Veteran short seller Jim Chanos has sharply criticized the notion of adopting Chinese financial reporting standards in the U.S., saying that the Asian country should “NOT” be a benchmark for financial reporting in the U.S.
Chanos Criticizes Trump’s Idea Of Eliminating Quarterly Reports
Chanos’s remarks came in direct response to President Donald Trump’s renewed push to eliminate quarterly corporate earnings reports in favor of a semi-annual system.
Known for his skepticism towards opaque financial practices, Chanos appears to be directly challenging Trump’s implicit suggestion that China’s approach offers a better model for corporate oversight. The sentiment underscores a fundamental debate about transparency and accountability in financial markets.
He posted, “China should NOT be the standard for our financial reporting.”
Trump Wants To Scrap Quarterly Earnings
Trump, in a recent Truth Social post, argued that the current quarterly reporting system is detrimental, advocating for a shift to a “Six (6) Month Basis” to save money and allow managers to focus on long-term growth. He controversially contrasted U.S. practices with China’s “50 to 100 year view on management of a company,” suggesting the current U.S. system is “Not good!!!”
This isn’t Trump’s first attempt to overhaul reporting standards. During his first term in 2018, he similarly urged federal regulators to consider moving from quarterly to semiannual reporting, citing cost reduction and increased flexibility for companies.
Larry Summers Pushes Back On Trump’s Idea
The proposal has ignited mixed reactions among financial experts and business leaders. Former Treasury Secretary Lawrence H. Summers warned on X that such a move would “cause companies and the markets to function less well,” drawing an analogy to students disliking grades because “being monitored and accountable for results is painful.”
Summers emphasized that eliminating regular reports could weaken accountability and transparency in U.S. markets.
Buffett And Dimon’s View On Quarterly Earnings
While Warren Buffett and JPMorgan Chase CEO Jamie Dimon supported eliminating quarterly guidance in 2018, Buffett later clarified his stance, stating, “I like to get those quarterly reports. I do not like guidance.”
The Securities and Exchange Commission (SEC) has required quarterly disclosures since 1970 to ensure investors receive regular, comparable financial information. Any shift would require significant regulatory processes, including public comment, and would represent a major change in how American companies operate.
Chanos’s intervention highlights the deep divisions over the implications of such a reform, particularly when drawing comparisons to nations with vastly different governance and transparency norms.
Price Action
The SPDR S&P 500 ETF Trust (NYSE:SPY) and Invesco QQQ Trust ETF (NASDAQ:QQQ), which track the S&P 500 index and Nasdaq 100 index, respectively, fell in premarket on Wednesday. The SPY was down 0.076% at $659.50, while the QQQ declined 0.085% to $590.68, according to Benzinga Pro data.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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