Cramer Solves BP’s Dividend Problem?
Jeff wrote in, saying he read that the “Volcker rule” may make it into the financial-reform bill. If that happened, he asked, and Congress required banks to split into pieces in order to trade proprietarily, would it mean a drastic reduction in option volume? “Absolutely not,” Cramer said, but more importantly, he doesn’t think the Volcker rule will make it into the bill anyway. Instead, he thinks the Federal Reserve will be given regulatory oversight for proprietary trading.
For Friday’s Mad Mail, Jamie e-mailed Cramer his exchange with BP over its dividend issue. Jamie suggested the company make everyone happy by making a smaller payout and putting the rest in a fund for the costs related to the Gulf spill. If BP didn’t need to draw on that money, then it could pay a special dividend later. The company replied that it had “significant financial flexibility to deal with the cost of the incident” and that it knew how important the dividend was to shareholders.
Cramer, however, a better idea to solve the problem: “Place a $20 billion bond,” he said. “Then we know that we don’t have to worry about the dividend.”
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