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Strategies & Market Trends : Zeev's Turnips - No Politics -- Ignore unavailable to you. Want to Upgrade?

To: Zeev Hed who wrote (42329)	3/20/2002 3:59:47 PM
From: Crimson Ghost	Read Replies (1) \| Respond to of 99280

PIMCO's Gross says won't own GE short-term debt NEW YORK, March 20 (Reuters) - Bond king Bill Gross is taking on General Electric Co. (NYSE:GE - news), the largest U.S. company by market capitalization. Gross, who oversees $250 billion for Pacific Investment Management Co. and is widely considered the most powerful U.S. bond mutual fund manager, said PIMCO will not own GE short-term debt ``for the foreseeable future,'' in a report posted on PIMCO's Web site. He also blasted GE Chief Executive Jeffrey Immelt and predecessor Jack Welch for not being ``totally forthcoming'' in explaining how GE, based in Fairfield, Connecticut, can steadily increase its earnings at nearly 15 percent a year. GE said on Monday it expects 17 to 18 percent earnings per share growth from continuing operations this year. Gross argued that GE and its General Electric Capital Corp. finance arm, the world's largest issuer of commercial paper, are borrowing too much money, at a time investor confidence is ``fragile indeed'' in the integrity of corporate accounting following the collapse of Enron Corp. (Other OTC:ENRNQ.PK - news) (NYSE:ENE - news). ``The corporation's honesty remains in doubt,'' said Gross in his monthly ``Investment Outlook.'' ``I want companies to face up to their owners and yes -- their creditors.'' Gross was not immediately available for comment. GE Capital spokeswoman Marissa Moretti declined to comment on Gross's report. PIMCO, based in Newport Beach, California, owns a ``small amount'' of GE long-term debt, company spokesman Mark Porterfield said. Gross runs the $53 billion Pimco Total Return fund, whose institutional shares have posted a 8.34 percent annualized return over the last five years, beating 99 percent of its peers, according to fund information service Morningstar Inc. ``FUNDING RISK'' On Monday, Moody's Investors Service reported that Stamford, Connecticut-based GE Capital, one of no more than 10 U.S. companies carrying pristine ``triple-A'' credit ratings, faces ``funding risk'' because it has backed up only one-fourth of its $127 billion of short-term debt with bank credit lines. Gross said GE has been able to boost earnings by using ``high-powered'' GE stock as currency, or borrowing cheaply by selling commercial paper, which is unsecured debt maturing within 270 days. Though GE Capital on March 13 did sell $11 billion of bonds, the second most ever by a U.S. company, in part to reduce commercial paper -- a move Gross called ``intelligent'' -- Gross said GE Capital ``is using near hedge fund leverage of 7-8 times at what appears to be ... non-hedge fund risk.'' This, he said, makes GE look less like Warren Buffett's Berkshire Hathaway Inc. (NYSE:BRKa - news) and more like the "failed conglomerates of yesteryear such as Gulf & Western and LTV. ``Value and honesty should dominate corporate decision-making just like it does at Berkshire Hathaway,'' Gross said in his report, titled ``Buffetting Corporate America.'' GE Capital's Moretti said the finance arm has backed up $33 billion of its commercial paper with bank credit lines, and is working with its bankers to increase this amount by the second quarter of 2002, though she declined to say by how much.

To: Zeev Hed who wrote (42329)	3/20/2002 4:00:05 PM
From: Softechie	Read Replies (2) \| Respond to of 99280

Good try though Zeev. Dow got straight black candle...very bearish short term.

To: Zeev Hed who wrote (42329)	3/20/2002 4:11:22 PM
From: I. N. Vester	Read Replies (1) \| Respond to of 99280

Zeev, what's your prognosis after today's stinkiness? Today showed little sign the bloodletting will end. Naz pushed down close to 1830, close at LOD, no excessive tick and no sign of any wish to rally. What do you think it will take to reverse the downtrend - do you think we need to see more of a washout, extreme negative tick, etc, or do you think we can drift a bit further down then bounce off a support level in the 1800's or high 1700's even without getting a large negative tick? Spring began today, but that spring rally seems to be in no hurry.