Penn Wealth Publishing

2018.03.25 Penn Wealth Report Vol 6 Issue 01

Issue link: https://hub.pennwealth.com/i/958170

Contents of this Issue

Navigation

Page 18 of 29

25 Mar 2018 Penn Wealth rePort voluMe 6 issue 01 19 Penn Wealth RePoRt Copyright 2018. All Rights Reserved. Weekly business rePort Weekly business rePort —John Milton venezuela's one saving graCe, oil ProduC- tion, falls to a 28-year loW Looking at the failed socialist state that is Venezuela, if you had to pick one probable life- line for that country what would it be? Most people would answer "oil revenues" without giv- ing it much thought. After all, what is the country selling the rest of the world besides crude? (In fact, 95% of export revenues come from crude.) Incredibly, and incredibly depressing for the poor souls living under the iron socialist fist of the simpleton Nicolas Maduro, the country's one trump card is collapsing at a stunning rate. Oil production fell 11% in the one-month period between November and December alone. For all of 2017, production is down by nearly one- third—to 1.6 million barrels per day. To put that in perspective, US crude production currently sits at around 10 million barrels per day. Venezuela's state-run oil company blames "sabotage and terrorism" for the steep output decline, yet offers no proof. In reality, complete mismanagement and a government structure in total chaos is the cause. There will be national elections held in Venezuela later this year. After some degree of literal national starvation, the Venezuelan peo- ple must take charge and force Maduro and his socialist ilk from power. Sadly, there is zero chance he would let that happen through an election which he ultimately controls. ge announCed a $6.2 billion insuranCe Write-off, then droPPed the boMb Why an industrial conglomerate got into the insurance business in the first place belies logic; it is reminiscent of defunct Enron get- ting into industries which had nothing to do with energy, just before its massive implosion. Nonetheless, General Electric (GE $17-$18-$31) did, and is now paying the price. The company announced it would eat an $11 billion charge in the fourth-quarter, $6.2 billion of which from a reevaluation of its long-term care insurance busi- ness. That news was enough to make their stock drop about 3%, but the real news came when CEO John Flannery made it clear the company would be broken up soon. What would that look like? More than likely, a breakup means three separately-traded stocks for GE's three main business lines: power, avi- ation, and healthcare. The breakup would also mean the company would divest itself of other units, such as GE Capital, oil & gas, and lighting. Shedding the extraneous business lines makes sense, but GE will never again be the giant it once was. It didn't need to be this way. More evidence of the critical importance of strong leadership. Quotes of the Week "The mind is of its own place and in itself, can make a Heaven of Hell, a Hell of Heaven." "I dream of painting and then I paint my dream." —Vincent van Gogh "I like work; it fascinates me. I can sit and stare at it for hours" —Jerome K. Jerome latin aMeriCa Humor Passion Perspective industrial CongloMerates

Articles in this issue

Archives of this issue

view archives of Penn Wealth Publishing - 2018.03.25 Penn Wealth Report Vol 6 Issue 01