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. And what happens when pricing signals are distorted? You get distorted decision-making. Which is why most of the investment happening today around the world is predominantly mal-investment. And why
by davefairtex 
