must know something. Here’s a link that will bring you to what I am talking about. This is not to say, however that I agree with everything he said in that story.
The Reuters story published by Yahoo! quoted Welch as saying that it is the fault of the “mortgage lenders, legislators, the investment bankers and the others…”
Being the former GE Chairman and CEO, the guy must know something. Here’s a link that will bring you to what I am talking about. This is not to say, however that I agree with everything he said in that story.
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Comment by British
Jack Welsh is one of the guys we can blame for GE's indeed the markets difficulties today. Their core market Power Generation is right where they need to be, yet he dragged them into finance and even worse deficit finance or in other words, pieces of plastic you continually underestimate your spending on until you're in a 'big black hole' like the US economy is in now.
Yes he was an inspirational leader, but he is a 1980's 'greed is good' figure and we don't need to hear from people like him now, when his successor Jeff Immelt has been going round the globe trying to sell Jack's now 'duff' purchases. The US economy's core problem is deficit finance ! A while back I bought three of the world's four big infrastructure companies but not GE and it has fallen in the market quite badly and only this week it announced that it wouldn't be reaching it's predicted 08 income with not a mention of 09. Scary stuff.
The USA had 51% of world trade in 1946 and that has fallen now to 17%. The high point will be seen to have been in the destruction of the Soviet Union in 1989 and the one world power era of the 1990's. The election of George Bush 11 the history books will tell us was the harbinger of a big steep step down in power and influence whether in the fact that Osama Bin Laden is still free or that US banks are falling it seems every day and Ford, Gm and Chrysler aren't far behind.
I wonder then why you are reading Jack Welsh as he is steeped unknowingly in all this failure and decline. Let's hope the future is Obama's a far more inteligent and reflective figure who will be able to place the US into the right relationship with the multi polar world almost upon us and cut it's military spending to a level consistent with it's newfound and humbler national circumstances.
Regards,
British Bulldog.
Comment by Market Newbie
Stock Market Punk
Please note that I didn't praise the guy. Neither did I say that I am his fan. I read a little about his foray into the world of finance... and the way you wrote you comment here, he must have done something really bad.
But who would know better than the guy who was in the middle of it all? He was pretty much in it, so he must know.
Comment by jillbrowne
It's interesting to look at the individuals and their contributions to today's situation, but the larger context is - how did we get to a business environment that allows such massive debacles?
It is an extremely complex question but at the risk of grossly oversimplifying, I suggest:
1. The corporation is not endowed with a conscience. Some corporate directors believe they must go to the edges of what the law allows in order to maximize returns to their shareholders.
2. The role of government is to set the boundaries of behaviour for (among others) corporations.
3. In a democracy, you get the government you vote for.
Things to ponder.
Thanks for your post & interesting blog.
Comment by British
The Spanish banks by law have to save more when things are good (not lend more and marginally like the anglo saxons). As a consequence they've today got enough capital and one of them Banco Santander is a world beater using this model.
So greed ain't neccesarily good, ( look at the leverage of US banks with other peoples money) and regulation neccesarily bad ( to balance risk and reward like the Spanish). In response to this mess, US brokerage houses are becoming banks to use depositors money instead of the jammed up capital markets and accept a little more regulation, a minor difference.
The Spanish model is the total solution to the problem but only an Obama could be generous enough to the rest of the world to adopt this example for the US and regulate like the Spanish have to solve the whole problem. Indeed US Republicans think the Spanish are their enemy becuase the labor party are in power and so they don't back the Catholic church and pulled out of Iraq, yet they are a US NATO ally!!
Politics then may matter over the next few months.
Regards,
British Bulldog
Comment by British
Sorry to be the bringer of bad news, but for those of you too busy to folow the international headlines, the US bail out plan failed to pass congress last night ( as they're all afraid of the anger they'll get from voters in 6 weeks time, for bailng out rich bankers which is really beside the point!).
As a consequence of the current volatiity Wachovia 4th largest bank was sold for 'a song' to Citibank in a bankrupt give away deal and so call it another bank failure to add to UK's Bradford and Bingley over the weekend and Belguim's Fortis yesterday. We expereinced investors have never seen anything like this in our life time!
The PSE amazingly rose yesterday as most early trading Asian stocks did after a rise in the US on Friday, but by the afternoon it was carnage in Asia and Europe and of course the US fell 7% last night, the biggest amount EVER!!!!!!!!!!!!!!!!! in one day.
The PSE has been drifting along as most Filipino's seem to have few concerns for what happens outside their country but all this really matters. Not just for the PSE which may lose 20% in the panic over the next few days ( or even more) but for everyone else including hundreds of thousands of returning Pinoy's newly employed in the west and a collapsing peso!!!!
This may well be the final 'big sell off' of global equity markets. So sell today and buy the same shares 20% ( ?) lower in a few trading days or weeks time. That's my take on the situation, but then I thought the bailout would pass congress, didn't I!!!.
I spoke about the long term decline of the US recently. It is really gathering pace now as a result of this failure and many bankruptcies of familiar names are ahead, but see this as an opportunity to get in at the bottom soon and reap the rewards over the next few years, as long as you are prepared to take a five to seven year view.
Good luck,
British Bulldog