Warren Buffett's $3 billion investment in GE stopped massive meltdown

at the height of the financial crisis — and the famed investor's support likely saved the industrial titan from melting down, author Bill Cohan reveals in his new book.

GE's troubles stemmed from GE Capital, its financial-services arm. The division capitalized on GE's AAA credit rating to borrow cheaply from commercial-paper markets, then lend money out at much higher interest rates. When the housing bubble burst and credit markets froze up, GE Capital faced a liquidity crunch that threatened to force it into default and bankruptcy.

GE CEO Jeff Immelt hoped to avoid that grim outcome by raising $15 billion via an equity offering, but widespread fear in markets threatened to scupper the plan. He decided to invite Buffett to be an anchor investor, a role the Berkshire Hathaway CEO had served in a"They were freaking out, because had they not got the stock issued, they were probably toast," a senior Goldman banker involved in the offering told Cohan about GE's leadership team.

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STOCK MARKET NEWS: Retail sales jump, Buffett’s Apple move, Tesla’s charging station shiftThe U.S. consumer is alive in well as spending surged in January, Warren Buffett updates Apple and Taiwan Semiconductor positions, Kraft Heinz and Cisco Systems headline earnings reports. FOX Business is providing real-time updates on the markets, commodities and all the most active stocks on the move. Treasury (in black) and long-term debt (in gray) de Capital Cities/ ABC.
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