Ex-GE CEO Jack Welch predicts ‘real tough times’ for U.S.
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Former General Electric Co. CEO Jack Welch warned today that the U.S. economy was in for ‘one hell of a deep downturn’ because of the credit crisis.
From Reuters:
‘I now believe we are in for one hell of a deep downturn,’ Welch told the World Business Forum in New York on Wednesday, adding that the first quarter of 2009 will likely be ‘brutal.’ Until recently, Welch said, he had believed the U.S. economy could avoid recession, but he has changed his mind. ‘I am now caving,’ he said. ‘Get ready for real tough times. They’re coming. There is no credit available.’ Welch, 72, said mortgage lenders, legislators, investment bankers and others are all to blame for the crisis, which stemmed from easy credit and investors’ appetite for yield. ‘The problem was money didn’t cost anything,’ Welch said. ‘People took swings.’
Yes, including people at GE -- which owned subprime mortgage lender WMC Mortgage from 2004 to 2007.
That was on current CEO Jeffrey Immelt’s watch. But it was Welch, who led GE from 1981 to 2001, who built up GE Capital, the company’s huge financial services business. Last year that unit accounted for half of GE’s total operating earnings.
If it was a debt bubble that got us to this sorry state, you can bet that GE Capital played a big role in helping to finance it.
Just sayin’, Jack . . .