Articles by: admin
The 2024 Benchmark in a 32-year Frame
S&P buybacks grabbing over half of earnings
S&P’s Howard Silverblatt is out with a preliminary reading on 2024Q1’s stock buybacks. In a phrase, they were big, if not quite the biggest.
Buybacks for S&P 500 stocks totaled $237 billion in the quarter, up 8% from the previous quarter and 9% from a year earlier. At an annualized rate, that equaled 3.4% of GDP, up from 2.9% last year and above the 3.1% average since 2005. Firms devoted over half their operating earnings—51.4% to be precise—to purchasing their own shares, slightly below the average since 2012. The buyback sum equaled a third of nonresidential fixed investment.
Call us old-fashioned, but maybe a larger share of earnings should be devoted to capital spending. Note how much lower the share devoted to buybacks were in the late 1990s, a time of high investment and rapid productivity growth.
Noting that consumers access a range of sources for information about the economy—discussions with friends, their own experiences, and what they read or hear—Dr. Joanne Hsu, who directs the University of Michigan’s survey of consumers—recently broke out the sources that go into the “news heard” component of the survey. Apparently prompted by that fact that consumers reporting that they had heard bad news about inflation was “much higher,” in 2022 than it was during the “objectively worse” inflation periods of the 1970s, her team asked respondents open-ended questions about news sources from January through April.
NB: Unfavorable news about prices hit just 20% in the 1970s, and topped out at 35% in 2022.
Top sources, all over 30%, were mainstream news, general/other news, and general/other internet, followed by discussions with friends, family and co-workers, about 20%. Business news was mentioned by about 18% of respondents, and partisan sources by about 15%. Social media followed at about 13%, and just 10% of consumers mentioned the stock market, or their own experiences as sources.
Consumers who rely on their own and friends’ experiences have the lowest favorability ratings, which Hsu points out may well be because they are the most vulnerable, with fewer holding college degrees, and lowest median incomes. Those who read mainstream or business news, or follow the stock market, have highest levels of educational attainment and median incomes, and report most favorably on what they read. Those who rely on what Hsu calls the “catch-all” categories are close to the average, which she believes is because the sources are diverse.
But if you break out Democrats, Independents and Republicans, all hell breaks loose. Half of Democratic respondents, 27% of Independents, and just 16% of Republicans follow the mainstream news. Although shares by party for those who follow general sources and the internet are within the same range, those are the most common sources among Republicans, 38% and 37%. About 20% of Republicans follow partisan sources, as do 15% of Democrats. As you might guess, Independents are least likely to follow such news.
Although hearing more upbeat news is tied with higher sentiment, Hsu suggests the need for follow-up research on whether that is the product of bias confirmation. In any case, assessing partisan sources is associated with lower net favorability of news heard, and lower sentiment, among Republicans, and higher levels among Democrats. Among Democrats who mention partisan sources, net favorability of news heard is 143, and sentiment 110, among Republicans who mention partisan sources, net assessment is 31, and sentiment, 53. Democratic assessment and sentiment falls among those with no mention of partisan sources, 123 and 99, and rises among Republicans, 47 and 65.
AllSides Media Bias Chart: Read it and weep.
A Truly “Who Knew?” Survey
Montana grizzly bears forage in the dusk
We came across a survey covering public support for the Endangered Species Act, including among different demographics, over roughly the last twenty years.
Jeremy Bruskotter and Ramiro Berardo, who teach at Ohio State, and John Bruskotter, at University of Michigan, compiled polls taken over the last twenty years and found support of the Act to be remarkably stable.
As background, visible declines in game species and those taken for millinery use, like the Carolina parakeet whose flocks once darkened the skies, led John Lacey, a Republican representative from Iowa, to introduce the Lacey Act of 1900, the first legislation regulating commercial animal markets. Later came the Migratory Bird Treaty of 1929, between the US and Canada, and others leading up to the broader Endangered Species Act of 1973.
Some animals protected by these acts have recovered, like our iconic bald eagle, bison, manatee and grizzly bear, while others, like the whooping crane, remain endangered with slowly recovering populations. That’s not so shocking: science-based conservation science is often effective and takes time.
What is shocking: the broader Endangered Species Act of 1973, written at Richard Nixon’s request, passed with a 355-4 vote. And the public likes it.
The authors compared results of the base survey conducted in 1996, and those conducted in 2011, 2014 and 2015 and found them “statistically indistinguishable.” Overall, four in five American support the Act, and one in ten oppose it, while some don’t know what they think. And, while gun control and climate change have become increasingly polarized, the majority of self-identified liberals, 90%, moderates, 77%, and conservatives, 74% support the Act. No surprise that 92% of environmentalists support the Act, as do 73% of hunters, who often partner with ecological conservation groups, but it is stunning that 71% of farmers and ranchers support protecting vulnerable species, as do 69% of property rights advocates, who have been among the most verbal opponents.
Another surprise: Some supporters of the Act have expressed concern that protecting “controversial” animals, like gray wolves, may turn people in wolf territory against the Act, but both trust in the Fish & Wildlife Service, which administers the Act, and opinions about wolves within and without wolf territory are equivalent.
If this all seems odd given the unflagging pressure in Congress to weaken the Act, other research, specifically this study of wolf reintroduction in Scotland, shows that leaders of special interest groups often hold more extreme views than their members.