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Wednesday, October 1, 2008

Why come to me? What have I done to deserve such generosity?

General Electric has a triple A credit rating. They're borrowing money from the Central Bank of Omaha at a 10% interest rate and potentially selling a big piece of the company to Buffett. Goldman Sachs pulled a similar maneuver a couple of weeks ago and it stemmed the slide in their stock for about 24 hours. These are some of the largest and theoretically most stable financial institutions in the country. Do they need the cash that badly? Is Warren Buffett the new Federal Reserve?

I know this move is supposed to make me think General Electric is sound and credit-worthy but in fact, it's kind of making me think the opposite. It seems like a very bad sign.

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