The dwindling of dividends has implications which are nothing short of revolutionary. Most of financial theories we use to determine value of shares were developed in 1950's and 1960's, when dividends were in vogue. They invariably relied on a few implicit and explicit assumptions:

That fair "value" of a share is closely correlated to its market price; That price movements are mostly random, though somehow related to aforementioned "value" of share. In other words, price of a security is supposed to converge with its fair "value" in long term; That fair value responds to new information about firm and reflects it - though how efficiently is debatable. The strong efficiency market hypothesis assumes that new information is fully incorporated in prices instantaneously. But how is fair value to be determined?

A discount rate is applied to stream of all future income from share - i.e., its dividends. What should this rate be is sometimes hotly disputed - but usually it is coupon of "riskless" securities, such as treasury bonds. But since few companies distribute dividends - theoreticians and analysts are increasingly forced to deal with "expected" dividends rather than "paid out" or actual ones.

The best proxy for expected dividends is net earnings. The higher earnings - likelier and higher dividends. Thus, in a subtle cognitive dissonance, retained earnings - often plundered by rapacious managers - came to be regarded as some kind of deferred dividends.

The rationale is that retained earnings, once re-invested, generate additional earnings. Such a virtuous cycle increases likelihood and size of future dividends. Even undistributed earnings, goes refrain, provide a rate of return, or a yield - known as earnings yield. The original meaning of word "yield" - income realized by an investor - was undermined by this Newspeak.

Why was this oxymoron - "earnings yield" - perpetuated?

According to all current theories of finance, in absence of dividends - shares are worthless. The value of an investor's holdings is determined by income he stands to receive from them. No income - no value. Of course, an investor can always sell his holdings to other investors and realize capital gains (or losses). But capital gains - though also driven by earnings hype - do not feature in financial models of stock valuation.

Faced with a dearth of dividends, market participants - and especially Wall Street firms - could obviously not live with ensuing zero valuation of securities. They resorted to substituting future dividends - outcome of capital accumulation and re-investment - for present ones. The myth was born.

Thus, financial market theories starkly contrast with market realities.

No one buys shares because he expects to collect an uninterrupted and equiponderant stream of future income in form of dividends. Even most gullible novice knows that dividends are a mere apologue, a relic of past. So why do investors buy shares? Because they hope to sell them to other investors later at a higher price.

But is it?

It is definitely not. To understand why, we should first review intricate procedure involved.

In principle, best and safest thing to do is call authorization centre of bank that issued your card (the issuer bank). Calling number published in media is second best because it connects cardholder to a "volunteer" bank, which caters for needs of all issuers of a given card. Some service organizations (such as IAPA – International Air Passengers Association) provide a similar service.

The "catering bank" accepts call, notes down details of cardholder and prepares a fax containing instruction to cancel card. The cancellation fax is then sent on to issuing bank. The details of all issuing banks are found in special manuals published by clearing and payments associations of all banks that issue a specific card. All financial institutions that issue Mastercards, Eurocards and a few other more minor cards in Europe are members of Europay International (EPI). Here lies first snag: catering bank often mistakes identity of issuer. Many banks share same name or are branches of a network. Banks with identical names can exist in Prague, Budapest and Frankfurt, or Vienna, for instance. Should a fax cancelling card be sent to wrong bank – card will simply not be cancelled until it is too late. By time mistake is discovered, card is usually thoroughly abused and financial means of cardholder are exhausted.

Additionally, going indirect route (calling an intermediary bank instead of issuing bank) translates into a delay which could prove monetarily crucial. By time fax is sent, it might be no longer necessary.

If card has been abused and fraudulent purchases or money withdrawals have been debited to unfortunate cardholders' bank or credit card account – cardholder can reclaim these charges. He has to clearly identify them and state in writing that they were not effected by him. A process called "chargeback" thus is set in motion.

A chargeback is a transaction disputed within payment system. A dispute can be initiated by cardholder when he receives his statement and rejects one or more items on it or when an issuing financial institution disputes a transaction for a technical reason (usually at behest of cardholder or if his account is overdrawn). A technical reason could be wrong or no signature, wrong or no date, important details missing in sales vouchers and so on. Despite warnings carried on many a sales voucher ("No Refund – No Cancellation") both refunds and cancellations are daily occurrences.