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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Paul Senior who wrote (32034)	9/17/2008 1:24:03 PM
From: Broken_Clock	Respond to of 78667

That sounds wise to me. Ratings obviously don't mean squat these days. Anything with debt in a non-essential category is suspect, IMO.

To: Paul Senior who wrote (32034)	9/17/2008 1:39:11 PM
From: E_K_S	Read Replies (1) \| Respond to of 78667

This letter was issued by GE to shareholders last Sunday. Does this change your view? September 14, 2008 To the investment community: In response to questions we received on Friday and because of the extraordinary market conditions, we wanted to provide our investors with additional information on GE’s financial services businesses: 1.Commercial Real Estate A few statistics and facts concerning our $87 billion real estate portfolio: • The business originates to hold; it is not an originate-to-sell model. • 60 percent of real estate assets are outside the U.S. across 23 countries. • Average investment in both loan and REO portfolios is less than $10 million. • Our loan-to-value average is 68 percent. • We do not originate any land or construction loans. In 1Q, we purchased Merrill Lynch’s $900 million construction portfolio at a steep discount. • We have only $125 million of CMBS that are subject to quarterly mark-to-market requirements. • We are executing on our plan and have generated $6 billion of proceeds from asset sales this year. • In-house underwriting has created a strong portfolio with very low delinquencies (0.2% of assets). • As stated in our 2Q earnings call, we expect our Commercial Real Estate business to earn $1.5 to $1.7 billion in 2008. 2. GE Money global mortgages and loss provisions A few statistics and facts regarding our $79 billion global residential mortgage portfolio and GE Money loss provisions: • The business originates to hold; it is not an originate-to-sell model. • ~100 percent of residential mortgage assets are outside the U.S. • No mortgages originated at more than 80% loan-to-value (LTV) without credit insurance. • The UK mortgage portfolio, our biggest at $28 billion, has an average LTV of 71 percent. • We are adequately reserved for delinquencies at GE Money, which for 2Q were 5.92 percent, equaling the December 2002 high. • In the event that delinquencies and non-earnings rise, we will increase allowances for losses. 3. Funding An update on our funding position, which remains strong: • We have raised $70 billion of $80 billion full-year plan; our 3Q funding plan is complete. Trevor A. Schauenberg Vice President Corporate Investor Communications 3135 Easton Turnpike Fairfield, CT 06828 USA T 203 373 2468 F 203 373 2071 trevor.a.schauenberg@ge.com • We diligently match fund our assets and liabilities across our portfolio to reduce interest rate and currency risk. • GE Capital’s commercial paper programs, which total $90 – $95 billion, remain robust with 15 programs in 11 currencies at an average funding cost of Libor less 25 basis points year-to-date in our largest market, the US. • GE Capital cash bond spreads are trading significantly tighter than most major financial institutions. Our cash bond spreads are significantly tighter than our credit default swap spreads. • As stated in previous investor meetings, we are not raising external capital and have no need to. • We continue to have an unwavering commitment to maintaining our Triple A. In summary, our financial services businesses earned $5.2 billion in the first half of 2008, making us one of the most profitable financial services providers in the world. We have over 10,000 originators around the world and our margins on new business originated this year remain very strong. Please feel free to call with questions. =============================================================== The pundants reporting the day to day events say this financial sell off is a 100 year event (a Black Swann event). Will GE avoid the land mines? I do think they will survive but I hope they have limited exposure to the "default swap" paper they carry on their books. It was these types of derrivitaves that took put AIG and Lehman. It becomes am exculating liquidity problem when they mark-to-market their positions each quarter. EKS

To: Paul Senior who wrote (32034)	9/18/2008 12:48:18 AM
From: Madharry	1 Recommendation Read Replies (1) \| Respond to of 78667

its a shame i didnt take my own advice and stay away from all financials. More of a shame that the SEC and COngress failed to act in a timely manner on many of the obvious abuses in in the financial system, allowing poor credit undewriting standards, unlimited short selling, unlimited leverage, ratings based upon psuedo science, loan covenants and agreements based upon ratings as opposed to gaap numbers and ratios. Barney Frank, Paulson, the SEC head moron, should all hand in their resignations with their heads bowed. I find it telling that now that Goldman Sacks is coming under pressure by short sellers, now the SEC wants to ban short selling.

To: Paul Senior who wrote (32034)	9/18/2008 12:23:07 PM
From: Madharry	Read Replies (3) \| Respond to of 78667

have you seen whats happened to genworth financial? thats very scary. AIB seems to drop every day. might be worth now than the value of its subsidiaries. of course lots of companies sell below book now.

To: Paul Senior who wrote (32034)	9/18/2008 3:13:04 PM
From: Don Earl	Read Replies (1) \| Respond to of 78667

RE: "maybe if DOW recovers" An interesting historical note: None of the original DOW are in business today. While a lot of money managers like to point to a chart and tell everyone about all the money they would have made by investing in the DOW in 1929, they neglect to mention that every single component of the DOW has been replaced many times over in the past 8 decades as the companies went bankrupt. I'll toss out a rather bearish question: If the essence of value investing is based on fundamentals, as denominated in US Dollars, is anything a good value when the fundamental value of currency on which it is based is poor?