MORE TROUBLE FOR BUSH-PAULSON, KNEE-JERK "PLAN"
As the major banks cry they need a bailout and liquidity and tighten credit, take a scan of how much they are paying out in dividends.
Their stock price is over a cliff, presumably linked to distressed asset worries, and yet, as late as June of this year, they paid out over a billion dollars in dividends.
Did you know that Morgan Stanley is paying out just about as much as they were last year at this time (and the two years before that, as well)?
So how do you come begging for money from the Federal Reserve, the Treasury, and everyone else, when you are paying it out, willingly, instead of trying to rebuild your capital base with it?
Have a look at Wachovia. They seem to be among the worst (n.b. based on just a scan, not a comprehensive rank-listing). Their stock price is over a cliff, presumably linked to distressed asset worries, and yet, as late as June of this year, they paid out over a billion dollars in dividends.
Bank of America appears to have actually raised the amount of dividends it is paying for 2008, with over $6 billion paid already...
Why aren't they desperately preserving / building capital?
Why didn't Bush-Paulson call on them to be Patriotic, eh?
