GE Phase 3 Results Flutemetamol (18F)

GE Healthcare today announced pooled results from phase III brain autopsy and biopsy studies on the investigational PET amyloid imaging agent, [18F]Flutemetamol

All American Investor

GE Healthcare today announced pooled results from phase III brain autopsy and biopsy studies on the investigational PET amyloid imaging agent, [18F]flutemetamol, which showed a strong concordance between [18F]flutemetamol images and Alzheimer’s disease-associated beta amyloid brain pathology.

[18F]Flutemetamol is a PET imaging agent being developed by GE Healthcare for the detection of beta amyloid deposits in the brain. The data from the phase III studies further confirm the potential application of [18F]flutemetamol as an imaging agent to detect beta amyloid plaques.

The data was presented at the 16th Congress of the European Federation of Neurological Societies (EFNS) in Stockholm, Sweden, and provide support for an application for regulatory approval of [18F]flutemetamol, which is intended to be filed in the US and EU later this year.

General Electric (GE) dowgrade, My Rant

While this is no surprise, Standard & Poor’s stripped General Electric of its historic triple-A rating. GE is now rated AA+.

This comes as no surprise to me. GE used to make great stuff. Believe it or not, I just replaced a General Electric air conditioner that was 33 years old. You read that right--33. It never stops startling me that in 1976 General Electric made a product that is revered in the air conditioning industry. I was amazed when our air conditioning guy told me that there are plenty of these machines still running. GE, now, is just about as ordinary as any old financial services company. Kinda sad, if you ask me.

You might be thinking what is my point? No, its not about the fact the General Electric no longer makes air conditioners that run for a half lifetime. This is really about how we now make crap in this country, or buy crap, from other countries all in the name of economic progress.

Here is a myth that gets perpetrated all the time by our elected officials and economist. If we don't keep the economy growing year after year, our growing population will end up eating rocks. Bull. Answer this for me, if we had been growing slowly but surely over the last decade would be better or worse off? One thing for sure, we are doing a great job of raising the standard of living of the populace in China. Kinda like what happened to my dad--the guy who worked in a factory for 35 years.

If we were still making great products like the GE air conditioner I referred to--we would be adding more to the economy not less. Instead of shelling out $3,000 every seven years for an air conditioner you might be doing something really productive with the money. Maybe sending your kid to college--an investment in the future. Or maybe, paying off your credit card debt--an investment in the future.

Well like it or not, we will are in the process of getting back to what is really important. No more $100 million dollar bonuses--just the old fashioned kind--mill and a half.

In other words, companies will be able to provide health insurance for their employees. We will all feel better about ourselves, and our little slice of the world will be a better place.

I understand this is a rant--but it felt good saying it. Go ahead, sound off.

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Bob DeMarco is a citizen journalist and twenty year Wall Street veteran. Bob has written more than 500 articles with more than 11,000 links to his work on the Internet. Content from All American Investor has been syndicated on Reuters, the Wall Street Journal, Fox News, Pluck, Blog Critics, and a growing list of newspaper websites. Bob is actively seeking syndication and writing assignments.

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Bold Endeavors: How Our Government Built America, and Why It Must Rebuild Now

Fears of systemic risk rising

I defined systemic risk in a previous article--Systemic risk defined--Too Big to Fail. Fears of systemic risk are rising and this is being evidenced in the widening of interest rate spreads for credit default swaps (CDS). The credit default swaps on the venerable Berkshire Hathaway widened to more than 500 basis points this week. This, a clear sign that the market is worried about mounting losses at the company headed by Warren Buffett. Spreads in the CDS market are rising across the board. Investment grade spreads are now out to the 200 basis point area. In the junk area spreads have widened to more than 1100 basis points.

The jitters in the market continue to spread. Much of the focus this morning is on GE, GM, and HSBC.

My guess is that GM is nearing bankruptcy, an event that would lead to a market capitulation in stocks.

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Bob DeMarco is a citizen journalist, blogger, and Caregiver. In addition to being an experienced writer he taught at the University of Georgia , was an Associate Director and Limited Partner at Bear Stearns, was CEO of IP Group, and is a mentor. Bob currently resides in Delray Beach, FL where he cares for his mother, Dorothy, who suffers from Alzheimer's disease. Bob has written more than 500 articles with more than 11,000 links to his work on the Internet. His content has been syndicated on Reuters, the Wall Street Journal, Fox News, Pluck, Blog Critics, and a growing list of newspaper websites. Bob is actively seeking syndication and writing assignments.

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Will the Commercial Paper Market get Tested on Friday?

The Fed launched the Commercial Paper Funding Facility on Oct. 27 to buy short-term debt directly from companies amid the credit market's seizure. Now, the Fed holds about $350 billion of commercial paper in the facility. That is close to 21% of the $1.7 trillion market. About $230 billion of this debt is set to mature by Friday.

The question: Will companies like General Electric or GMAC, which issue this short-term debt to pay their bills and meet other near-term obligations, return to the open market rather than roll over their debt with the central bank.

With the market looking on two additional question will be answered:

• Is the open market capable and willing to fund these companies?
• If they return to the open market what will be the cost of funding their obligations?
  

This could result in an interesting test of the commercial paper market. It will also be an interesting test of the bailout. A good result might help stabilize the stock market. A bad result? We shall see.

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Fed Program That Calmed Debt Market Faces a Test

By LIZ RAPPAPORT

This week brings one of the first tests of success for a key Federal Reserve program that has calmed the short-term credit markets.

About $230 billion of three-month debt that the Fed owns, in the form of commercial paper, is set to mature by Friday.

The questions are: Will companies like General Electric or GMAC, which issue this short-term debt to pay their bills and meet other near-term obligations, return to the open market rather than roll over their debt with the central bank, which costs a lot more? Can the still-fragile market absorb so much three-month debt in a single week without sending interest rates much higher? And is the Fed winding down this key program?

The Fed launched the Commercial Paper Funding Facility on Oct. 27 to buy short-term debt directly from companies amid the credit market's seizure, following Lehman Brothers' collapse.

At the time, money-market funds, which are the main buyers of this debt, were hoarding cash to meet redemptions and companies couldn't obtain loans for much more than 24 hours, and at rates as high as 7% or more.

GMAC says it is evaluating all of its funding options, while General Electric Chief Executive Jeffrey Immelt said last week the firm was cutting back its reliance on the commercial-paper market.

As of this past Thursday, the Fed held $350 billion of paper in the facility. That is close to 21% of the $1.7 trillion market.

"Unwinding the Fed's programs is meant to be a natural process, and this is an early test of that," said Lou Crandall, chief economist at Wrightson ICAP.

Some analysts predict the Fed may see its CP purchases cut by half as issuers work their way back into the open market.

It is unlikely all the issuers will roll over their debt for three months as some choose to sell at shorter maturities, of one or two months. Others, like banks, may entirely buy back their debt using cash they have obtained by borrowing at lower rates, using debt guaranteed by the Federal Deposit Insurance Corp. Thursday evening the Fed will report its holdings for the prior week.

Certainly, the CPFF program, along with several others, has helped smooth the problems in the short-term credit markets.

Money-market funds have been buying higher-yielding assets rather than just the safest short-term Treasury bills, which yielded them 0% for several weeks. Investors have moved into "prime" money-market funds, which buy higher-yielding assets. Money-fund managers no longer fear the possibility of "breaking the buck," or having the value of each share fall below $1, given the myriad government programs that ensure liquidity to meet any surge in redemptions.

Commercial-paper rates have also fallen to the point where borrowing from the Fed has become less appealing because it costs more than the open market does -- a phenomenon the Fed engineered. In the open market, companies can issue three-month debt at rates around 1% or less, where the Fed's rates are 1.24% for unsecured commercial paper or 3.24% for paper backed by assets' cash flows.

The Commercial Paper Funding Facility isn't scheduled to expire until the end of April, but as Federal Reserve Chairman Ben Bernanke explained in a Jan. 13 speech in London, "unwinding will happen automatically, as improvements in credit markets should reduce the need to use Fed facilities."

The Fed's balance sheet has already shrunk since the start of the year, from $2.26 trillion on Dec. 31 to $2.04 billion as of last Thursday. That said, it's still massively oversized from under $900 billion prior to Lehman's bankruptcy filing last September.

About $60 billion of the shrinkage came from allowing an older, now unnecessary, liquidity facility to expire. About $135 billion is due to a decline in short-term lending facilities, which were heavily used by banks and other financial institutions to get through year-end funding pressures, according to Fed data.

The remainder was due to modest ups and downs in a variety of facilities, and some currency valuation adjustments.

Write to Liz Rappaport at liz.rappaport@wsj.com