Posted on 03/03/2009 4:05:41 PM PST by Canticle_of_Deborah
This is what is going to happen, as I noted in BlogTalkRadio yesterday afternoon, if "The Bezzle" is not removed from our system NOW.
Take a look at that folks. That's a snapshot of today's volume for June GE $2.50 PUTs.
That's over 52,000 contracts traded today, controlling 5.2 million shares.
They were purchased for about 30 cents, which means that the price has to be under $2.20 for them to go "in the money".
This is a bankruptcy bet on General Electric by the third week of June.
That's right - General Electric.
--snip--
General Electric is a stalwart of our financial and industrial system. A bankruptcy by GE would be catastrophic for our economy and capital markets. The follow-on damage with suppliers and customers would be even worse.
(Excerpt) Read more at market-ticker.org ...
Obama says buy stock!
People are getting out. I think they are heading for higher ground.
What is “the Bezzle”?
And why would GE’s falling stock price cause bankruptcy?
This is all being done on purpose ....
The stock price is falling because the market thinks there is a risk of further big losses coming for GE..their financial side. Sounds like they have about $30B of potential losses in Eastern Europe.
I sure hope my GE friends sold their stock a while back..a lot of them kept their GE shares when they retired.
That portion of market wealth formed by fraud and/or abuse.
And why would GE’s falling stock price cause bankruptcy?
Perhaps if undercapitalization threatens credit rating.
Denninger has no idea, nor do you or I, what the options are being used for. Could be hedging, could be part of a volatility play. There is no justification for calling this a bet on bankruptcy, with the information we have (none). And it is not that large a block, only between 1% and 2% of outstanding shares involved in open puts at this level.
Let these companies bite the dust! It will be just fine if the gov't just stays out of everything! Another 30 billion to AIG just so they can stay afloat????? Why?
Backing for debt.
The falling stock price would parallel and reflect bankruptcy in the offing. The put option is a bet that the stock will go down to this level (2.20) by June umteenth. Someone is betting big money that that will happen. In fact, the total put action at 2.50 for June was 81,000-plus contracts. That is a very big number.
I’ve always said that the government will not let GE fail..
GE just signed some big contracts today with China and Australia involving power plants and jet engines. GE is like a giant mutual fund and some of its involvements (e.g., mainstream media outlets) are tied too closely to Obama’s success.
We have all been closely following the state of the economy and the recent signing of the American Recovery and Reinvestment Act of 2009, popularly known as the Economic Stimulus Plan (ESP). The ESP promises to bring extraordinary change to a variety of business sectors, including healthcare, where billions of dollars have been pledged to develop and support information technology.
The ESP opens up many opportunities as it is designed to accelerate the delivery of information technology to improve performance and connectivity in healthcare, ultimately reducing costs and improving patient care. The bill, which strongly promotes electronic health records (EHRs), health information exchange, interoperability and quality, puts information at the center of driving real change in the industry. This focus is good news for healthcare, for you and your patients, and for us at GE Healthcare as it reinforces our combined vision.
The ESP funding...
While there are many details yet to be resolved, the broader stimulus bill includes a package of approximately $31.2 billion for healthcare infrastructure and EHR investment, and this legislation is expected to impact providers and vendors quickly. The $31.2 billion is the gross investment that includes the Congressional Budget Office assumption that the program will save an estimated $12 billion from higher EHR adoption, resulting in a net cost to the federal government of $19.2 billion.
The investment will largely flow from Medicare and Medicaid incentives to physicians and hospitals for the "meaningful use" of certified EHRs, including those that currently have systems installed, as well as new installations or upgrades. With the incentives, non-hospital based physicians could receive up to $44,000 from Medicare or $64,000 from Medicaid (depending on the level of Medicaid patient volume) and hospitals with high Medicare and Medicaid volume and a large number of patient discharges could receive up to $11 million from both Medicare and Medicaid. These incentives will be paid out over a 4-5 year period, with initial eligibility starting in 2011.
Partnering with you...
GE Healthcare has had a number of team members dedicated to the ESP since November, working directly with government officials and legislators in Washington D.C. to shape the bill and champion for healthcare IT provisions. They will now shift their focus to tracking and guiding the implementation of this new law over the coming months. In addition, GE team members are actively engaged with the certifying and standards-setting bodies that may play a critical role in defining what is required in the EHR to enable provider organizations to take advantage of the ESP.
As your partner, our focus is on advocating on your behalf to ensure that we can continue to help you achieve high performance care with EHRs today and into the future as implementation of the stimulus package progresses. We look forward to collaborating with you and collectively leveraging our experience and expertise to prepare for the benefits of the ESP.
We value our customer relationships and the investment you have made with us. We look forward to continuing to provide you with solutions that support your success. We will keep you informed at upcoming events and have created a web site with FAQs to answer key questions. In addition, please feel free to contact us directly at centricity@ge.com. Thank you.
I am appalled. While I know there are many quality people at GE, I find it disturbing that GE is so excited and ready to be on the dole. GE, the company that created the American electronics for the Panama Canal...ready to dive headfirst into socialism. If it were me, would I take the money, knowing where it leads? This saddens me to no end.
GE’s albatross is GE Capital. They went heavy into commercial real estate and over 33% of their holdings were acquired in 2007, at peak prices. Their exposure in the coming burst of the Commercial RE bubble is a potential (some say probable) death sentence.
Someone rolled the dice with $17k betting GE is going down in a few months. Maybe smart, maybe not. It could simply be a GE retiree revenge betting the last of his GE 401K that he hasn’t lost.
hmmmm...... thanks all.
That's over 52,000 contracts traded today, controlling 5.2 million shares.They were purchased for about 30 cents, which means that the price has to be under $2.20 for them to go "in the money".
GE closed at $6.89 today. If the June $2.50 puts were bought today for around 30 cents, even a further drop of a dollar or so in GE's stock price could send those puts through the roof, easily tripling their price or more, making them a pretty good bet even if GE just shows more weakness and doesn't go bankrupt...
Typical market bottom. This is gambling, just like buying stocks at 14,000. Why do you think Obama said “buy stocks” today? Soros has a alot invested in this guy. Stocks are going up. The press is going to make Obama look like a genius. His evil plans must be backed up with tangible results so he can pass his agenda. This is step one.
all Obama’s short buddies cashing in on the backs of our 401ks. they’ll still have social security though, right?
Apparently they helped too many bankrupt businesses bounce back.
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