I really need a job where I can claim to be something and then not take the time to actually learn the terminology or underpinnings of the actual work…and succeed! But maybe it’s the honest Eagle Scout in me that I took the other road and I do work in an industry where I can actually speak intelligently unlike Congressman Brad Sherman (D-CA). The following appears on Rep. Sherman’s website:
Most testified that their firms would continue to pay dividends to common shareholders, rather than use available capital to repay the federal government. The exceptions were Bank of America, Citigroup, and State Street Corporation.Now, I’m in the computer business and only mildly involved in the financial side of the house but let’s examine that statement for a moment. Dividends are paid using retained earnings – for those from “the Valley” (Mr. Sherman), that means that it comes from monies earned in previous years. For example, if I made a profit last year and lost money this year and decided to pay a dividend this year, that money would come from my previous year’s earnings. Bank of America, as mentioned above, is sitting on roughly $70B of earnings that could be applied to this (and other) fiscal activity. The fact that BoA isn’t paying a dividend this year, is likely an image marketing move in these trying times and not one of preserving TARP money. Please to be noting that Rep. Sherman should know this. He’s an expert on the House Financial Oversight Committee and has been conferred with multiple degrees showing that he’s at the top of his classes. So this is either really scary or really political. Given the backlash that is starting over the Giant Technicolor Stimulus Bill, maybe some of these companies will start pushing back on Congress during these Kangaroo Court sessions.