bank dividends

The Federal Reserve is finally admitting that not all the big banks are healthy: Bank of America won't get to pay increased dividends. But none of those financial giants should be allowed to, and a logical look at the reasons they say they want to dole out the cash makes it totally clear why.

The Fed's decision to allow big banks to pay sharply higher dividends makes no sense, and not just because the results of the so-called "stress tests" are secret. Based on facts that are public knowledge, the banks are actually insolvent, and in danger of sinking much further.

The Federal Reserve is telling some major banks that they can now boost stock dividends if they pass "stress tests" showing that they can weather another recession. During the financial crisis, regulators barred banks from boosting dividends without obtaining approval.

As if we needed more proof of the outlaw actions of banks and their agents, The Baltimore Sun reports that 1,000 or more Maryland deeds are likely forgeries created by a foreclosure mill. If the accusation is true, the false deeds will create a nightmare for the innocent people who bought the homes.

After a rough opening session on Monday, stocks rebounded sharply on Tuesday. The Dow enjoyed a triple-digit gain after oil prices eased and bank shares bounced higher on the possibility of further dividend payouts and share buybacks.

The Federal Reserve may soon start letting some banks boost their dividends again, according to The Wall Street Journal. If that happens, it would signal that regulators have become comfortable enough with the new financial rules to let institutions hike shareholder payouts.