In this week's Off The Cuff podcast, Chris and John Rubino discuss:
- Elusive Earnings
- Corporate profits are vaporizing across all sectors
- Non-GAAP Crap
- Companies are increasingly contorting their books to look more solvent than they are
- The Ramifications Of Distorting Price Signals
- Malinvestment the world 'round
- Inflate Or Die
- Why helicopter money is coming
This discussion between Chris and John was recorded last week, but was unable to run until now due to a bevy of other articles ahead of it in the pipeline. Not to worry; it's just as germane this week as it was last.
In it, Chris and John discuss the drying up of "real" (GAAP) earnings across virtually all industries. We're entering a profit drought — a clear signal that recession is looming — yet you wouldn't easily know it by looking at the actual numbers companies are reporting. Instead of GAAP figures, companies tout their own "non-GAAP" metrics which — surprise! — add a lot of lipstick to their respective pig. Ace reporter Gretchen Morgensen reveals that while GAAP earnings are down 11% year-over-year, non-GAAP earnings (which are the ones the most frequently appear in media headlines) are up 3% over the same period.
This is just one of the many serious ways in which our financial system is making itself blind to true price discovery.
by pipyman