Can the Little People (ie, US) Beat Xcel Energy in Boulder? These People Say YES

xcel-energy-sucks

Xcel Energy, the people who started up the Colorado solar-to-home movement only to withdraw from it quicker than John Wayne Bobbitt lost his wang, are back at the douchebaggery again.  This time, a group of very smart and very environmentally conscious people called New Era Colorado is putting the kibosh on their plans for coal-fired world domination.  Check this out:

From the video page:

This is a grassroots David and Goliath campaign to create a landmark model for how communities can take control of their energy future: http://igg.me/at/localpowerYou can support this effort on Indiegogo:http://igg.me/at/localpower

This is pretty great.  These folks are simply trying to stop the mass amounts of money from flowing into the pockets of the “we don’t give a shit” power brokers and back into the hands of the community, and to save the Earth one city at a time.  Can you imagine what would happen if this works?  I for one would love to see solar panels and wind turbines out en masse instead of coal fired plants spewing black death into the atmosphere.  But, that’s just me.  I’m sure the Xcel Energy executives need their Mercedes and homes in the Hamptons, too.  Right?

Check out the Campaign for Local Power’s IndieGogo campaign.  Feeling frisky?  Donate ten bucks, you’ll literally change the world.

From the IndieGogo campaign website:

Back in 2011, our community did something no other community had ever done before: we voted to explore taking control of our power supply for the sole purpose of lowering our impact on the planet. Xcel Energy spent nearly $1 million dollars on that election, but lost–because a committed group of community advocates and a small nonprofit that engages young people in politics won the day. Outspent 10-to-1, the grassroots coalition registered voters, knocked on doors, and made thousands of phone calls.

With voter approval, the city launched an extensive analysis and found that it could get cleaner, cheaper power that was just as reliable all on its own.

But now, Xcel is back, with a misleading initiative they’ve helped place on Boulder’s fall ballot that would stop the city’s formation of a local electric utility dead in its tracks. Their ballot measure is masquerading as a way to reduce government debt, but it’s really just a dirty trick–the measure includes impossible, even illegal, requirements that would stall out the very process voters already approved.

They’re back to undermine our local process, because the city’s findings made it clear that they stand to lose more than the $35 million dollars in profits they make annually from Boulder. They know that Boulder is on the verge of setting a precedent of national significance that would threaten not just Xcel, but the very core of the coal energy’s business model–not to mention that industry’s billions of dollars in profits.

We out-organized them in 2011, and we know we can again in 2013 if we have the resources to achieve the reach we need. Boulder has already voted to move forward–this fight is about keeping the coal industry from holding us back.

Can you help these smart people defeat the coal giant in the region?  Like New Era Colorado on Facebook, I’m sure they’d appreciate it.  Xcel Energy will not.

Lighting Company Stocks, A Post Mini-Series – Should We Be Looking at Them More?

You know, there is an interesting aspect of the lighting industries as a whole that really mystifies me:  lighting company stocks.  We hear every day about how the Dow is doing, and Cramer yells and screams about Alcatel-Lucent doing this-that-or-the-other, but no one’s out there screaming about how Barco’s stock is doing (EBR:BAR) or how Chung-Hwa Picture Tubes LTD (TPE:2475) is doing lately.

Something you should be asking yourself is “really, who cares, Jim?”
(honestly, I ask myself that all the time because I can be one rambling mopho)

Well, you should care, this is your money in these industries!

Money and markets in the last few years’ American economy should go to prove how important they really are.  Our industries buy and sell each other, there are hostile takeovers in companies, and it’s all international – Barco NV (a Belgian company) owns the American company High End Systems, for example.  How much do you know about the lighting industries’ companies?  It’s kind of an amazing thing to watch – if you have something like Google Finance (which is a web stock tracker and free, duh), you can see the graphs of the stock price and see why stuff is happening, in the news articles there on the page.  Yahoo also has one – finance.yahoo.com – which is just fine too.

Here’s the other thing – and I’m speaking primarily to the college-age and high school-age people who read JimOnLight.com…

Folks, we live in a capital-driven society.  Money is what makes the world go ’round, and just like anything else, you can use it better if you read the directions, per se.  You wouldn’t operate a firearm without some instruction, right?  Would you use a woodchopper without at least glancing at the manual?  The bottom line is – kids, you’re coming into your own right directly into an economy and a market that is pretty competitive right now.  Reading into things like the markets regarding lighting can help find work.  You never know when a certain industry has a boom, like a pharmacy company for example, and they start throwing a lot of conference/convention things.  Somebody has to provide lighting and production for those events.  As my new and really cool friend Mark Hetrick from San Francisco says (and I’m paraphrasing here, Mark, I could never even pretent to repeat your genius):

“There’s always something going on in San Francisco.  You can come here and work across the gamut of entertainment lighting simply depending on what’s going on in the market.”

This is why it might just be fun to pay attention to the markets.  Isn’t that so ridiculously logical?!

Let’s start out by looking at a few stock captures from my account at Google Finance:

Right now, it looks like Barco is doing fine – this graph shows their stock price up 2.4% at the time of this capture, at $56 bucks a share.  Something that is a bit worrying to me is a comment I read in an article about Barco’s digital projector business doing unbelievably well – the comment regards their lighting business:

Barco NV, the Belgian maker of digital cinema projectors, reported the highest second-half profit in at least 10 years after ramping up production capacity and will pay a dividend for the first time in three years.

Second-half net income was 35.2 million euros ($48 million) compared with a net loss of 53.8 million euros a year earlier, the Kortrijk, Belgium-based company said today in a statement. Sales surged 61 percent to 528.8 million euros, beating the 460 million-euro average of three analyst estimates compiled by Bloomberg. Barco plans to pay a dividend of 1 euro a share.

With fourth-quarter orders slowing to 231 million euros from a peak of 298.9 million euros in the second quarter, the surging shipments of cinema projectors depleted Barco’s order backlog to a nine-month low of 426.9 million euros. Barco, whose lighting and digital-billboard business was unprofitable last year, said it plans to “regroup and recombine” some operating divisions, details of which will be announced on Feb. 18.

Okay, hmm.  Now I am very curious to hear what the news is here.

Let’s take a look at the company developing the ESL incandescent lamp replacement – Vu1 Corporation:

Vu1 Corporation is the company that’s putting out what they claim as the “fully functional replacement for the incandescent light bulb.”  Folks, that’s a pretty big deal thing to say – CFLs sure aren’t a great replacement for the incandescent lamp, and LED A-lamp replacements aren’t there yet either.  Vu1 has a patent on their ESL technology (which means Electron Stimulated Luminescence™), but we’re still waiting on the lamps to ship.  I ordered mine almost a month ago, but I’ve not heard anything yet.

My guess is when that thing hits the market, if the technology is as good as they say, that stock is gonna freaking explode.  An incandescent replacement lamp?  Amazing.  World, I’m guessing that we need to get ready.  I’ve been wrong before (ask my ex-wife or ex-girlfriends), but I’m thinking that this could be huge.

A related and mind-blowing market is the solar market.  Holy, holy, holy crap.  The market is in a bit of an upswing – and there are a lot of companies playing in that market.  Let’s look at three companies – First Solar, Trina Solar LTD, and SunPower Corporation.

First, let’s look at First Solar – their stock is kicking some major butt right now, at $168.94 per share:

Great, right?  Well, if you’re an investor, then heck yes it’s good!  However, if you look into the news, there are some weird signs going on.  For example lately, a bunch of people have bought the option called a “put” on First Solar – a “put” option is basically a bet that the stock will decrease in value, but you then have the right to sell it at a locked in price.  It’s so freaking weird and confusing.  It generally means that people are expecting that stock to decrease in price.  Also, there’s a news article out there that says some analysts from Credit Agricole “downgraded” the First Solar stock from an “outperform” rating to an “underperform” rating.

What in the f$@# does that mean?!  Does that means something bad?  Is it something good?  To completely contradict all of that news, here’s an article about how First Solar is getting some love from the Obama Administration through their exchange-traded fund (ETF) called the Guggenheim Solar ETF.  Oh, and First Solar’s fourth quarter earnings are expected to be strong.  News is news.  It’s all information to absorb and analyze.

Now, here’s Trina Solar Limited‘s performance:

Trina Solar is doing pretty well for itself lately, it’s up a buck and a half or so over the last week.  There are news stories about oversupply threatening solar profits, for example; an analyst here says that Trina Solar stock is a good short term investment; and this guy says that Trina Solar stock is something to put in your portfolio, with a price target of $41 bucks a share.

The last in the solar category we’ll look at is the stock activity of SunPower Corporation:

This is a weird one.  Don’t get me wrong, over the last three months, this company’s stock is doing good!  It’s up almost three bucks over the three month look, and it’s showing that solar is earning despite the reports that solar demand has been exaggerated (which isn’t true or false).  But here’s a market report saying that SunPower is trading at about the middle of its high and low.  And another “however,” here’s a report saying that as of February 11 (which was last Friday), SunPower’s stock was up 4% because of California’s demand for more solar deployment.

News is a weird animal, isn’t it?  Stocks are a weird animal, too!  I find it very easy to track a company’s growth along with the reports that come out – and the news actually makes a lot more sense when we see how the lighting companies out there are competing with each other.

In the next post in the series, we’re gonna look at semiconductor stocks – you know these as LED companies like Cree and Lighting Science Group.

Stay tuned!

Stock Market – Lighting Edition

Something hilarious happened to me last week – well, hilarious to me.  I was watching the news early in the morning, and as I flipped through the various new sources it was literally “the stock market” this, and “the blue chips” that, and “Main street took another hit today.”  Oh – and JP Morgan irked the United States a few weeks ago when it unveiled its plans for high pay and big bonuses.  Again.

I could not help but thinking that no one talks about lighting industries’ stocks.  We provide the world with the ability to light up the darkness – we bring innovation to innovation.  While people in our industry lose their jobs one after the other and stimulus money gets tossed into projects across the nation, don’t you wonder how the companies IN our industry are doing?

I captured some 90-day stock market charts last week for a handful of companies in the lighting markets.  Obviously this is not an exhaustive list – if there are stocks you follow that you think I should be following, will you either post a comment below or send me a comment through the contact form?  Pretty please?

Okay, let’s start out with Barco (Barco NV – BAR):

On January 26, 2010, Barco’s stock closed out at $28.94 per share, down 47 cents (or -1.6%).  Barco’s market cap is $369.35 million – “market cap” or market capitalization is a number that represents a corporation’s outstanding number of shares multiplied by their price.  What this means is that Barco has 12,760,000 shares of stock, each valued at around $28.94 each.  Multiply $28.94 X 12,760,000 and you get around $369,350,000, their current market cap.

Something that strikes me as a bit sad, whether it is related or not, is when you put news against the market reports.  For example, look at their stock price around the beginning of December, right when they laid off a bunch of High End Systems workers.


Look at Lighting Science Group – a company that engineers and makes LED products (Lighting Science Group Corporation – LSGC):

LSGC’s stock as of 1/26 was at 88 cents per share, with 30,460,000 shares outstanding – giving LSGC a market cap of $25,890,000 (remember, shares X cost = market cap).  That share cost was up 3 cents (or 3.53%).  For those of you following the news, LSGC announced at the beginning of the month that they were taking on Zachary Gibler, Carlos Gutierrez, Michael Kempner, Joe Montana and Michael Moseley to their board of directors.  You might recognize Carlos Guitierrez as a CNBC news contributor and Commerce Secretary under George W. Bush.  And yes, Joe Montana is THE Joe Montana, the football guy.

LSGC just this last week announced that they were commencing a rights offering for up to about 25 million Series D shares of non-convertible preferred stock (and warrants), which represents the right to purchase up to about 25 million shares of common stock.  All of these terms are extremely confusing to people (like myself) who don’t follow the market nose first.  LSGC’s Securities and Exchange Commission filings on this news are here.

You might be asking yourself, “What on earth are “Series D Non-Convertible Stocks?”  Preferred stocks are debt instruments (like all stocks) that have a higher payout priority than common stocks.  This means that dividends must be paid to preferred stock holders first before common stock dividend payouts.  In the case of these stocks, the holders don’t have the option to convert them to common stocks, and preferred stocks normally don’t have voting rights.  It’s all very complicated in my humble opinion.


Now look at General Electric (General Electric Company, GE):

GE has not had that great of a time lately as far as the stock market is concerned.  As of January 26, their stock was down 6 cents at $16.29, and they were having one of the worst periods in their almost 120 year history.  GE lost its AAA credit rating last year, and its GE Capital division ain’t doing so well – their commercial real estate division is getting hammered with vacancies and all that kind of real estate crap.  GE is a HUGE company though – their market share is 173.48 billion – that’s $173,480,000,000 – with 10,650,000,000 shares outstanding at about $16.29 a share.  That’s a lot of zeros.


Let’s move on to a company that people are hoping will do some amazing things with their Electron-Stimulated Luminescence technology, or ESL – the VU1 Corporation (VUOC):

VU1 is actually up 5 cents from the time I polled these numbers – but as of January 26 it was at $0.49 a share, with almost 86 million shares outstanding.  Their market cap was $42,050,000 approximately, and they were down about a dime a share last quarter.  The ESL technology is interesting, and on the VU1 blog there is talk of progress on an ESL replacement for the typical fluorescent tube.


Ok, now look at semiconductor manufacturer Cree, Inc (CREE):

Cree is having a great time right now – their stock price is up over 10 bucks since October 2009, and set a new record for the company’s stock prices on January 19, 2010.  They’re actually down 2 bucks since January 26 when I pulled this report, but they’re still kicking some tail.  With 106 million shares at around 60 bucks is giving Cree a market cap of 6.31 billion dollars – $6,310,000,000.  I love to actually type out the digits, it really gives you perspective.

I wish I had a few extra buckaroos to invest, because I’d probably toss some of it into Cree stock.  Analysts are flipping out over Cree’s prices and growth.  I hope their growth spawns new and excellent technologies that are positive advancements towards our growth as an industry and not just the same old stuff for more money.

Some news I did not expect to hear lately was the agreement that one of their competitors Arrow Electronics signed with Cree to provide Arrow’s customers with Cree power products (Silicon Carbide JBS).  Go, Cree!


The last company I want to actually talk about is Philips (Koninklijke Philips Electronics NV – PHG):

From when I pulled this report, Philips’ stock is down a buck or so per share.  Philips is another enormous company with so many divisions – they have almost a billion shares of stock outstanding – 927,460,000 shares.  Their market cap (927.46 million shares at around 30 bucks a share) is $29.17 billion dollars.  Huge.

Philips is a monster in the LED business, and if you’re in the lighting industry you’ve heard of their LumiLED products.  TIME Magazine gave Philips the honor of calling their LED replacement lamp as one of the best inventions of 2009, and people rave about their other product lines – LED wash fixtures, high output LEDs, and their various lines of consumer non-LED products, including incandescent and fluorescent products.  They’re an industry leader.


None of this stuff is easy to understand, and believe me – I’m a lighting designer, not a market analyst.  But it doesn’t take a Merrill Lynch quant to break down the major components into understandable pieces.  I kinda look at it like this – when more people understand what is going on with a subject, it becomes that much more difficult for insiders in that industry to screw the public over.  If I can help make that happen even a little bit, then we have collectively made an investment in our future and success.

I’m not gonna talk about the reports below, but they’re just graphs of some other companies’ stocks that I follow.  If you have suggestions of companies I should watch, drop me a line or comment below, will ya?

Tatsuta Electric Wire and Cable – HOLY CRAP – $14.15 billion dollar market cap (for only 65 million shares), and their stock is at $217 a SHARE!

Chung Wa Picture Tubes:

Molex Inc – everybody knows Molex, right?

Barco, What’s the Deal with High End Systems?

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The giant lighting and projector company Barco has been doing really, really well – they bought High End Systems, they’re always getting contracts and selling lots of their gear.  Check out some stock info – I took some captures of my stock tracker.

Year to Date:

barco-year-to-date

Last Three Months:

barco-3-months

Barco’s stock is sitting at $33.56 a share – up $0.27, or 0.81% today.  I am always reading news stories about how Barco has created some new partnership, released some new product for touring video, or presented some new display technology and made yet a new partnership.

Why, if all of this stuff is going on, are High End Systems personnel getting laid off?  There are a lot of really good people who have been let go from High End Systems by Barco – it is business, I understand, don’t get me wrong.  But what are you doing with High End Systems?

The question is fairly innocuous and certainly isn’t directed to offend, but High End Systems is a brand that has been a huge part of the lighting industries for decades – and there is little to no information about what is going on with HES.  The High End Systems website hasn’t been updated in months, and this looks bad.  What is going on here?  At least be up front about what’s going down.

Barco, whatever is going to happen with High End Systems is obviously up to you.  I, as someone who has a lifetime of respect for the lighting industries, High End Systems, and your brand as well, is really hoping that some of that respect is paid to a company (and its workers) that has been a major part of the industries for a long time.

NEMA Index for Q2 2009 Is Even Lower. That Sucks.

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Well, excellent. </sarcasm>  The NEMA index is at a new low – a 4.3% drop over the terrible numbers from last quarter.  Hey, the awesome banker behavior that’s apparently still going on doesn’t affect absolutely everyone, does it?  From a press release at the National Lighting Bureau:

Silver Spring, MD: The National Lighting Bureau (NLB) reports that second-quarter 2009 NEMA Lighting Systems Index data reveal an additional 4.3% drop from the first-quarter’s then-all-time-low performance. On a year-over-year basis, the Index plunged by almost 25%. And for the third consecutive quarter, no bright spots: Each covered equipment category posted lower inflation-adjusted shipments compared to the second quarter of 2008. Luminaire shipments were hardest hit.

Established in 1998, the NEMA Lighting Systems Index is a composite measure of lamps, luminaires, ballasts, emergency lighting, exit signs, and other lighting products shipped nationally and internationally from the United States by the 450 companies that comprise the National Electrical Manufacturers Association (NEMA), one of the National Lighting Bureau’s founding sponsors and creator of the enLIGHTen America communications campaign (www.nemasavesenergy.org). NEMA members manufacture a wide range of products used in the generation, transmission, distribution, and control of electricity, as well as innumerable end-use products in addition to those used in lighting. The value of NEMA members’ annual shipments totals $100 billion.

The Index uses 2002 data for its 100-point benchmark; second-quarter 2009 performance receded to the 72-point level, its lowest ever.

NLB Communications Director John P. Bachner commented that “the return of the residential market probably began during the second quarter, if not the first, but whatever optimism that uptick generates has to be tempered by recognition of continuing consumer frugality and a fragile labor market. Unfortunately, that situation could dampen the sales of energy-efficient lamps, like CFLs [compact fluorescents]. Even though they can save a small fortune over their useful lives, more energy-efficient lamps have a higher first cost that many consumers are just unwilling to accept right now.”

Optimism about the return of the residential market also must be tempered by realities of the nonresidential market. According to NEMA Economic Analysis Director Brian Lego, the commercial real estate market is getting worse, not better. He noted that “office vacancy rates are fast-approaching the levels observed during the aftermath of the dot-com bust and 2001 recession as financial and business services companies have laid off scores of workers while the manufacturing sector’s downturn has produced a new record high in industrial vacancy rates…. Replacement demand for lighting as well as retrofitting to energy-efficient systems will be dampened as firms try to find short-term fixes to cut costs and restore profitability. Even as economic activity begins to recover within the next few quarters, the sheer amount of vacant office, industrial and retail space available will weigh on new construction activity, and by extension keep a lid on demand for nonresidential-use lighting equipment as late as 2011.”

Bachner said he remains optimistic that lighting retrofits will energize the market sooner rather than later. He commented, “As much as we’ve talked about energy efficiency over the years, we’ve really only scratched the surface insofar as existing nonresidential
buildings are concerned.” He said that the Bureau is in the process of completing several reviews of existing data that “are eye-opening, to say the least.”

The NEMA Lighting Systems Index can be viewed at www.nlb.org/Index/.

Why Did You Do That, General Electric and Jeff Immelt?

Prepare yourselves, JimOnLight.com readers, I’m about to ramble.

jeff immelt GE

I just read a very disappointing article by Mike Elk at the Huffington Post.  I guess at this point in the scope of American manufacturing, money handling, crooked business practices, and corporations rear-ending the population out of everything we’ve saved in past years that I shouldn’t be surprised.

Oh, but I am.  I am surprised, and I’m starting to get a little more than frustrated with all of the lies and corporate BS.

Jeff Immelt, the CEO of General Electric, a major player in lighting and sustainable electricity generation, has been leading the charge over the last bit of time on bringing jobs to the United States and doing all kinds of butt-kicking exporting.  He even made a nice little speech a few weeks ago in Detroit.  I’ve gone ahead and highlighted some portions for you to emphasize my point:

Throughout my career, America has seen so much economic growth that it was easy to take it as a given. We prospered from the productivity of the information age. But, we started to forget the fundamentals and lost sight of the core competencies of a successful modern economy. Many bought into the idea that America could go from a technology-based, export-oriented powerhouse to a services-led, consumption-based economy – and somehow still expect to prosper.
That idea was flat wrong. And what did we get in the bargain? We’ve seen a great vanishing of wealth. Our competitive edge has slipped away, and this has hit the middle class hard.

As a nation, we’ve been consuming more than we earn, saved too little and taken on far too much debt. Growth in research and development has slowed. Our country has made too little progress on some of the defining challenges of our time – like clean energy and affordable health care. Our budget and trade deficits have reached levels that are clearly not sustainable.

While some of America’s competitors were throttling up on manufacturing and R&D, we deemphasized technology. Our economy tilted instead toward the quicker profits of financial services. While our financial services business has performed well, I can’t tell you that we were entirely free of these errors. We weren’t.

Leaders missed many opportunities to add to the capabilities of America. In 2000, the U.S. had a positive trade balance of high-tech products. By 2007, our trade deficit of the same products reached $50 billion. We have already lost our leadership in many growth industries, and other new opportunities are at risk. Trust in business is badly shaken, and it is going to take awhile to get it back.

Third: We must make a serious commitment to manufacturing and exports. This is a national imperative. We all know that the American consumer cannot lead our recovery. This economy must be driven by business investment and exports.

We should set a national goal to create high value added jobs and have manufacturing jobs be no less than 20 percent of total employment, about twice what it is today. And we should commit ourselves to compete and win with American exports.

Wow, this is really uplifting, right?  GO AMERICA!  Unfortunately, at the same time Immelt was barking at the American exporting tree, he was also canceling a large order for wind turbine parts from a company called ATI Casting Service in LaPorte, Indiana, and ordering the parts from a Chinese company for import.  Way to go, Jeff.  That doesn’t seem to me to be a good way to keep your stock price up, you know what I’m sayin’, Jeffy?

The one thing I don’t think I’ll ever understand (probably because I’ll never be obscenely rich) is how much money you have to have to be happy.  I can’t see myself being all Scrooge McDuck with a big pool of cash, but I feel like I’m the kind of person that would feed back into the growth of things like, well, my industry, for one.  I certainly wouldn’t lie about it, especially if I was the CEO of General Electric.

Just recently, this company ATI Casting made a large investment in operations to meet the demands of GE’s need.  From Mike Elk’s article:

Recently, ATI made $30 million worth of investments to buy, convert, and modernize a shuttered factory in economically ravaged Michigan so the company could provide more parts to GE as the green economy expands with federal stimulus funding. But a Chinese firm underbid ATI, and the factory faced having to lay off 302 union workers and shutter the plant.

In an aggressive bid to keep the factory open, ATI offered to match the price of the Chinese producers. GE once again said they would prefer to buy from China. The ATI plant is now closed, the jobs gone.

Oh yeah – did I mention that Jeff Immelt is on President Obama’s Economic Recovery Advisory Board?  Did I also mention that GE is bagging millions in economic stimulus money?

An article at the Detroit Bureau comments more on Immelt’s “all-go-no-quit-big-nuts” commentary on exporting:

Immelt said the only way out of the current predicament is for the U.S. to invest more in research and development. Second, the U.S. needs to address the challenge of clean energy and affordable health care and third, make a serious commitment to manufacturing and exports. Manufacturing jobs should represent 20% of the U.S. employment base not the current 10% which is shrinking.

China is pushing manufacturing, he said. “America has got to get back in the game,” said Immelt.

Immelt also said U.S. business should welcome government intervention as a catalyst for change.  “Over the last generation, America’s ‘Service strategy’ was too weak and our goals were too low,” he said.

Really.  I mean, I totally agree – but how, Jeffy My Boy, are we supposed to be exporting jobs and sinking money into American technology when you’re dumping money into China’s economy and NOT dumping it into the economy you keep preaching needs saving?  Pick one, already!

Jeffy boy, if I could offer a little advice – if you lie, you have to remember all of the parts and pieces of your story.  If you tell the truth, that’s all you have to remember.  You and Tim Geithner need to have some classes in etiquette.

Thanks to Mike Elk, Senator Sherrod Brown, Businessweek, and NPR.

GE Loses AAA Credit Rating

An article at Huffington Post announced that General Electric lost its top AAA credit rating.  GE has been struggling with credit issues for a while now, and the new AA+ credit rating (down from AAA) means it will be more expensive for GE to raise money.  From the article:

The credit rating agency lowered GE’s long-term debt ratings to ‘AA+’ from ‘AAA’ Thursday, a one notch reduction that markets had long expected. The move means it will be more expensive for GE to raise money in the credit markets.

Company shares rose $1.01, or nearly 12 percent, to $9.50 in morning trading after the announcement. Shares had lost about half their value this year, pushed down by investors frightened by the grim outlook for GE’s lending arm, GE Capital.

Many analysts had expected a much deeper ratings cut, given GE Capital’s struggles with rising loan losses and fears that it more write-downs are looming. And while GE has said defending its coveted credit rating was a priority, CEO Jeff Immelt has recently said he was prepared to fund the company at a lower level.

“I don’t believe GE is surprised to see this,” said Dilip Sarangan, an analyst with Frost & Sullivan.

GE’s capital division, if it were operating solo, would have been given a much lower “A” rating – but thankfully that’s not the case.  Jeff Immelt, GE’s CEO, said that they will be maintaining the discipline of a “AAA” rated company.

Check out the original article here.