Harry Markopolos, the man who kept telling us that Madoff was running a Ponzie scheme, believes that GE’s financial picture is worse than its financial statements depict, The exposure for the company is in its insurance reserves for long-term care policies its has issued. Markopolos says that the company will need ti add $18.5 billion to meet those reserve demands.
GE has dismissed the Markopolos reports, stating that its financial picture is healthy and its financial statements accurate. However, the SEC and Justice Department are currently examining GE’s accounting for who knows?
For those of us who have followed GE for some time, the thought has occurred to us, since the days of Jack Welch, that the financial side of GE (GE Capital and the insurer) may have been the engine of GE, not the engines themselves, or the appliances, or the plastic. Also, browse through this blog for the antics of Jeff Immelt with the two private jets everywhere he traveled and the lack of candor in disclosures about CEO perks and packages. Now with GE’ss financial side either no more or struggling to keep up with promises loftier than premiums, well, the Markopolos analysis can hardly be a surprise.