GE's really big miss - a really big surprise?

GE 1Q08 results missed and the shares dropped 13%, for the biggest fall since the October '87 Crash, leading the markets sharply lower. Etc etc. Etc.

• First of all, this is not Jack Welch's GE... it may be bigger, but it's really not the same.
  
• Secondly, 40% of 1Q07's "segment profits" (basically operating level ex-central overheads, as I understand it) came from the finance arms (commercial and consumer) with another 10% from the floundering healthcare business.
• Thirdly, in the month to last Thursday, from the recent low, GE was up 16% vs +6.8% for the S&P500. (After Friday's collapse, GE is still up 1.1% from the low, with the S&P500 up 4.7%.)

So where was the massive shock to the system? Half the earnings had been from financials and an under-performing business - and those were the areas that missed most severely.

So what did we learn about the economy and business environment from that? That financials have been having a hard time in recent months?

And the mid-March guidance from not-Jack came, to be fair, came just prior to Bear's going belly-up and all the turmoil surrounding it. Soooo... GE blew off a short period of Welch-era outperformance based on fantasies of "defensiveness" (40% financials?) and overseas earnings (true enough, but infrastructure's not all GE does) over the last month... and...?

What may be most telling is the volume traded not in GE (massive) but in the S&P500 names... for a 2% selloff in the market, we didn't see any significant pickup in volumes... in fact, marginally down from the day before.

So Asia is bound to trade weaker, but I think the bear rally should still be intact... for a little longer.