a big profit selling well designed and well engineered goods to the rest of the world. (And no, I ain't holding my breath.)

^{"All men's gains are the fruit of venturing."}

-Herodotus

Green energy. Better solr cells & better distribution of the energy grid. Also, the ability to build long-distance power lines that don't turn into power antennae during solar storms. Those High-Voltage power lines? They'll blow up a power plant during a major solar storm.

Green buildings. For example, white paint that sticks to walls and roofs. Clearly, this is patentable.

"Turning Japanese I think I'm Turning Japanese I really think so da-da-da det det det det" - The Vapors

GE's second quarter profits were down 49%. Historically, the small business I work for has about 15-17% GPM. History is not repeating itself...not this year.

Distrust anyone who wants to teach you something.

GE's historical return on revenue is not only an anomaly, it is the result of trading not terribly different from what Goldman Sachs does. Only GE traded corporations. Jack Welch gussied it all up as a passion for being 1, 2, or 3 in your industry, but the reality was he was quite willing to sell a business tops in its industry, if he thought the industry was at its peak. In any one quarter he had as many as a dozen companies bought or sold. Bearing in mind that his traditional businesses like light bulbs and washing machines were long since past their ability to generate 20% returns no matter how good they were, Welch needed something else to push up his rate of return. Hence the sometimes frenzied buying and selling of subsidiaries. This gave him two advantages: 1) the ability to goose up returns, and 2) the ability to "manage" earnings so he would always come a penny or two above analyst estimates, which he massaged as well with gentle hints as the quarter progressed.

The Cult of Welch as a brilliant manager grew up around him, with his active connivance. He was a brilliant trader, in a 25 year bull market with the wind at his back, very much like Peter Lynch at Fidelity Investments. Only unlike Lynch, Welch never recognized nor admitted that it was the greatest bull market in 150 years that made him such a success. He was certainly not a brilliant manager nor a creator of businesses in the sense of innovating new products like Steve Jobs.

The other thing he rode very well in the bull market was the finance explosion, through GE Capital, which like Goldman Sachs or AIG had all the benefits of a bank without any of the regulatory burdens. It also had GE's AAA rating (now lost), which gave it a lower cost of funding than any big competitor. As the 90s progressed, GE Capital came to dominate GE's earnings results, and its flexible reserve accounting practices gave Welch yet another piggy bank to use to manage earnings.

He timed his exit very well, at the peak of the bull market. Had he stayed on, his reputation would have been badly tarnished like Alan Greenspan's, because the game was up and GE can no longer buy and sell companies like they are pork bellies, and the finance division has been shown to have even worse credit judgment than Citigroup. Almost instantly after his departure, GE began to founder.

I will give Jack Welch credit for creating a trading machine of considerable effectiveness, able to exploit in particular the growth market in finance. He deserves credit for some brilliance at buying and selling companies, rather like Harold Geneen at ITT in the 1960s. For the rest of it, though, he was a flim-flam artist, strutting around like some business genius with a coterie of fawning consultants behind him selling him the latest pop theory on how to think outside some illusory box.

Companies that historically make 20% returns on equity do not do so by selling products and services, and certainly not through ordinary banking. Something else is going on, occasionally having to do with a temporary bull market, but often involving undue risk combined with accounting trickery. GE was no exception.

a place where money laundering etc is protected.

Like in the USA? LOL

The main job of SEC is to take care that only the right people can do financial crimes in the USA. That's why they protected Madoff. Occasionally they have to do some PR show business called "catching criminals". Basically it is a US government established crime organization.

_{--Sell Texas to China!}

I bet $100 that some of those pallets of US money destined for Iraq made it as far as Switzerland. I'll pay to anyone who can prove all the money got to Iraq.