GE chief warns on US depression threat

Francesco Guerrera and Justin Baer
Financial Times
Friday, Feb 6, 2009

The US economy is suffering its steepest downturn since at least the 1970s and could descend into a depression, Jeff Immelt, General Electric’s chief executive, warned on Thursday.

He said businesses and consumers alike were struggling to contend with tumultuous markets and a financial-services industry under siege.

“Unlike the other downturns that I’ve been a part of, this one is faced with limited liquidity,” Mr Immelt, GE’s chief since 2001 told a conference. “Once you break through ’74-’75, you don’t stop ’til you get to 1929.”

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When asked whether he would call the current slowdown a recession or a depression, Mr Immelt joked that he would need to refer to his college economics text book for a precise answer but said “it is one of those”.

He contended that governments were “firing as many bullets” as they could to stimulate economic growth and stabilise the credit markets. Those measures, he said, should begin to take hold by early next year.

“Governments are all in,” he said. “And in my view, government always wins.”

Full article here