STOCK DIVIDENDS OR NOTHING
GE in the news today. They will keep paying out circa $12 billion in dividends each year, if they have their way (at a $1.24/share).
$12 billion in hard cash.
Meanwhile, they are firing employees, using the Fed's facilities to keep themselves floating, and trying to right-size their balance sheet (like a lot of other people).
So, I propose a new rule: You go to the government, including the lender of last resort, and you either, (a) stop paying dividends unless you get a "special dispensation" or continue at a token rate or, (b) you pay stock dividends until the "crisis" is over.
more
[If you want dividends, buy a utility!]
p.s. no share repurchases, either, except for shares issued pursuant to option awards to non-contract employees of the firm
Tuesday, December 2, 2008
New Rule: No "Lender of Last Resort" for Dividend Payments
