John McLaughlin: "Ten more major corporate ethic scandals will surface over the next six months."

TMG ^ | 22 June 2002 | John McLaughlin

[Quix]

IF MEMORY SERVES ME RIGHT, John and Paula Sanford were praying with their group about major corporate misdoings for maybe the last 3-4 years--at least one year in real earnest. I wonder . . . He's a powerful fellow spiritually. . . . I wouldn't doubt such has had a hand in surfacing this junk.

[aristeides]

I assume Bill Clinton would have known about GE's fishy position. If in no other way, Bob Rubin would have told him. Was blackmailing Welch over this the way Clinton got NBC to bury the Juanita Broaddrick story?

[doug from upland]

Sinkmaster and Satan's Daughter had info on everyone. They were all afraid to step up and do the right thing.

[rdavis84]

Maybe just a Wishlist, but let's look at Tyson. There's only so many legit ways to move that much illegit money around.

And ol' Jackson, for some reason, never quite seemed to be Totally Legit ;-)

[Tauzero]

"Are they violating the rules?"

I don't think so. We are in agreement.

[Donald Stone]

I may have to eat my words over this, but I think Enron put the fear of God in all the major corporations.

Only time will tell, but GE has a reputation of being a "Good Corporate Citizen" and actually manufactures products !!!!!

My take is that GE simply may not want to be associated with a certain group of so-called professionals that it was involved with and may possibly have severed their ties with these entities !!!!!

Especially if there was any questionable conduct involving those huge GE bond offerings that were made recently.

[VRW Conspirator]

But, I thought the 80's was the decade of greed. The Clinton era is not quite over.

[Donald Stone]

Maybe Welch didn't want to make waves over the Broaddrick story because Welch was also involved in an alleged affair with a reporter or biographer.

Was blackmailing Welch over this the way Clinton got NBC to bury the Juanita Broaddrick story?

[Billy_bob_bob]

My experience with GE products has been very positive overall. Good products at a good price point with real support and service. I'm planning on investing in GE at some point, probably in the next year or so, after the market gets pounded down some more. But I aint buying nothin' right now. We've got a ways down to go yet, IMHO.

[aristeides]

Didn't that affair of Welch's with that Harvard Business School reporterette start pretty recently? Of course, he may have been doing that kind of thing with other women before.

[Dick Bachert]

I'm pretty sure GE will be OK.

They never fell into the EDITDA trap, sticking to old-fashioned net earnings statements.

Besides, we have the company of NBC's Andrea Mitchell (Mrs. Allen Greenspan!) who has a LARGE position in GE by virtue of her employment.

After Hillary made off with a few hundred grand in "cattle futures" and Terry McAuliffe scammed GX out of 18 MILLION, you don't really think Al and his pals will let Andrea take it in the shorts, do you?

And does the phrase "To big to be allowed to fail" ring any bells??

GE will be OK!

[mware]

Hey have you listened to The Wall Street Journal Opinion show on CNBC. I think it is on at 7:00 PM EST Friday nights.

That is about the most civil and intelligent discussion of issues on television today.

[Trust but Verify]

Go to the front of the class. Disney.

[Donald Stone]

Yes, you are correct,it was only a couple of months ago so the time frame wouldn't work.

[Diplomat]

No chance for MSFT. These guys are sitting on nearly 40 billion in cash and the pot keeps growing.

The companies that are in real financial trouble are most of the airlines. Everything they do is funded by debt. If several go, it won't be because of accounting irregularities, it'll be because they are drowning in debt.

If CSCO goes, it won't be that big of a deal. If GE goes, the sky will have truely fallen. I suspect that they can't go under because the feds would intervene to save them just like they did with the airlines after 911.

As for companies like ORCL and SUN, I think it's wishful thinking on the part of some posters.

Companies that will have cooked the books are most likely those who's entire existance depends on the new economy or they are companies that have the ability to easily play shell games with their earnings.
This leaves us with 2 styles of companies. 1. Technology companies that can/did sell or falsify the sale of the USE of their primary asset(s). Just like GX (Global Crossing) did. 2. Companies that are engaged in middleman activity and produce little or no tangable products, i.e. Enron style.

Companies like Q (Qwest), AOL are/were candidates of the first type. I don't put CSCO here because they actually sell routing equipment and solutions. Their problem is high overhead and stiff competition from Extreme and others.

Any of the Brokerage firms, trading houses and banks are capable of pulling off an accounting manuever like Enron. Search for companies that own a myriad of other smaller companies that produce nothing and are in reality just paper companies for tax scam activity. If you find a bunch like that, McLaughlin may be correct. However, I doubt that McLaughlin will be proven correct unless you ultimately include mid to large size companies that fail during this period.

Unfortunately, AOL is not going away anytime soon. I think they already put the big hit with regard to the CD mailing scheme on their financial statement several months back.

[oldironsides]

Some of the banks took a huge hit from Enron, Global Crossing Ltd, Adelphia, WorldCom. I am betting we will see
the results of the bank mega mergers of the 90's soon. The changes in the laws regarding foreign bank ownership made by Clinton and Gore soon after their first election may prove interesting.

[aristeides]

It'll be interesting to see how long Citibank and Bob Rubin weather this storm.

[pepsi_junkie]

I have no knowledge that GE is crooked, though I worked for them 12 or 13 years ago and I recall a scandal they had where a billion dollar deal with some arab nation was done illegally and when it came to light Welch and his crew claimed no knowledge and pinned it all on a low level guy. At the time I thought that the guys at the top were either totally incompetent (a BILLION DOLLARS and they didnt know where it came from?!?!) or they were totally corrupt. I decided corrupt was more likely and that's where my anti-GE bias really started. If I'm right god help american commerce. Once again, I hope I'm wrong. For the record, I hold some GE stock in my 401k still. Suffering lately :(

[pepsi_junkie]

Yup, he was. He's just retired now but GE has struggled since he left, mired in questions about how they actually do their accounting. Rest assured, if they go down as a result of crooked accounting Jack Welch was at the helm when it happened.

[thinden]

thanx for the heads up