GE Aerospace (GE)

[LOVE*PINK]

*** LIKE GM, GE GOING BANKRUPT ***

$6.2 Billion Insurance Charge

Even the first few weeks of 2018 set the year off on the wrong foot for GE. In January, Flannery revealed a $6.2 billion insurance charge which the company had previously not foreseen. This charge came about because of GE Capital's reinsurance liabilities, and it is unfortunately not the last time that these liabilities will impact the company. In fact, GE Capital is likely going to need to allocate about $15 billion to fund these liabilities through 2025. The impact of this is enormous: GE's dividend payments will likely suffer as a result of a lack of support from the company's Capital arm.

Booted Off the DJIA

In June, the Dow Jones Industrial Average (DJIA) decided to remove GE's stock from its 30-name index. Dow officials replaced GE with Walgreens Boots Alliance, Inc. (WBA). The reason for the shift had to do with the fact that, even midway through the year, the price of GE's stock had plummeted by about 25%. GE's significant debt load, more than twice its market cap, dragged down investor interest. The company's power unit also generated poor earnings in the first two quarters of the year, exacerbating the stock's slide. GE has also seen its credit rating plummet this year, falling two levels to BBB+.