The U.S. economy faces major problems while Europe’s is “teetering,” the head of General Electric Co (GE.N) told a class of graduating college students on Monday.
“We are at an unprecedented moment in the history of our country. There is economic and social anxiety,” said Jeff Immelt, chairman and chief executive of the largest U.S. conglomerate. “Europe appears to be teetering.”
Still, the risk that the Greek debt crisis could drag down other European economies does not appear to be enough to derail the world’s overall economic recovery, he told reporters after addressing Boston College’s commencement.
Immelt is the head of one of the largest banks and hedge funds in the world. It’s called GE, and they still make some fantastic turbines, jet engines, and what-not, but [b]financial operations are 83% of GE’s gross income.[/b]
They goosed their income with financials for about a quarter century, and it’s gonna blow up on us all. GE’s debt is almost certainly unmanageable, and bankruptcy is quite likely. Yes, I believe the sole remaining original stock from the Dow-Jones will go to zero.
The costs and penalties of the new government financial regulations would certainly have killed GE, which is why it is no accident the threshold for regulation was established at [i]85[/i] % of gross income from financial operations.