Hedge fund took a short
He gets a cut of the profit
Research was released
GE down
Cui bono?
Certainly appears he had an interest…
Certainly appears he had an interest… //
But is he wrong?? GE has been know for years to play around with accounting rules, often times crossing the line. This may be the last dagger if any or most of the guys story is true, certainly a short term flesh wound at the very least. I just wish I knew he was going to be publishing this before it was out, imagine some media folks were in a tight spot thinking, what to do, what to do?
Did you guys hear, I own Ironman now too…
I just wish I knew he was going to be publishing this before it was out
That would defeat the idea buddy
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That would defeat the idea buddy //
I know, shooting ducks in the bath tub, but I would promise to eat each and every one, nothing to waste… (-;
I wonder sometimes how far those laws actually go. IF you are some lowly guy who did copy editing for this article, or its just left out on the table at your work and you have a gander and short GE the next day, how much do you actually have to know. Sometimes people dont know much, but enough to connect some dots, is that just good thinking, or like Martha Stewart are you going to the big house???
For what it’s worth JPM circulated a research piece about a week ago that came to a similar conclusion. Markopolos’ number might not be spot on but I don’t question his assertion that GE has a huge hole in its balance sheet. I’m actually amazed he didn’t raise their pension problem. What was it… four years ago that GE decided to buy a ton of their own stock for their employee pension plan? A good chunk of those pensions are, shockingly, defined benefit so that hole has only gotten bigger as GE’s stock has declined.
Some of the crap GE is dealing with goes all the way back to Welch. He was using repo agreements with banks to hit earnings. He’d “sell” an unsold rail engine sitting on some track out in the middle of New Mexico to Bank of America three weeks before earnings and then buy it back from them 30 days later at a 2% premium or something like that. And he did that for years if not a decade+.
For what it’s worth JPM circulated a research piece about a week ago that came to a similar conclusion. Markopolos’ number might not be spot on but I don’t question his assertion that GE has a huge hole in its balance sheet. I’m actually amazed he didn’t raise their pension problem. What was it… four years ago that GE decided to buy a ton of their own stock for their employee pension plan? A good chunk of those pensions are, shockingly, defined benefit so that hole has only gotten bigger as GE’s stock has declined.
Some of the crap GE is dealing with goes all the way back to Welch. He was using repo agreements with banks to hit earnings. He’d “sell” an unsold rail engine sitting on some track out in the middle of New Mexico to Bank of America three weeks before earnings and then buy it back from them 30 days later at a 2% premium or something like that. And he did that for years if not a decade+.
Their R&D budgets were a slush fund for hitting earnings. You need cash reduce the budget. You going to blow out earnings stash it in the budget.
Certainly appears he had an interest… //
But is he wrong?? GE has been know for years to play around with accounting rules, often times crossing the line. This may be the last dagger if any or most of the guys story is true, certainly a short term flesh wound at the very least. I just wish I knew he was going to be publishing this before it was out, imagine some media folks were in a tight spot thinking, what to do, what to do?
Did you guys hear, I own Ironman now too…
basically what the article is saying is that GE is undervaluing their liability for Long Term Care insurance - By a LOT
GE’s problems with LTC were known - just google and you’ll find articles like this one from October 2017 (a month after this article, GE cut it’s dividend in half)
https://www.wsj.com/articles/general-electric-has-a-long-term-care-problem-it-isnt-alone-1508751001
you’ll note that this article mentions other companies with similar issues -
"Evercore said long-term-care is “one of the larger balance-sheet concerns” at insurers including Genworth, Manulife Financial Corp. and Unum Group. "
you wished you knew in advance… now you know 3 other companies that could take a dump just like GE
**you wished you knew in advance… now you know 3 other companies that could take a dump just like GE **
Well if I had a time machine that went back to October 22, 2017…I believe the problem is not the business itself(although that business appears to be a big problem in waiting), it is how the reporting and accounting of that business is conducted. I have no idea about those other 3 companies, but since it was a couple years ago that it was brought to the attention of the public at large, probably cooked into the stock price. Now if one of them has accounting problems that were being hidden, that is the article I would like to come across the morning before… (-;
If this was simply about shorting it. What’s the recourse. This is really no different than Elon making some absurd tweet to move stock price.
If there was nothing to this. What are the consequences. What recourse do GE have?
If this was simply about shorting it. What’s the recourse. This is really no different than Elon making some absurd tweet to move stock price.
If there was nothing to this. What are the consequences. What recourse do GE have?
Your friendly neighborhood SEC trading and markets and enforcement office
so if there is nothing to it, and 11% of the value is notionally wiped off the company, surely GE would want restitution and recourse to get that so they’d demonstrate that the claims made are false correct?
what was the eventual solution to hedging deflation?
Speaking of Markopolos and the SEC, he pretty much has absolute disdain for them, which is probably why he is now going this route (making it public and forcing them to respond in the open). I heard him speak years ago after his book came out, he said the smart people at the SEC were the ones who were inventive enough to consider removing their shoes in order to count to 20. The exceptionally gifted might be able to consider their zipper and reach all the way to 21.
After the lunch, a group of us went out for beers (Harry picked up the tab), then he spoke even more candidly about his perceived incompetence of the SEC (the earlier comment about counting to 21 was definitely him being restrained). I’m not saying he’s right about GE, but he’s smart as shit, made fraud his mission, can sniff out a problem fast, and seems to be relentless in doing the research to build a proper case. I would never bet against the man.
Marc Cohodes holds the SEC in a similar vein and has a similar approach to dealing with frauds: calling them out in public, bringing it to the attention of other sophisticated investors and the broader market, and forcing them to prove him wrong (if they can).
Marc Cohodes holds the SEC in a similar vein and has a similar approach to dealing with frauds: calling them out in public, bringing it to the attention of other sophisticated investors and the broader market, and forcing them to prove him wrong (if they can).
That whole “discovery” stage in a lawsuit makes companies with some locked closets a weeeeee bit nervous. lol
The fact that GE hasn’t already taken legal action tells me they have skeletons in the closet.
The article you site failed to mention Markopolos’ history of alerting the SEC in 2000, 2001, and 2005 regarding Bernie Madoff’s Ponzi scheme and being not taken seriously. Unless Madoff’s own sons turned him in, Madoff might still be committing fraud and Markopolos would still be trying to capture the SEC’s attention.
He is definitely worth listening to.
I agree. I’d have thought there institutional share holders would be going bat shit crazy and the lack of an immediate response doesn’t inspire confidence that there is no merit in the accusations
Not sure who did it first but Ed o Thorpe identified maddoff long before he was caught
It’s clear Harry has form at catching frauds
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