The GE name is up for sale, at least in one of its oldest businesses, the appliance manufacturing business.  GE entered the appliance world in 1907, now 101 years later its looking to auction it off to the highest bidder.  Investors should begin to wonder if this spinoff is directly correlated to its losses with the GE Money bank with is drowning in subprime exposure and is systematically writing down bad debt.

The fact that GE has to even look to sell its appliance business, for whatever reason is a bit alarming.  Though no reason has or probably will ever be stated, GE is looking for $5 to $6 Billion in cash at the auction block to dump what is both an extremely profitable business, and something that has been around for a very long time.  Its refrigerators, stoves, dishwashers down to electric mixers make up a very well known brand.  Surely the buyer is getting a great deal for a company that literally “makes it all.”

General Electric is likely preparing for more writedowns.  This sell off will net the company plenty of instant cash to cover any future writedowns and keep earnings up to a sustainable level.  Keeping shareholders and investors happy is extremely important for GE which has much to lose from its own credit market investments and its bond rating.  If earnings turn sour, one of the world’s largest and longest running corporations will grind to a standstill.

The sale of its appliance business will likely cut heavily into future revenue.  There isn’t much reason to believe that GE has the possibility to create any possible returns from the lump sum of cash, nor does it need to sell units for financing.  There is plenty of available credit to GE which leaves me to believe that the company is preparing for a heavy loss.

No investment here, GE looks worse and worse.  Though it was originally recommended a buy, this selling of assets looks less than appealing for the investor.  Hold out to see what quarterly earnings bring.

Nothing could have possibly stunned the street any more than a call by Goldman Sachs for $150 to $200 a barrel oil within the next two years.  The bank suggested that strong demand and weakening supplies would be reason enough to send prices upward, no doubt about that.

The problem with high oil prices is that it will affect US businesses more than other countries.  Since 2003, the US dollar has lost 50% of its value against the Euro.  Even with rising oil prices in dollars, the rest of the world is still able to buy cheap oil, largely because of a cheap dollar.  This increases the price for oil in dollars but for the rest of the world, particularly the Eurozone, prices stay moderate.  What is $120 in USD is 80 Euros, not much of a change from a few years ago.

Wall Street was a bit uneasy about the $200 prediction but was very quick to waive it off.  The Dow started in the red early but rose to close up 50 points.  While the market was unaffected by oil prices today, the premise of $200 should start frightening some investors.

Automakers and airlines have the most to lose or gain from oil prices.   GM and Ford, two struggling US automakers, have been losing more money on their top lines because of MPG ratings.  Gm once had a very profitable SUV wing that has since fell to the wayside as oil prices rose.  Airlines have it equally tough, the passenger airline business has very few opportunities to profit.  Small profit margins and greater expenses due to security measures make the cost of oil very important.  Though some airlines remained hedged, the price of oil will eventually come to terms with the profitability of the airline sector.

Now that a new bar has been set, look for traders to complete it.  Though oil seems to be stuck at $120 in recent weeks, a tightening supply this fall might push oil prices even higher.  Last hurricane season sent oil prices sky-high as refineries were taken off the pipes and shipments slowed.