Welch Says U.S. Economy to Improve in 2009 After `Tough Times'
Former General Electric Co. Chief Executive Officer Jack Welch said the U.S. economy will start to improve in late 2009 after struggling for the next three quarters.
“We are going to have some very tough times,'' Welch said on the ABC News “This Week'' program. “The fourth quarter of this year could have negative growth in the three to four percent range.''
The Standard & Poor's 500 Index is heading for its steepest monthly decline since 1938 on concern the global economy will slide into a recession. In the U.S., the collapse of the subprime-mortgage market and a freeze in lending has already triggered the failure of Lehman Brothers Holdings Inc. and government takeovers of Fannie Mae and Freddie Mac.
Welch said “oh my God, no'' when asked whether Fairfield, Connecticut-based GE was at risk of failing internet pay day loan.
“It just happens to have a financial component,'' he said. “Anything with the word finance in it right now is part of this fear element'' taking hold in equity markets.
GE, whose businesses include jet engines, health care and the NBC television network, has fallen 52 percent this year to $17.83 in New York Stock Exchange composite trading.
Welch, 72, said prospects for the company and the economy will improve once markets start to absorb the effects of the $700 billion rescue package approved by Congress this month. He predicted U.S. financial markets will have a “better foundation'' because companies and consumers will cut back on debt and lawmakers will improve regulation.
Filed under: business by Finance Boss