What happened to GE, formerly one of top companies in US, what Jack Welch has wrought?

Every generation needs a revolution - an entrepreneurial revolution

GE used to be darling of Wall St.   It was tops of the top 20 companies 20 years ago.

What caused its decline:

1.  Investing too much in non core business:   lending, health care.  The GE capital was badly hurt by 2008 crisis.   They had to be bailed out to the tune of $100 billion   It stood against the management principle of focus, on core business.  What was GEs core business:    Jet Engines, power generation.   They could have been growth more.  The acquistions distracted them from core businesses

2.  They engaged in too much acquisition .  However they financed this by cutting off employee payroll.

They destroyed their human capital.  The staff worried too much in being laid off.

Jack Welch was an idol before in management.  It seems it was a misplaced adulation.  

 

The bail out of SVB could have been avoided - Sen John Kennedy

Every generation needs a revolution - an entrepreneurial revolution

Sen Kennedy takes down Pres Biden for SVB bail out

In a speech before his colleagues, Sen John Kennedy Sen John Kennedy said that the bail outs of the three banks in US could have been avoided if any of the three things were done:

1   The investment strategy of SVB to invest in high yielding but interest rate sensitive bonds was non

banking 101;

2.  The regulators had regular reports from the bank but failed to note the red flag and take proactive steps to prevent a bank run

3.  SVB was an illiquid bank but a solvent one, but merely was unable to provide liquidity to those withdrawing because  of parked funds at the bonds;   the regulators could have by phone arranged for a buyer on Friday or Saturday so that a bail out was unnecessary (as what CSB did)   But they did not.

Sen Kennedy decried the presence of underserving in the nation:

The large corporations get bail out

The masses get hand outs;

The middle class, the taxpayers get billed out