"How statistically different was Bernie Madoff's track record from General Electric's 100-quarter record of continual earnings growth ... Do we draw the line with ponzi schemes or do we do something about less clear-cut manipulations as well?"Jeff Immelt is now being investigated by the SEC because he told Hank Paulson in September 2008 that he was struggling to sell commercial paper. A few days later Jeff Immelt told investors that its corporate debt programs "remain robust". While GE is not a ponzi scheme they clearly have a very liberal definition of the word "truth".
-David Einhorn in the foreword to No One Would Listen
GE Capital is a black box of which investors can only guess the contents. Basically, they have to trust management. Given the history of the company that is a tough sell for me and I would only buy earnings at a discount. Yet, investors are once again paying nearly twenty times this years earnings for GE. While everyone likes to point the finger at someone else when they lose money, "it takes two to tango" and the American investing public never learns.