If you want to know why the market went to hell in a handbasket so quickly, check this out:
Standard & Poor’s Ratings Service took the first step toward potentially lowering its AAA credit ratings on General Electric Co. because of concerns about funding at its capital unit.
Credit analyst Robert Schulz warned earnings and cash flow at GE Capital could decline enough over the next two years to warrant a downgrade, and revised the company’s ratings outlook to negative from stable. However, the agency added GE’s recent financial policy actions have been consistent with what it would expect of a company with the highest credit quality.
GE shares recently slid 8% in recent trading on heavy volume.
GE spokesman Russell Wilkerson said the company considers its credit rating safe if it simply delivers on its financial plan, adding a ratings cut will come “only if we fail to achieve our objectives.”