Yesterday it was one eyed Moody's calling the banks out for under reserving for future losses. Today Barclays actually takes a stab at the truth pointing out that GE Capital has inadequate reserves. Of course if this was believed widely on the street, General Electric would not be alive. This is the primary reason I actually believe it is a zero. Of course they have more flexibility to play accounting games than most because of their unqiue setup. They could, like others are trying to do, grow their way out of a negative net worth. Time is their friend.
General Electric Capital Corp. bonds were cut to “underweight” because the finance company’s $6.6 billion of reserves to protect against losses on its loans are “inadequate” compared with large banks such as JPMorgan Chase & Co. and Citigroup Inc, Barclays Capital said.
GE Capital’s loan-loss reserves as a percentage of finance receivables is 1.8 percent, among the worst in the financial-services industry, Glionna wrote.