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Technology Stocks : John, Mike & Tom's Wild World of Stocks -- Ignore unavailable to you. Want to Upgrade?

To: Logain Ablar who wrote (2727)	5/5/2002 7:18:23 PM
From: John Pitera	Respond to of 2850

GE has both of those earnings component worries and also the additional loss of earnings in their Commercial Paper funding business. GE has had 3 times as much Commercial Paper outstanding as bank credit lines and now that Bill Gross has brought it to everyone's attention, they are moving their funding costs further out the yield curve and so they are lossing part of the huge positive carry trade they have had. The trade being borrowing money at 1.80 % in the commercial paper market and then lending it out at 10% etc. Tim, I could give you money at 1.8% and you could certainly turn around and put it in 2 year notes and KNOW that you are going to make a profit on it over the next 2 years. If you lent it out over 10 years, you'd make a much bigger spread. John