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Bank Dividends Are a Sham and a Con

After taking 3 of 4 days off between March 10 and March 15 the Fed resumed daily pumping last week, and is scheduled to continue pumping about $25 billion a week into the market through April 11. Along with that the market will be getting the benefit of $25 billion a week in Supplementary Financing Program Cash Management Bill paydowns through March 24. Another plus appears to be a seasonal upsurge in bank purchases of Treasuries. All of this comes when Treasury supply will be light. No new supply will settle until the end of the month.

But there are problems inherent in the timing of all this. And data on the condition of banks suggests that the too big to fails are losing money again. The Fed’s decision to allow the resumption of dividends is a scam on the public.

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Lee Adler

I’ve been publishing The Wall Street Examiner and its predecessor since October 2000. I also publish LiquidityTrader.com, and was lead analyst for Sure Money Investor, of blessed memory. I developed David Stockman's Contra Corner for Mr. Stockman. I’ve had a wide variety of finance related jobs since 1972, including a stint on Wall Street in both sales, analytical, and trading capacities. Prior to starting the Wall Street Examiner I was a commercial real estate appraiser in Florida for 15 years. I was considered an expert in the analysis of failed properties that ended up in the hands of bank REO divisions, the FDIC, and the RTC. Remember those guys? I also worked in the residential mortgage and real estate businesses in parts of the 1970s and 80s. I have been charting stocks and markets and doing analytical work since I was a teenager. I'm not some Ivory Tower academic, Wall Street guy. My perspective comes from having my boots on the ground and in the trenches, as a real estate broker, mortgage broker, trader, account rep, and analyst. I've watched most of the games these Wall Street wiseguys play from right up close. I know the drill from my 55 years of paying attention. And I'm happy to share that experience with you, right here. 

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