The credit part of the recession is not over — for General Electric (NYSE: GE) at least. Moody’s says it may downgrade its rating of the conglomerate and part of its financial services operations — General Electric Capital Corporation — from Aa2. The capital markets are not strong enough, Moody’s reasons, to avoid the risk of events that might severely damage the GE financial division’s balance sheets. Moody’s said in its note about the matter that:
The review is based on Moody’s view that the risk profile of market-funded financial institutions, including GECC, is higher than previously reflected in their ratings. With a large and recurring need for wholesale funding to support its operations, GECC is inherently vulnerable to fluctuations in investor confidence relating to the firm’s creditworthiness and to funding conditions in the market generally.
Geithner on Austerity
Treasury Secretary Tim Geithner will warn that austerity measures taken by, or perhaps forced on, many European…
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