GE downgraded

By Megan McArdle

This morning, the giant conglomerate exited the now-even-more-select ranks of companies with a AAA bond rating.   S&P announced that is was downgrading the company's debt to AA+, with a note that it mostly meant you should start worrying about GE's long-term debt . . . though not worrying very hard.

What happened next was surprising, in a "What the goddamned $@%! hell just happened?" sort of way:  the stock price rose 8%.  This is about 1600 basis points more than you would expect.  The market had clearly already priced in the risk of a downgrade, and Immelt's statement that the company was prepared to operate as a AA+ company sounded soothing even to me.

This article available online at:

http://www.theatlantic.com/business/archive/2009/03/ge-downgraded/1459/