Why is GE Still Paying a Dividend?

GE reaffirmed plans to maintain its 31-cents-per-share through the end of 2009.  The company went on to say that "GE expects industrial cash flow to be greater than the amount needed to fund the dividend in 2009."  Here's a suggestion:  Maybe use all of that industrial cash flow to pay off some of your debt?  Because aren't you paying the FDIC a fee to guarantee $139 billion of GE Capital's debt?  Wouldn't it be prudent to instead reduce some of the $65 billion or so in commercial paper that you can't hock to any investors except for the Fed?  Maybe save some of that cash flow to help pay for the 10% dividend you handed to Warren Buffett for his $3 billion "confidence" investment?  Perhaps preserve some capital to increase loss reserves on GE Capital's loan portfolio that is certain to get the stuffing beaten out of it in a nasty recession?  I don't know.  Call me crazy, but GE is not in any position to be paying a dividend right now.  I'll give Mr. Immelt small bonus points for halting the stock buyback program earlier this year, but continuing with a dividend payment is ridiculous for a finance firm that has meaningful risk tied to the mortgage market and depends on the bond market for financing.

I have written several posts about the lack of transparency of GE's balance sheet and the inherent risks lying in its GE Capital finance unit.  Given the drubbing the stock has taken, investors are waking up to the reality that GE really is a finance firm with an attached industrial conglomerate.  I know that GE doesn't want to anger its loyal shareholders, but I'm fairly certain that any shareholder with half a brain will understand.