General Electric now appears to be in the middle stages of a death spiral. While the stock still has an equity value over $100 billion, the entire company is in the middle of a precipitous decline which seems to move to more serious levels in stages.
John Flannery, the current CEO, is doing his best to address layers and layers of debt at GE Capital that were moved off the balance sheet through legal structures (unlike Worldcom and Enron) in the 1990s. Wall Street analysts may or may not have come close to estimating the full obligations here, or the burden of pension obligations. I think that if Flannery is able to salvage anything for the shareholders, he should be inducted into the CEO hall of fame (but, I wouldn’t make that bet, I would sell my GE stock if I had any).
This site, BestCashCow, specializes in providing the public with the best savings and CD rates. Years ago, the best online rates were offered by two institutions that were both operated by GE Capital – GE Capital Bank and GE Capital Retail Bank. I’ve learned that some people have a way of setting and forgetting their savings and CD products, and some of these people have gotten nervous and reached out to the site.
Were GE Capital and GE Capital Retail Bank still under their original ownership, depositors would be protected to the maximum insured value provided by the FDIC.
However, these banks aren’t under their original ownership.
GE Capital Bank was sold to Goldman Sachs three years ago. The bank remains under Goldman Sachs’s ownership and has been rebranded as Marcus. We believe that Goldman Sachs is one of the most sound financial institutions in the country, and Marcus offers a series of savings and CD products where we would actually feel comfortable depositing and holding amounts over FDIC limits.
Editor’s Note: Marcus by Goldman Sachs is an advertiser on this site. Please see our advertiser disclosure here.
GE Capital Retail Bank was rebranded as Synchrony Bank in early 2014 and then it sold 15% of the company in an IPO in July of that year. In November 2015, GE relinquished all control of the remaining 85% of Synchrony through an asset exchange agreement with its shareholders (see the announcement here. As a result, Synchrony today is an entirely independent company that has been free of GE and its problems for over three years.
Editor’s Note: Synchrony Bank is an advertiser on this site. Please see our advertiser disclosure here.
Importantly, therefore, depositors who initially opened accounts at GE Capital Bank and GE Capital Retail Bank can rest assured today that their deposits are safe from GE’s possible death spiral.
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