by arbuge on 8/15/19, 4:35 PM
An alternative viewpoint:
https://brontecapital.blogspot.com/2019/08/the-flat-out-sill...
As Charlie Munger says, always look at the incentives to understand people's behavior. Markopolos' sponsoring hedge funds are shorting GE:
https://www.bloomberg.com/news/articles/2019-08-15/ge-drops-...
"Markopolos is working with a hedge fund he didn’t identify and stands to benefit from bets that GE’s stock will decline, according to the Wall Street Journal, which reported earlier on the accounting report. Markopolos and his colleagues also hope to collect a whistle-blower reward by reporting their findings to regulators, the Journal said."
by mistrial9 on 8/15/19, 3:08 PM
I distinctly recall a USA top-ten business school with an ad for "Financial Engineering MBA" (yes, real math) showing a small, smiling brown-skinned woman in Fortune 500 business attire. At the same time, top management at GE mentioned "financial engineering" as a strength in the business press.
Perhaps it is an obvious evolution of their complex asset leasing models from forty years ago to "financial engineering", but the implications of a USA engineering firm, outsourcing all the work and focusing on money tricks instead.. it just shouts everything that went wrong with American Business, to me.
by camjohnson26 on 8/15/19, 2:59 PM
Here’s a quick blog post that points out a few problems with the report.
https://brontecapital.blogspot.com/2019/08/the-flat-out-sill...
It looks like Markopolis claimed GE’s margins were too good to be true, even though they’re below the industry average.
Also he compares this section of the business with another company that GE spun off, seemingly not knowing that they were originally linked.
Doesn’t seem like a very credible report if these 2 things are true.
by tabtab on 8/15/19, 4:14 PM
GE decided that playing financial tango is more profitable than manufacturing. Too many US companies become shell-game manipulators rather than shell makers. Maybe that's somehow fine and normal, but it's hard to sleep sound at night knowing the US economy's main product is financial tiddlywinks.
by ortusdux on 8/15/19, 2:57 PM
GE has been a mess for a while now. I know many vendors that won't ink a deal with them because they always try and pay at the end of next quarter. Ironically, because everyone knows their tactics, they either end up paying more for reputable vendors that need an insurance buffer, or they end up with a worse product from fringe companies that are willing to roll the dice on getting paid.
by one2zero on 8/15/19, 3:04 PM
by NikolaeVarius on 8/15/19, 2:48 PM
I like they put their money where their mouth is and shorted GE. Actually puts their skin in the game before making accusations.
by piker on 8/15/19, 3:48 PM
Before becoming too concerned with the fact that the author of this report is compensated based on the performance of the sponsoring fund's short position, one should note that it has been argued that allowing Enron insiders who knew of the irregularities to short Enron stock would have supplied a downward pressure that may have saved Enron employees millions of dollars. Many of those employees were investing 100% of their 401k into the stock at its peak.
by Ididntdothis on 8/15/19, 5:56 PM
GE should be a warning for all management gurus. I still remember when Jack Welch was the idol of all managers and I read a lot about how GE was grooming the next generation of super managers. Turns out that Welch didn’t really create a company that could perform with excellence in the long run. Seems he was more of a one hit wonder.
by Grzegrzolka on 8/15/19, 4:00 PM
I have friends working as senior developers for GE in Poland. Basically US branch outsource project to Polish brand because they are paid peanuts in comparison, then part of the work is outsourced to India branch which is paid even less. I have ZERO respect for American mega-corps.
by ummonk on 8/15/19, 4:13 PM
Will the long term care insurance policyholders don't get screwed out of their policies if GE goes bankrupt?
by sschueller on 8/15/19, 2:34 PM
I can't download the report, I get a server error when submitting the form. Does anyone have a direct link?
by VladimirIvanov on 8/15/19, 3:58 PM
Marlopolos point where he says the Baker Hughes investment should take a goodwill impairment charge is incorrect. GE is right when they point out that they own more 50% of the company so it needs to be consolidated.
by crb002 on 8/16/19, 2:57 AM
Wow. Given CNBC is owned by GE.
by sleepysysadmin on 8/15/19, 3:20 PM
I recently did an analysis of GE as well. Largely speaking found their numbers to be too good to be true.
by ptah on 8/15/19, 2:56 PM
if this is based on public record, how come it is only exposed now
by sschueller on 8/15/19, 2:38 PM
Is this the tipping point that will start the recession?
by tradeWar on 8/15/19, 3:48 PM
by one2zero on 8/15/19, 2:23 PM
What's hilarious is that if you look at the website gefraud.com and attempt to download the report take a look at the fine print. These guys SHORTED GE before they made this report public....
Edit: Guys, I understand the logic behind shorting GE, what I found funny was that they made it public that they had short positions in their disclaimer. IF I were in their position I would've shorted GE just like any other individual with this information.