FromTheSouth
You don't want it with me.
The federal government has now ordered Wells Fargo to cut it's dividend to shareholders from 34 cents to five cents per share per quarter. Wells Fargo operated at a loss in the fourth quarter last year due to it's seize of Wachovia bank. The purchase of this bank is expected to make Wells Fargo billions over the long term, however, one quarter operating at a loss is enough for the government to assume control of financing and salaries.
The Treasury Department has extorted banks into taking TARP money. They ahve threatened public audits in conjunction with the FDIC to banks that don't take TARP money. Apparently, the government feels that if a bank isn't losing money, it must be cheating. Wells Fargo is completely solvent. The loss they took is a small percentage of liquid assets.
Basically, Wells Fargo made a major investment, but the government is more concerned with the immediate impact on earnings statements. This bank has to cut dividends to keep the government happy, even though the savings are nominal at best, and not necessary for the bank to operate. These savings are nothing in the long run, and the cash that a liquidation of Wachovia could generate would more than make up for the operating costs of the last quarter of 2008.
Does the government have this power? Where in the constitution does interstate trade involve stock dividends? Dividends are nothing more than a payment to investors. Profits above operating costs, asset acquisition and basic savings are distributed to share holders. Wells Fargo has always given a dividend to shareholders, and is in no danger of closing, even during these hard economic times. Why is the government even getting involved?
The Treasury Department has extorted banks into taking TARP money. They ahve threatened public audits in conjunction with the FDIC to banks that don't take TARP money. Apparently, the government feels that if a bank isn't losing money, it must be cheating. Wells Fargo is completely solvent. The loss they took is a small percentage of liquid assets.
Basically, Wells Fargo made a major investment, but the government is more concerned with the immediate impact on earnings statements. This bank has to cut dividends to keep the government happy, even though the savings are nominal at best, and not necessary for the bank to operate. These savings are nothing in the long run, and the cash that a liquidation of Wachovia could generate would more than make up for the operating costs of the last quarter of 2008.
Does the government have this power? Where in the constitution does interstate trade involve stock dividends? Dividends are nothing more than a payment to investors. Profits above operating costs, asset acquisition and basic savings are distributed to share holders. Wells Fargo has always given a dividend to shareholders, and is in no danger of closing, even during these hard economic times. Why is the government even getting involved?
