not true so much anymore but with general electric it is true it's one of the generals general electric general motors and that is an example or a chart that shows what happens when a company is engaged in pure financial engineering and accounting fraud for the benefit of the c.e.o. and others of that ilk at the expense of shareholders the expense of workers the expense of the financial integrity of a nation that's the death of a nation financially engineer by jeff l. mult and his predecessor who i can't remember the name anymore and the current guy who is a guy who is very famously read the verdict and he's the one that sets the motion of course he set this in motion the spike on us financial engineering it certainly excited shareholders who got all the dividends that extracted the the wealth of the company yes well it created a whole group of billionaires but that that those billions recreate at the expense of the bible corporation an integral part of the american economy that's now going bust because remember it was also bailed out in the two thousand a crisis because general electri

, or at least general electric's stock in their hands it all started may of 2016, when steven tusa resumedoverage on general election with an underweight rating and a $27 price target at the time, the stock was trading just north of $30. in a massive 235-page note, he called the earnings and cash flow into question i want to emphasize how bold this call was. when he resumed coverage on ge with an undereight, he was the only analyst with the equivalent of a sell rating and no one would join him in the sell camp for a year please keep in mind something that i think is important, ge always has a ton of investment banking to do, and it was obvious that tusa was out to help you, his research clients it's obvious that jamie dimon wasn't going to rein him in. so good for them the integrity here has been heroic the whole way like captain ahab going after moby dick, he never wavered. general electric announces its plans to merge the oil and gas business tusa, unmoved. he was growing weary of the core industrial segment, something i asked jiff immelt when he was on this set with me in february of 20

not true so much anymore but with general electric it is true it's one of the generals general electric general motors and that is an example or a chart that shows what happens when a company is engaged in pure financial engineering and accounting fraud for the benefit of the c.e.o. and others of that ilk at the expense of shareholders the expense of workers the expense of the financial integrity of a nation that's the death of a nation financially engineer by jeff l. malt and his predecessor who i can't remember the name anymore and the current guy who is that guy is very famous.

not true so much anymore but with general electric it is true it's one of the generals general electric general motors and.

not true so much anymore but with general electric it is true it's one of the generals general electric general motors and that is an example or a chart that shows what happens when a company is engaged in pure financial engineering and accounting fraud for the better.

especially if general electric is doing so under duress.s the morgan stanley chief executive was talking about, it's important to recognize general electric is still rated investment-grade, but certainly a lot of concerns recently. we have seen this in the price of its stocks and bonds. this is a good time for case studies, for example, as bloomberg pointed out today. pg&e in california is an example of a company tapping into its available credit, on what happens when you really need to pull the trigger on something like that. lisa: pg&e is a special story, the biggest utility in california. there was suspicion the government would backstop it if it came under duress. even though it also has the lowest credit ratings amongst investment-grade tier, it had his backstop. normally when a company draws down on its credit line, especially under duress, this is a warning sign to investors. sometimes investors will flee simply in response to a company drawn down the credit line because it screams desperation. pg&e is a little different because it h

general electric added to investments in the third quarter. bridgewater also win in bid for u.s.ation musk order, more than doubling its holding for purchases that come fears onany americans alumina markets are founded on trade concerns. also staying loyal to gold as other investors sold off. that's your bloomberg business flash. nejra: thank you so much, deadly humphrey in dubai. y humphrey. on your debate bloomberg. let's bring back lucy macdonald at allianz global investors. some investors look for clues on what's going to happen in the u.s. market from these 13 filings. is there anything you will be looking at? lucy: in particular this year, there have been -- there's been a shift in growth and value with tech names where there was loss of ownership there. becoming more fragmented in performance, the sector as a whole is performing well but there is more to virgins within that. that means more profit taking in some of the names, and looking to put it somewhere else. the leadership has shifted a bit. more about that in just a second. lucy macdonald stays with the program. let'

the market is doing it with general electric. >> history has shown that even though you have triple bpreads widen before the downgrade, after the downgrade, you still get more selloff because of this vacuum. most sellers are forced to sell by the guidelines and it takes investors some time to get up to speed. markets are separated somewhat so it creates a vacuum and history has shown that they underperform but they are a huge buying opportunity. >> they are an opportunity and ge has a lot of problems. what is the future of the company and are they going to have to give up good assets in order to meet short-term needs? what is the long-term story? >> i was talking generically. i was not referring to ge. jonathan: you talk about the problems this company has got. we know about them a month ago, two months ago. why does the market wake up with -- without much of a catalyst out of nowhere? >> investor psychology is important. something happened in october. fixed income indices have gone negative. -2.5%. high yield is hanging on by a thread. negative return does not sound like traditional

ibm, general electric and the proctor & gamble. i start with general electric they have the best opportunity. like microsoft they have a new leader. larry kulp with s allar record. he is going to reinvig rate.th have world class divisions, aviation, health care pch it's a qution in our vie of winnowing out of deadwood and allowing investors to highlight there. course it's one 12th of price of microsoft, in terms of market cap that's one. >> i. ginni rometty has been trying to turn it zbloorndma the a great acquisition with red hat catapulting them i the cloud. gina rometty has been the ceo longer than nadalla. in 201 they are making $20 a share. she owns the dismal performance. so is she the right person. >> proctor & gamble, quickly, they've been the subject of of a lot of sharehoer revolts and things trying to get them to reinvent themselves as well. >> they've mad a great start. they are at 101 brand down to 6 65. ner leveraging the huge scale. h theie purchasing power. but at the same time allowing various divisions to get clos

the market is doing it with general electric. gershon: history has shown time and time again, even though you have triple b spreads widen before the downgrade, after the downgrade, you still get more selloff because of this vacuum. most investment grade sellers are forced to sell by the client guidelines and it takes high-yield investors some time to get up to speed on the credit. markets are separated somewhat so it creates a vacuum and history has shown that they underperform, but then they are a huge buying opportunity. jonathan: kathleen? kathleen: they are and opportunity as long as you get the story straight, and ge has a lot of problems. what is the future of the company and are they going to have to give up good assets in order to meet short-term needs? what is the long-term story? gershon: just to be clear, i was not talking about ge specifically, i was beating generically in reference to downgrade. jonathan: you talk about the problems this company has got. we know about them a month ago, two months ago. why does this k

well if you want to generate electricity irrigate your fields or collect drinking water then build a dam which is precisely what the authorities in both garrett been doing creating a vast network of as many as three hundred and hydroelectric plants with many planned but environmentalists are raising the alarm saying the dams are having an irreversible impact on both various countries. crystal clear and it would appear untouched the gushing involved areas rodolph mountains along with other mountain revers it is a natural paradise with a unique flora and fauna sunny used to love to come fishing here now he says there are hardly any fish left. the moment but it's been going on like this for years that the water level is sinking and there are less and less fish. some structures don't have anything left at all with all their net worth them up thirty rock. this concrete dam is the reason why it stores water to generate electricity pumping nearly all of it to a power plant nearby. what's left of the gushing yeah is just a feeble trickle. the conservationist demeter coleman of has been exami

this concrete dam is the reason why it stores water to generate electricity pumping nearly all of it to a power plant nearby. what's left of the gushing ya is just a feeble trickle. the conservationist demeter coleman of has been examining these fatal side effects for years. well different motive but not that he did the any living creature comfort by doing. this pipeline diverts the gushing as water to a small power station. built by private investors and subsidized by the e.u. it's a lucrative business at the cost of the environment cohen now says. he did nothing against the developer to force him to fall below. what we see here he's in the political fold them. but a good side killed with the european union money. he wants to show us just how devastating it can get. we're heading to a neighboring valley. severe storms made the chair cosco river swell to a raging torrent that swept up tons of debris. since then the debris has blocked the dam and the river bet is drying up. the few the fish bowl to block the sheriff makes me angry i reckon afraid i will be called recalled whatever yea

up next, general electric in crisis.eans for the industrial icon and investors going forward. this is bloomberg. ♪ scarlet: ge shares falling for a fourth time this week. liquidity concerns are deepening as nervousness also does among credit traders. let's go to lisa abramowicz, who has more. lisa: we have seen this nervousness basis through general electric assets for a number of weeks. if you take a look at these particular bonds, general electric floating-rate bonds have got off a cliff, prices falling below $.90 on the dollar . look at that chart. the question is why. these bonds are tied to general electric capital financing, ge capital, which is brought into the broader general electric umbrella, and there is some speculation that ge will have to give some equity back in to ge capital. goldman sachs might raised the process this is a tale rest for the company and they have to put more equity into this unit in people are pricing in. take a look at the debt distribution chart, taking a the at the 110 -- $11 million o

well if you want to generate electricity irrigate your fields or collect drinking water then build a dam which is precisely what they are for it is in bold garia been doing creating a vast network of as many as three hundred and hydroelectric plants with many. but environmentalists are raising the alarm saying the dams are having an irreversible impact on both various countries. crystal clear and it would appear untouched the gushing area's rodolph mountains along with other mountain reveries it is a net. me. but it's been going on like this for years that the water level is sinking and there are less and less fish live it some stretches don't have anything left to talk with their net worth i'm up thirty one. this concrete dam is the reason why it stores water to generate electricity pumping nearly all of it to a power plant nearby. what's left of the gushing ya is just a feeble trickle. the conservationist demeter criminals has been examining these fatal side effects for years. well before noted but not that he did that but any living creature comfort by doing. this pipeline diverts

there is that but importantly all of that started in the last episode we pointed out that general electric shares had an all time high in two thousand just as bill clinton exited and left behind the destruction of glass steagall and the introduction of the commodities futures modernization act so all those that hyper financialization and the extraction of all the wealth in the looting of the nation and the wealth have been created over the previous generations was possible only once you know clinton gave that as a gift for all of his you know exiting treasury secretaries and other officials who then went on to work for the same firms that engaged in all of this financial engineering so from two thousand we've seen. you know the total destruction of the wealth creation machine in this country and you also see the decline in average wages really start to drop off then from then on the wealth and income gap really take off as all the wealth extraction you you know the stock markets have become a tool for wealth extraction not wealth creation that it used to be so they extracted all the wealth

competitors general electric off to wind the white house intervene there's also problems in saudi arabia siemens was very late to counsel their attendance at the recent riyadh investment forum most companies had dropped out after the murder of saudi journalist jamal khashoggi meanwhile homes even saw their says drop twenty percent over the course of this year. earlier this morning i spoke to zeeman c.e.o. joke as a last of first of his decision to pull out of this investor conference in saudi arabia did indeed cost siemens a twenty billion dollars deal with the saudis. the fact is that we did not sign a significant deal which was worth north of twenty billion that's true but obviously you know. things go as they go and have always made it clear we had a very reliable partner competent partner of the kingdom of saudi arabia we have more than thirty million people mostly young people in the kingdom there has been a lot of reforms which have been initiated so i think we need to look at all factors the things which really really are going to hell in the came going to be shunted the thirty is

. >> from a bright spot in the market to the black hole kwhek ou general electric, the stock getting shellacked falling 6% after the lowers of provides target to shh 6 a share, down from $10 the stock down 50% this year shedding more than half a trillion dollars if you nifrpg the worst is over for now well dan has a way to play it for a bounce >> it's interesting mel you said the down 6% at one point down 12%. it didn't close up that would have been beautiful especially after a 35% drop in the last month. you know you start to get a sense things are getting panicky here mel said the stock is down 50% on theier. and the sentiment is horrible. jp morgan analyst put a $6 price target on it it closed yesterday at 9.10. and the the call is the wamz skens sus still way high everyone needs to come back to him look how it was banging between 12 and 14 for this year and then fell out of bed that's an interesting setup. i'll let you talk to this chart, chart it's a 20-year chart it's the lines that a lot of people might see back to the financial crisis, the last time this stock was a hot size

the reason is people recognize when you have industrial companies like general electric and they haveundamental problems, that doesn't get fixed with just replacing the guy who is in the corner office. so those problems are going to basically live with this company for a little bit of time that said, consider the fact that you're risking 40 cents i was thinking about this call spread because in these kinds of situations you might ask, why don't i just go out and buy that call, selling a call for 10 cents. that's more than 1% of the current price of the stock 20% of the value of this spread. this spread if it reached its maximum value pays 6 to 1. it's a risky thing to try to make a bullish bet on this company. i don't think its problems are over to the degree you may be tempted to do that because you could see volatility, using options is the way to play it i like dan's trade to do so. >> just a fine point it's called "options action. i'm not saying to buy the stock. i like that potential 6 to 1 payout if you have a 50% rally in a stock that the sentiment is getting washed out and we

there is that but importantly all of that started in the last episode we pointed out that general electric shares had an all time high in two thousand just as bill clinton exited and left behind.

talked about general electric g.e. and all the share buybacks which did not save that company from well right now it looks like bankruptcy but of course the democrats in the house could rescue it but here is a tweet that shows big u.s. companies spent more money on buying back shares than they did on capital expenditures in the first half of twenty eighteen the last time that happened for two straight quarters was just before the crisis according to this chart from deutsche bank's thorsten stock there you go these are the share buybacks and that's the stock price and we look like we could be in for another crash crash yeah exactly well. a few points there number one share buybacks used to be illegal why for this very reason just hollows the company out it's like debt monetization by government was the u.s. is also engaged but is kind of like that mt is ation for a corporation which follows a corporation in a corporation collapses number two this is obviously why there's only for structure because companies that are in

eighty mile natural gas pipeline that wall that provide the power for a power plant here can generate electricity to support all of our our infrastructure out here it's a great challenge to ask people to. look around them and identify the minerals that they use so i to use the prop of the i phone fifty two different minerals that i followed at a couple subpar. the frustrating part of the tour it's like where all the fault. you know there's a real problem. in the mines and. the mine is. a symptom of some problem with the way we approach the land the way that we consume things. mike talks a lot about. being an economic necessity i also think this erna can hike necessity living off the land is a necessity here. we have fundamental issues with a relationship to the planet there's been lots of instances that i've seen where indigenous communities just have a better model. just because it might be a smaller number of people it doesn't make it a less valid way of life. i do really care about this place and my family is from here about the end of the day i am also another person that comes here during th

example siemens believes that the us government's political pressure could put the competitor general electric on the spot or in saudi arabia hears even as was on the verge of concluding a twenty billion dollar deal but in response to international pressure over the murder of journalist jamal khashoggi c.e.o. joe kayser said that he would not participate in a last minute investor conference thus upsetting the kingdom. the fact is that. a significant deal of it was worth north of ten dippin that's true but obviously you know things go as take oh i've always made it clear you had better have a partner competent partner off the kingdom of saudi arabia they have more than thirty million people mostly young people in the kingdom that a lot of reforms if half initiated so i think we need to look at all factors the others even if groups such as transportation digitization medical technology and alternative energies are in a better position the profit for the year as a whole even increased slightly to over six billion euros and the company is also cautiously optimistic for the coming fiscal year accor

project to electrify iraq again there are reports you loss that deal all parts of it at least to general electric after don't trump intervened can you confirm that. been a lot of stories being written about this topic the fact of the matter is that siemens has had a very very comprehensive compelling concept not just about rebuilding iraq in terms of electrification but also help the country in training in education with the dual apprenticeship program of the german industry we also promised to help the people in the freed up so for basic healthcare so there was a very comprehensive concept which reached the cover men that the customer liked a lot and obviously it has been. unusual special forces have been intervening maybe out of good reasons that's not my church and to make on the other hand look i mean she even says in the united states there was almost sixty thousand people creating another one hundred fifty thousand indirect jobs so we are a massive economic force in the country we are training people there be to revenues of more than twenty billion dollars so we are first and foremost also

ntsb and federal aviation administration and boeing, the manufacturers of the boeing 737 and general electrico helped make the plane's engine. you have experts from all different fields to be part of the investigation. the identification of remains is very difficult work. for example, there are 20 dentists that have been brought in to help identify tooth fragments that may be retrieved from the crash site. >> ivan, thank you so much for that. in jakarta for us this morning. >>> the fiancee of murdered "washington post" journalist penned an op-ed in the post. calling on the international community to hold his killer s accountable. the trump administration has taken a devoid position of moral foundation. statements framed by fear and cowa cowardice. >> she continues that governments operate not on feelings, but mutual interest. she asks if the democracies of the world don't bring the suspects to justice, what moral authority are they left with? >>> all right. throw rocks, risk getting shot. the president has a stark warning for migrants. the politics of fear along the border dominating as we ap

the medicine said every culture and even electricity are renewable fond of energy food to generate electricity in these countries so it is a growing trend in their region of course they're undermining concerns you mentioned them there of course how all essential a safety concerns being handled and are they well yes and no the where about whether they are being handled on not a lot of the countries. build still thinking of building a nuclear power plants most of them are going to the in china. there we're going to see about seventy to eighty more nuclear plants to be constructed over the next few decades. nuclear terrorism is going to also be part of that concern and shared by a lot of citizens in these countries and at the recent is east asian summit these countries and the delegates of these countries have decided to pursue and build a robust on solid regime office practices to safely use store and even transport nuclear power. within these countries and also have plans to prepare their respective communities with regards to the use of nuclear power in these countries correspondent and singap

or general electric, who stocks that have been pummelled since their cut their dividends, with g.e.e lowest level since the financial crisis as much as we love dividends, they're only worth chasing after if your payout is safe so if you want some income from your stocks, you need to watch out for red flags. you need to watch out for the one i just threw at keith, my cameraman. i told you many times to be wary of stocks with sky-high yields when you see something sporting an 8% yield, it's often an sign that investorer believe the dividend is about to get cut so they sold the stock down, and that pushes the yield even higher but there is another red flag for you need to watch for. the thing that doomed the payouts from bud and g.e. and debt and lousy fundamentals. you can't rely on them to keep paying consistent dividends. why don't we do this why don't we drill down to what's happened at bud and g.e., and maybe i'll typical you what else i'm worried about anheuser-busch has been in a tough spot for years the company built up a mountain of debt thanks to a series of major divisionacq