Tag: news

By Megan Brenan of Gallup,

Highlights:

• Six in 10 Americans say their life right now is “not yet back to normal”

• 67% of Republicans, 21% of Democrats say life is at least somewhat normal

• 70% in U.S. say the pandemic has disrupted their life a great deal/fair amount

As COVID-19 cases were surging again across the U.S. last month, more than six in 10 Americans said their lives had not returned to pre-pandemic normalcy. Overall, 62% of Americans surveyed Oct. 19-Nov. 1 said their life right now is “not yet back to normal,” while 34% said theirs is “somewhat back to normal” and 3% said “completely” so.

Among a host of key demographic subgroups, Republicans are the most likely to say their lives have somewhat (59%) or completely (8%) gotten back to what they were before COVID-19. The combined 67% of Republicans feeling like life is back to normal is more than three times the rate among Democrats (21%) and more than double that among independents (32%).

Indeed, Gallup’s probability-based panel survey tracking Americans’ attitudes and behaviors related to the coronavirus situation has found discrepancies in partisans’ practices during the pandemic, which may explain why more Republicans say their lives have returned to normal.

The latest data find 48% of Democrats, 41% of independents and 20% of Republicans saying they have isolated themselves from people outside their household — either “completely” or “mostly” — in the past 24 hours. At the same time, 50% of Republicans say they have made little or no attempt to isolate themselves, compared with 23% of Democrats and 38% of independents who say the same.

Democrats are twice as likely as Republicans to say they “always” practiced social distancing the previous day (53% vs. 26%, respectively). Fully one-quarter of Republicans say they “rarely” or “never” did so.

Similarly, 73% of Republicans think the better advice for people who do not have symptoms of the coronavirus and are otherwise healthy is to lead their normal lives as much as possible. However, majorities of Democrats (93%) and independents (60%) believe it is better to stay home as much as possible to avoid contracting or spreading the coronavirus.

Americans’ Activities Differ Based on Degree of Normalcy They Feel

The degree of normalcy Americans feel they have in their life is directly linked to the daily activities they are participating in. That is, those who say their lives are at least somewhat back to normal are more likely than those who say their lives are not yet back to normal to have visited a grocery store, their workplace, someone else’s home, their place of worship and, to a lesser extent, the gym in the past 24 hours. Those who feel life has returned to some normalcy are also twice as likely as those who do not to say they have dined at a restaurant within the past day.

While it is clear that there are differences between these two groups, it is not possible to tell how close the current readings are to actual pre-COVID behaviors.

Americans’ Views of How Much COVID-19 Has Disrupted Their Lives Are Stable

Americans’ assessment of their own return to normal, pre-pandemic life is in line with their evaluation of how much the coronavirus situation has affected their life. In all, seven in 10 U.S. adults say it has disrupted their life “a great deal” (24%) or “a fair amount” (46%). Readings on this measure have been largely stable since April 20 after hitting highs between 74% and 81% earlier in the pandemic.

Just as Republicans are more likely than Democrats and independents to say their life is at least somewhat back to normal, so too are they more likely to say the coronavirus situation has not significantly disrupted their life. Fifty-one percent of Republicans, 81% of Democrats and 74% of independents say the pandemic has affected their life at least a fair amount.

Bottom Line

New coronavirus cases are trending sharply upward in the U.S., and a majority of Americans continue to say the situation is disrupting their lives. Few U.S. adults say life has completely returned to normal — yet there are sizable differences across key subgroups in those experiencing a partial return to normalcy. Partisanship remains the most significant driver of the public’s perceptions of the disease and their behaviors in response to it.

What would the U.S. capital markets look like to China based companies if they were forced to use U.S. auditors? We’re guessing U.S. markets would lose a lot of their appeal overnight.

Regardless, that’s the extremely serious question that many Chinese firms may want to start asking themselves, as regulators are now proposing a plan that could require exactly that, according to the Wall Street Journal. 

The proposal will be issued for public comment in December, and will address a problem that has plagued Chinese companies on U.S. capital markets for more than a decade: China hasn’t let the work of Chinese auditors be inspected.

This has been the key factor in a number of Chinese firms being halted and delisted from U.S. exchanges over the last decade, as short sellers like Citron Research and Muddy Waters Research have collectively worked, among others, to help expose innumerable frauds and misstatements from companies based in China. A movie, “The China Hustle“, was even made about the widespread fraud.

The PCAOB has been unable to get cooperation from China on a broad scale. The PCAOB has often had to sue Chinese audit firms and negotiate with Chinese regulators for more information. Now, new regulations could put the responsibility on the listing exchanges, like NASDAQ and NYSE, who choose to give credibility to China-based entities by accepting their listing fees and putting them on their well known exchanges.

In other words, it appears to us that U.S. exchanges seem to have no problem making people like Jack Ma into billionaires with U.S. capital, without even understanding the intricacies of the opaque businesses they choose to list.

So far, the NASDAQ and NYSE have refused to change their listing rules, despite massive frauds like Luckin Coffee being uncovered. The regulations could wind up hurting the top lines of exchanges, as many U.S. listed China-based companies could wind up moving off of major exchanges and onto the Over the Counter market to skirt the new regulations. 

The SEC is trying to get the plan in order before Chairman Jay Clayton leaves at the end of the year, as we noted yesterday. The regulation could then be “tweaked” by an incoming Biden administration. 

China has come up with the laughable excuse that it “is worried about auditors revealing strategic secrets held by domestic firms, some of which are majority-owned by the Chinese government”. In fact, the country signed into law this year a rule stating that its citizens can’t comply with overseas regulators without the government’s permission.

Those “secrets”, if we had to guess, may include fraud being perpetrated on a massive scale. 

The regulation seeks to address this issue by including a separate proposal to allow Chinese firms to get a second review of their books by any firm globally that complies with PCAOB oversight. 

Paul Leder, an attorney at Miller & Chevalier and former head of the SEC’s Office of International Affairs, said: “How do you meet the U.S. goal which is an audit subject to a meaningful inspection, and what appears to be the Chinese goal of limiting the access to information held in China?”

Fed Chair Powell was asked yesterday what the Fed can do to help reduce income inequality? Powell’s answer, like the Fed’s token answer to just about everything these days, was to keep rates low for longer. His logic was that that low borrowing costs would reduce interest payments, especially for low wage earners, and provide greater disposable income.

But while that sounds good in theory, the reality is the world doesn’t work that way at all. As the FT wrote last year, when central banks allow interest rates to approach, or fall below, what is quaintly termed “the zero lower bound” there are clear losers. Banks are presuming that households, obedient to monetary policy theory, will borrow more money at still lower rates. In fact, the reality is that “lower for longer” prevents a robust recovery because it makes economic inequality worse.

This is especially true in the US. Many American households are already living hand-to-mouth, with more debt than they will ever be able to repay. All lower interest rates do is make it harder for those who might be able to save a little to get a healthy return that might provide financial resilience today and a secure retirement in the longer term.

Low interest rates are tough on vulnerable households; negative rates are brutal. The simple mathematics of what happens to a small savings account shows why post-crisis monetary policy has made inequality so much worse.

While we will spare readers the simple math of compounding savings at the historic 5% rate of interest vs the current ZIRP, we will merely jump to the conclusion that “n a world of ultra-low rates, most households have no hope of wealth accumulation, no matter how much they save. Indeed, they are better off being profligate.”

There is another reason why low rates crush lower income segment and in fact lead to even greater wealth inequality. As Bloomberg’s Vincent Cignarella writes, banks provide less credit, not more, when rates are low. And this could hold back a recovery among low-income families.

The chart below shows total U.S. consumer credit, which remains below pre-pandemic levels. Without fiscal stimulus, this is likely to decline further, as it did into May.

The reason credit spigots have gotten stopped up is banks face greater loan losses if incomes fall due to the pandemic, especially for low-income, higher-risk borrowers. If interest rates stay near zero for longer, banks are actually likely to pull back on consumer lending. Why? Because the only way they make money with low income or risky borrowers is to keep loan-loss ratios at levels where those who pay higher rates provide a net profit.

When rates are high, banks can afford to take chances on riskier loans because the ROI is higher across the portfolio, and those repaying more than make up for those who default. In a low-rate environment banks are more likely to pull back on lending where the risk in credit spreads doesn’t provide a sufficient buffer for loan losses. Jamie Dimon hinted at that today when during the Dealbook conference he said that “We want to bank the unbanked, but we don’t want to make it a charity thing”

On how Dimon sees different approaches to erasing the racial equality gap: “We want to bank the unbanked, but we don’t want to make it a charity thing” #dealbook

— Andrew Ross Sorkin (@andrewrsorkin) November 18, 2020

So, as Cignarella  concludes “instead of providing relief to low income earners and closing the inequality gap, low rates for a lot longer may actually exacerbate it.”

The Pennsylvania Supreme Court has agreed to hear claims by President Trump’s campaign challenging approximately 8,000 mail-in ballots, which the campaign insists should be disqualified because they were improperly filled out.

According to the claim, the ballots in question bear voter signatures, yet do not contain hand-written names, addresses or dates on the outside of their return envelopes.

The move comes after a lower court in Philadelphia denied the campaign’s request on Friday, finding that voters’ names and addresses were already pre-printed on the envelopes, while state election law left the definition of ‘filling out’ a ballot ambiguous, according to Bloomberg.

On Wednesday, the highest court in the state agreed to exercise emergency jurisdiction to rule on whether those ballots should be disqualified – and will not consider any allegations of fraud and irregularity.

As Bloomberg notes, however, the Trump campaign has not had a lot of luck with the Pennsylvania Supreme Court, which ruled before a bid by the campaign to disqualify mail-in ballots which were postmarked before Election Day but received up to three days after. Meanwhile, the court also ruled on Tuesday that Republican poll watchers weren’t entitled to stand a specific distance while monitoring ballot-counts for potential fraud.