4 comments on “Bank shareholders’ dividends

  1. I’m going to have to argue with your comments in this post, but don’t take them as personal.

    An investor isn’t gambling when they invest – they are providing capital to a business in exchange for dividends, growth or a share of future profits of a business.

    While I don’t condone the behaviour of management of many financial institutions, what benefit or incentive would investors have in keeping their capital invested in these companies?

    Do you realize that if investors saw zero benefit that the companies would quickly trade to zero and no matter what government measure was implemented a failure would be inevitable?

  2. I have to disagree with the previous comment. In theory, he — or she — is correct, in that investors have traditionally held a long-term interest. However, in this era of day trading and short selling, the market has become nothing more than a barely regulated casino. Had the shareholders actually seen themselves as owners of a company, done their due diligence and used their influence to rein in the outrageous actions of management, the government wouldn’t have to step in to bail them out.

    On another, somewhat related subject, Just Williams, I’ve been curious about your take on the election campaign we have going on over here. I respect your insights, and wonder how things look from your perspective.

  3. Dividends Anonymous: Thanks for your comment which does not seem to me to contradict my views except that I still regard shareholding as gambling. Yes, investors provide the capital for business and reap rewards in good times in the shape of enhanced share values and dividends. I have no problem with that provided that investors accept that in bad times share values fall and there are no dividends. While banks are being propped up by taxpayers’ money their existence is artificial – they cannot be said to be standing on their own feet and earning their keep until such a time as they are doing it without the support of public money. Therefore they should not be paying dividends until the public money is repaid first. If shareholders can’t stand the heat they should get out of the kitchen, ie. sell their shares.

    Bikinginla: Thanks for your comment, though it is too flattering! My views are of no consequence – just occasional rants. I do not feel sufficiently well-informed about US politics to post serious comments and the media coverage of your election campaign has hardly been an exercise in public education. I suppose my overriding impression so far is summed up by the question – how did a country of 300 million people end up with these two candidates and their potential VPs? But we Brits are pretty good at mass stupidity too. Eleven years ago we elected Tony Blair and, even now, we still take the Conservative Party seriously, even as a potential government. How brain dead is that?!

  4. I agree with your comments and your reply to Dividends Anonymous. Of course we need investors in business to grow the economy, but how much of this investment is real, and how much is it gamblers jumping on the bandwagon while profits are good and scuppering the business when the going gets tough? We are told that Stock Markets are for the long term, not just while you can “turn a fast buck” How much real money was invested and how much was virtual money, borrowed from those who had also borrowed ad infinitum.

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