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:
Dividend Growth Stocks News
- 10 Dividend Stocks Poised to Outperform - Barron's - 7/31/2025
- 3 Top Dividend Stocks to Maximize Your Retirement Income - Yahoo Finance - 7/31/2025
- 4 High-Yield Dividend Giants Demolished Analysts' Q2 Earnings Expectations - 24/7 Wall St. - 7/31/2025
- 3 Dividend Stocks To Consider With Yields Up To 4% - Yahoo Finance - 7/28/2025
- The Silver Dividend: Investing in Aging Populations for Long-Term Growth - AInvest - 7/31/2025
- Raytheon Technologies Corporation (RTX) Dividend Stock Analysis - 7/31/2025
- Duke Energy (DUK) Dividend Stock Analysis - 7/25/2025
- Chevron Corporation (CVX) Dividend Stock Analysis - 7/18/2025
- Emerson Electric Co. (EMR) Dividend Stock Analysis - 7/11/2025
- Amgen, Inc. (AMGN) Dividend Stock Analysis - 6/27/2025
Why Is the Fed Letting Banks Increase Dividends?
Posted by D4L | Monday, March 28, 2011 | ArticleLinks | 0 comments »________________________________________________________________
Subscribe to:
Post Comments (Atom)
0 comments
Post a Comment
Post a Comment
Note: Only a member of this blog may post a comment.