Giant One-Armed Crocodile - Brutus

Second, there seem to be lots of buyers sniffing around, thanks to bubbly financial markets. The average yield on GE’s loans is 7% and in a world in which yields on most assets are at rock bottom, they are enticing. The owners best suited to GE’s assets would be entities that are exempt from the capital surcharges now imposed on big banks—either because they are not banks or are foreign. And they would have a cheap and safe source of funding, either because they have access to deposits or long-term equity. GE says it has had expressions of interest from hedge funds, sovereign-wealth funds, foreign banks and fund managers, all of whom fit the bill. Having helped save GE’s finance arm during the financial crisis, the Federal Reserve is now the main obstacle for Mr Immelt’s plan. It could object to certain buyers—either because they are too-big-to-fail banks or because, like GE today, they rely on risky wholesale borrowing. The Fed could also tighten monetary policy more quickly than expected, causing a bond-market rout and confidence to evaporate.

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