Wednesday, November 12, 2008

Fed to Back GE Debt

Where does all this stop?  We have American Exress becoming a bank holding company so they can borrow from the Fed.  We have GM begging for aid.  AIG borrowing some couple of billion more.  Now, the government will guarantee GE debt. 

WSJ is reporting that GE will paticipate in FDIC's (Not so) Temporary Liquidity Guarantee Program.

The company says the U.S. Government will now guarantee all qualifying GE Capital debt issued from Nov. 14 until June 30, 2009. GE said the government will guarantee up to about $139 billion of long-term debt, commercial paper and other debt programs such as GE Interest Plus. "This does not mean that GE intends to issue this amount of debt," Mr. Wilkerson said

What's another couple of billing between friends?  The list just goes on and on.  It's so bad that $100 billion does not even seem to register anymore. 

Although I know there is no chance, I hope the congress refuses the $350 billion of the TARP.  But knowing our congressmen and congresswomen, they would probably offer another $700 billion for the TARP - as long as GM is eligible for it. 

At this point, all these companies seem to be sinking even as they are getting more capital.  May be it is better to just let them go down rather than have zombie companies. 

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