Biggest Dividend Cuts in 1/2 Century

Wednesday, October 22, 2008 | 06:56 AM

No surprise here:

"Dividend payments by companies in the Standard & Poor's 500 Index may plunge 10 percent this quarter, the biggest decline since 1958, as bank failures and slowing economic growth stifle payouts, S&P said.

The firm also cut its estimated 2008 dividend from all S&P 500 companies to $28.05 from $28.85, representing the slowest annual growth since 2001, according to a statement. Financial companies in the index reduced their payouts 35 times in 2008, almost triple the past five years combined, said Howard Silverblatt, the senior index analyst at S&P."

For the banks, this is a good thing, They need to hoard their capital, and stop sending $30-40 billion a year off their books.

For everyone else, its a sign of financial distress, and a protracted recession. And it points out how dangerous it is to buy something merely due to a high dividend.




>

Source:
S&P 500 Dividends to Fall Most Since '58 This Quarter, S&P Says
Lynn Thomasson
Bloomberg, Oct. 21 2008
http://www.bloomberg.com/apps/news?pid=20601213&sid=aar.N5PyekYo&

Wednesday, October 22, 2008 | 06:56 AM | Permalink | Comments (19) | TrackBack (0)
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Comments

I have always been open minded about chart interpretation but I swear if anyone came to me now saying this looks like a buy here I would throw them off my desk. Below all mvg avgs, all pointing down, downside pennant forming. I think all you guys saw the downside (some saw it since the market was below 5,000 of course) and are all now calling long because you all want to be the first to say you saw the bottom!!!!!!!!!
NEVER COUNTER TREND TRADE A HIGH VOL MKT!!!!!!
Even if you are right it is just going to get you hurt down the road by reinforcing a bad habit.

Posted by: derivs | Oct 22, 2008 7:13:17 AM

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