Dealers tout dividends despite slide

Implied crisis

Dan Fields, SG CIB

Sliding stock markets have dragged dividend expectations down by as much as a third over the past couple of months, driven partly by dealers' attempts to hedge the long dividend exposure resulting from their structured products business. That sounds ominously similar to the fourth quarter of 2008, when banks trying to reduce exposure to falling dividends found hedge funds - which typically provided the other side of the market - reluctant to trade. The market's sudden illiquidity magnified ba