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The Dividend Cliff

panzed Wrote: Oct 29, 2012 6:47 PM
Bush - last year spending. FY2009 (Oct 08-Sept 09) Obama - first year spending. FY2010 (Oct 09-Sept 10) All numbers in billions of dollars. --------------Bush----Obama Budget-----3100-------3500 Stimulus----152---------257 TARP---------700 AIG------------150 Auto Bailout---13---------36 Omnibus------------------410 War suppl(1)-162 War suppl(2)-106 TOTAL--------4383-----4203 Martin Feldstein was quoted, "FY2010 will be Obama's first year. That is his first budget. FY2009 was Bush's budget. Even a 5th grader can see that revenues will go down due to the recession, so deficit spending almost has to take place during these times."

Yesterday, we observed that investors have shifted their forward-looking focus in setting today's stock prices backward from the first quarter of 2013 to the fourth quarter of 2012 instead. Today, we'll explore one of the big reasons why: the looming dividend cliff. The WSJ's Jason Zweig explains (emphasis ours):

Enough about the "fiscal cliff." What about the dividend cliff?

At one second after midnight on...