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The big dividend was a hallmark of the big bull market. It was accompanied by a small yield. Even generous payouts were only a little fraction of the share prices at most companies. Their stocks had gone that high. With share prices down, yields have gone mad.

Deep in the basements of most companies, the accounting staffs are working under orders from the CFO and board of directors to protect the balance sheet at any cost. Preparing for the economic siege of the next several quarters, many firms will send costs, necessary to run the company or not, to the guillotine in increasing numbers.

Now, the dividend is going the way of extinction. Yields  are up, for now, but so is debt taken on in the salad days. Cash flow is down. KKR Financial (KFN), which is doing remarkably well, eliminated it dividend yesterday.

The list of companies dispatching their dividends is going to move well beyond financial companies, although some banks may dump their payouts completely.

Bank of America (BAC) has a 6.2% yield, which is preposterous. At $1.28, it has to spread that across 4.5 billion shares in its float. Another quarter of losses and the dividend at BAC gets cut in half. Ditto, Wells Fargo (WFC), which has a yield at 4.6%

Newspapers have been pressed to the wall. The New York Times (NYT) has a 10% yield. Good for the ruling Sulzberger family. Bad for debt service. Gannett (GCI) pays out 15.2%. That will never last, not as long as the company’s ad revenue is dropping, which may be forever. Other media companies, especially TV and radio firms, are in trouble. CBS (CBS) won’t be paying 13.2% beyond next quarter.

And, there is the case of GE (GE), the flagship of American business, out ahead of a sinking fleet. GE’s financial arms are in trouble. Its money division may become a commercial bank under the Fed’s special needs program. At a 6.6% yield, even the greatest company in America may have to cut.

Douglas A. McIntyre