SEC Prepares Proposal to Eliminate Quarterly Reporting Requirement.
Trump and others have said public companies should have to report earnings only twice a year
SEC Prepares Proposal to Eliminate Quarterly Reporting Requirement.
Trump and others have said public companies should have to report earnings only twice a year
I think this is a bad idea. Quarterly reporting is one of the few regular discipline mechanisms public companies still have. It is not just about feeding Wall Street’s short term obsession. It is also about forcing management to open the books on a regular basis, explain what is happening, and let investors see problems while they are still developing instead of after they have turned into full blown disasters.
The book also makes a big deal out of transparency. They argue that better and clearer information on debt, guarantees, and balance sheets is critical, and that international institutions should be pushing harder for transparency because opaque accounting makes crises harder to see until it is too late.  They even say governments often do not want markets to fully recognize the risks they are taking, because fuller disclosure would raise financing costs, and they criticize opaque accounting systems with off balance sheet guarantees.  That logic applies just as well to public companies. Less frequent reporting does not reduce risk. It reduces visibility into risk.
Another point from the book is that confidence is fickle. Things can look stable for a long time, then suddenly crack. Reinhart and Rogoff note that highly indebted systems can appear to roll along just fine until confidence collapses, and by then the accident that was waiting to happen finally happens.  That is exactly why more frequent disclosure matters. You want more opportunities to spot weakening fundamentals before confidence snaps, not fewer.
So no, I do not buy the argument that semiannual reporting would somehow create healthier capitalism. More likely it would create murkier capitalism. It would give executives more time to massage narratives, delay bad news, and hide weakening conditions between reporting dates. This book gives a lot of historical examples showing that opacity, complacency, and the belief that regular warning signals are no longer necessary are precisely the kind of thinking that sets the stage for bigger financial messes later.
jh937hfiu3hrhv9 on
Mushroom Economy. Keep public in the dark and feed them shit.
TheRealTruru on
Quarterly reports are standard and normal, actually so dumb to try to change it to every 6 months, another attempt to scam the system, these people are relentless
3 Comments
I think this is a bad idea. Quarterly reporting is one of the few regular discipline mechanisms public companies still have. It is not just about feeding Wall Street’s short term obsession. It is also about forcing management to open the books on a regular basis, explain what is happening, and let investors see problems while they are still developing instead of after they have turned into full blown disasters.
Years ago, I read a really good book about this. One of the big themes that’s in [This Time Is Different](https://www.amazon.com/This-Time-Different-Centuries-Financial/dp/0691152640?crid=3M9EA4H91VTK9&dib=eyJ2IjoiMSJ9.zREUAw89kwulizVWZ4YiHZEMEaA5NpzAl5ZTm9QbYjUmP11neIfkU-qDn6HuqZiTW55a7UerlGvN3c5J0w4cESWTGlO3CWpeHGMM_KzXRN-i3XEFz0SkGngkhkRGDICHJABVTFuGXorpqC1LUqg3lCWllJifxRQT9YwybmU8eJ_z34VH3jlpaWAh87_d8v2OUeP-QHEijaiiOnRx7dlv-H9u3SWWch5IZfmXdZzC5HI.u-nhM0eWJc4wGy0GNMabln9p91zNFdHYo-0DzJYCrOg&dib_tag=se&keywords=This+time+is+different&qid=1773702289&sprefix=this+time+is+different%2Caps%2C225&sr=8-1&linkCode=ll2&tag=nightsignalco-20&linkId=95aca644c71d1d24c736e08a939ade7c&language=en_US&ref_=as_li_ss_tl) is that crises get worse when people convince themselves that old warning signs no longer matter and that the system is somehow safer or smarter this time around. Reinhart and Rogoff literally describe the “this time is different” syndrome as the belief that the old rules no longer apply, right before things blow up.  Cutting required reporting from four times a year to two fits that mindset way too well. It gives managers, boards, analysts, and investors fewer forced check-in points, which means more room for wishful thinking, delayed recognition, and buried deterioration.
The book also makes a big deal out of transparency. They argue that better and clearer information on debt, guarantees, and balance sheets is critical, and that international institutions should be pushing harder for transparency because opaque accounting makes crises harder to see until it is too late.  They even say governments often do not want markets to fully recognize the risks they are taking, because fuller disclosure would raise financing costs, and they criticize opaque accounting systems with off balance sheet guarantees.  That logic applies just as well to public companies. Less frequent reporting does not reduce risk. It reduces visibility into risk.
Another point from the book is that confidence is fickle. Things can look stable for a long time, then suddenly crack. Reinhart and Rogoff note that highly indebted systems can appear to roll along just fine until confidence collapses, and by then the accident that was waiting to happen finally happens.  That is exactly why more frequent disclosure matters. You want more opportunities to spot weakening fundamentals before confidence snaps, not fewer.
So no, I do not buy the argument that semiannual reporting would somehow create healthier capitalism. More likely it would create murkier capitalism. It would give executives more time to massage narratives, delay bad news, and hide weakening conditions between reporting dates. This book gives a lot of historical examples showing that opacity, complacency, and the belief that regular warning signals are no longer necessary are precisely the kind of thinking that sets the stage for bigger financial messes later.
Mushroom Economy. Keep public in the dark and feed them shit.
Quarterly reports are standard and normal, actually so dumb to try to change it to every 6 months, another attempt to scam the system, these people are relentless