JPM cut their dividend to .05 quarterly from .38 cents.
It was just Wednesday when I wrote about Jamie Dimon's boardroom fantasy when he said he wanted to pay back the $25 billion of TARP money.
I said "Maybe Jamie Dimon should talk to Wall Street about paying back the TARP money after he first cuts the dividend! "
Today Jamie cut the dividend at JP Morgan, and said, "While we recognize our tremendous obligation to shareholders to maintain dividend levels, we also understand that extraordinary times require extraordinary measures. Our action today is being done as a strong precautionary measure to help ensure that our fortress balance sheet remains intact – even if conditions worsen significantly."
Two weeks ago, Jamie Dimon said he was comfortable with the dividend and it was an important obligation.
Today it gets cut 86%.
JPM has such a fortress balance sheet that it has to cut the dividend after getting $25 billion of TARP money that it supposedly doesn't need. Money that would cover the dividend for the next five years.
Obviously, JPM needs the money.
But the dividend cut is a good first step, and it's also a good first step in recognizing the reality that JPM is facing right now.
Conditions will worsen significantly, and maybe Dimon may prod Jeff Imelt of GE to reconsider his idiotic stance on GE's dividend.
That dividend needs to be cut today!