``We believe the miss and cut to guidance raises credibility concerns for GE over the near-term, given that CEO Jeff Immelt had expressed confidence and reaffirmed guidance and operating targets on his March 13 retail webcast,'' New York-based Goldman analyst Deane Dray wrote in a research report today. ``This implies that the back half of March deteriorated significantly, which is especially unnerving.''... http://www.bloomberg.com/apps/news?pid=20601087&sid=abWAFU294qKY&refer=home
U.S. Stocks Slide After GE Cuts Its Forecast; Investor Says He's `Shocked'.... ``It's shocking in the sense that somebody at GE should have said something earlier,'' Stanley Nabi, who helps manage about $8.5 billion at Silvercrest Asset Management Group in New York, said in an interview with Bloomberg Television. ``There has been a very strong feeling in Wall Street among all analysts who follow GE that earnings would be respectable.''... ``You're shocked,'' Benjamin Pace, who helps oversee about $60 billion as chief investment officer at Deutsche Bank Private Wealth Management in New York, said in an interview with Bloomberg Television. ``They're saying, just like the rest of the financial services industry, `We took the hit as well.' We're still cautious about the U.S. market.''... http://www.bloomberg.com/apps/news?pid=20601087&sid=abVFVmSU6Fcw&refer=home
G7 update:
- G7 ministers and central bankers "The turmoil in global financial markets remains entrenched and more protracted than we had anticipated"
- G7 endorses recommendations of Financial Stability Forum (FSF) including disclosure of remaining exposure, liquidity risk management revisions, improved accounting standards for off-balance-sheet units within 100 days. New capital requirements to be phased in gradually. Welcomes any monetary and fiscal policy that support underlying economic activity and ensure price stability.
- FSF report suggests creation of a "college of supervisors" to oversee each of the largest global financial institutions, and improved infrastructure for the over-the-counter derivatives market
- Luigi Spaventa: Central banks intervening directly in the RMBS market is not necessary. Instead issue government-backed Brady bond-like securities at a discount in exchange for toxic waste on banks' balance sheets.
- Guha (FT): no plans for co-ordinated intervention in markets at G7 meeting. Unofficial ideas floated at previous FSF meeting included radical strategies to fight the credit crisis including temporary suspension of capital requirements, taxpayer-funded recapitalizations of banks and outright public purchase of mortgage-backed securities.
- Bernanke, Paulson: To do: regulators and industry should focus on raising enough capital and manage liquidity in order to deleverage without cutting back lending. Focus not on new regulation but better self-regulation in line with industry demands (see IIF letter)
- BIS background paper about Credit Risk Transfer, including the numbers.
- Senior Supervisors Group: review of risk management practices that worked and those that didn't in wake of turmoil.
- Banque de France: liquidity risk management state of the art.
- IMF: Global Financial Stability Report points to spreading credit crisis with credit losses up to $1 trillion from currently $230bn.
