The news hit Friday that the Federal Reserve is allowing big banks to pay sharply higher dividends. I don't understand how the Fed justified that decision. And not just because the results of the so-called "stress tests" are secret. At least our four biggest banks are insolvent, Adam Levitin explains at the blog Credit Slips. The banks' balance sheets only come out in positive territory if home equity loans made during the bubble years are valued at much closer to their face value than good accounting or even common sense would dictate
So why are the banks being allowed to give away cash to their shareholders that would be better applied to shoring up those shaky, fictional balance sheets? Yes, bigger dividends means the big executives, who are also big shareholders, get to pay themselves even more "compensation," but I'm not cynical enough to imagine that's what motivated the Fed to give the OK. So what gives?
Source: Daily Finance
Related Articles:
Why Is the Fed Letting Banks Increase Dividends?
Posted by D4L | Monday, March 28, 2011 | ArticleLinks | 0 comments »________________________________________________________________
Subscribe to:
Post Comments (Atom)
~
Popular Posts Last 30 Days
-
As a relatively new blogger, the one thing that has stood out in my mind is the number of Canadian bloggers in the areas that I am most inte...
-
We decided to go on a hunt for quality stocks that for one reason or another have been buried, and not just this year. We found three incred...
-
Essentially, we’re looking for more Apples – tech firms with a large market cap (at least $1-billion) and the financial means necessary to p...
-
Long-term investors know that dividends can have a major impact on returns over time. When the stock market is struggling to make gains like...
-
Buy and hold ... forever? It's a tall order, but a select few companies are potentially up to the task. You can build a wealth-compoundi...
-
Does the high interest rate environment we're living in have you feeling down? Here's something to remember that can help you turn t...
-
Dividend stocks can be consistent market-beaters. However, empirical research shows that the best dividend stocks tend to generate better-th...
-
High-quality dividend stocks are always worth loading up on. This is doubly true for companies that offer shareholders an attractive mix of ...
-
For this list, we looked at stocks that pay monthly dividends. Among them, we chose stocks with the highest dividend yields, which range fro...
-
Every investor wants to earn more. It is how we define "more" and how we go about earning it that defines the type of investor we ...
0 comments
Post a Comment
Post a Comment
Note: Only a member of this blog may post a comment.