Monday, February 23, 2009

JP Morgan's Dividend Cut Announcement Cites Unemployment Rate & House Price Decline Estimates

This afternoon JP Morgan announced that it is cutting its dividend from $0.38/share per quarter to $0.05/share per quarter. What is interesting what they shared as their rationale for cutting the dividend.

Below, I have attached Slide #2 from the presentation in which JP Morgan provides a "highly stressed environment" in which they model a:
  • 2 Year Recession
  • 10% Unemployment Rate
  • 40% Decline in Housing Prices (Peak to trough)

Click for a Larger Image (Red highlight box, added for emphasis)

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