Tag: GAAP

Non-GAAP Earnings Are About To Plunge The Most Since 2009; As For GAAP Don’ Even Ask…

Tyler Durden's picture

Submitted by Tyler Durden on 03/07/2016 09:15 -0500

Now that Q4 EPS is almost in the history books with 494 S&P500 companies reporting, we can look at the numbers: blended 4Q EPS is $29.49 (-2.9% y/y) with GAAP EPS of $19.92. As DB admits, a 67% GAAP-to-non GAAP ratio is well below the normal ~90% ex. recessions, exacerbated by asset impairments and restructuring costs especially at Energy.

This is how DB shows this almost unprecedented divergence between GAAP and non-GAAP “earnings”:

 

This is merely a recreation of charts we first showed one week ago, when we commented on the widest spread between GAAP and non-GAAP since the financial crisis:

 

The chart below shows where the GAAP to non-GAAP divergence is most acute.

 

Ok, we get it: on a GAAP basis it is not a recession any more, it is a depression, just as that Houston CEO letter explained.

Continue reading “Non-GAAP Earnings Are About To Plunge The Most Since 2009; As For GAAP Don’ Even Ask…”

THE GREAT CORPORATE EARNINGS FRAUD

“What are the odds that people will make smart decisions about money if they don’t need to make smart decisions–if they can get rich making dumb decisions? The incentives on Wall Street were all wrong; they’re still all wrong.” ― Michael Lewis, The Big Short: Inside the Doomsday Machine

Corporate earnings reports for the fourth quarter are pretty much in the books. The deception, falsification, accounting manipulation, and propaganda utilized by mega-corporations and their compliant corporate media mouthpieces has been outrageously blatant. It reeks of desperation as the Wall Street shysters attempt to extract the last dollar from their muppet clients before this house of cards collapses.

The CEOs of these mega-corporations accelerated their debt financed stock buybacks in 2015 as stock prices reached all-time highs and are currently so overvalued, they will deliver 0% returns over the next decade. This disgraceful act of pure greed by the Ivy League educated leaders of corporate America to boost their own stock based compensation is reckless and absurd.

It is proof education at our most prestigious universities has produced avaricious MBAs following financial models and each other like lemmings going over the cliff. Proof of their foolishness is self evident after perusing the chart below. These intellectual giants evidently never learned the basic rule of buying low and selling high in order to make a profitable trade.

Continue reading “THE GREAT CORPORATE EARNINGS FRAUD”

FACEBOOK FRAUD

The proof that mainstream media outlets like Marketwatch, Bloomberg and CNBC are nothing but mouthpieces for the corporate fascist states of America is the blaring headlines about the tremendous profit growth just reported by Facebook. 

Here’s the deal. There is no such thing as Non-GAAP earnings. That is a made up number. Corporations in America are required to use GAAP to record their books.

The idiots in the mainstream media are dutifully regurgitating the FALSITY that Facebook earnings went up 48% over last year.

The TRUTH is that Facebook earnings went up 0% over last year.

Just a slight variance.

Keep waiting for anyone beside Zero Hedge to report this inconvenient fact. Jim Cramer says buy, buy, buy.

The Most Ridiculous Charts From Facebook’s Quarterly Earnings

Tyler Durden's picture

Submitted by Tyler Durden on 01/28/2015 16:30 -0500

Facebook may still be able to fool most people most of the time, with gullible investors ready to believe that there were 1.393 billion monthly active addicts who just have to tell the world how their day went, of which 208 million were in the US and Canada, which is more than every single working-age American and Canadian, but where the magic of Facebook’s just reported earnings of $0.54 can truly be appreciated, is in the absolutely magical breakdown between GAAP and non-GAAP for the net income microblogging service.

The punchline: Facebook reported $1,133 billion in GAAP earnings: exactly the same as a year ago. What happened to non-GAAP income from operations during the same period? It rose from $1.5 billion to $2.2 billion. Again: this is in a period in which GAAP income remained unchanged!

As for real, GAAP EPS, it was… drumroll… $0.25, or less than half of the mark-to-unicorn number that only FB shareholders, if not advertisers, can love.

Continue reading “FACEBOOK FRAUD”

WHEN IN DOUBT, LIE

The precedent was set in March of 2009 when Bernanke and Geithner threatened the wimpy accountants at the FASB and forced them to waive the mark to market accounting rules, so the Too Big To Trust Wall Street Criminal Banks could lie and produce fictitious financial statements. When you’re insolvent, just make up the numbers on your financial statements, with the blessing of the government, Federal Reserve and FASB.

It seems the mega-corporations that make up the S&P 500 have taken the lesson to heart. When your profits are falling, just produce alternatives numbers that show them rising. As someone with an accounting degree and a CPA license I can tell you they don’t teach NON-GAAP accounting in college. There are no questions on the CPA exam referencing NON-GAAP accounting. That is because NON-GAAP means nothing. It is nothing but a lie. Both the Wall Street shysters and the captured corporate MSM report this bullshit with a straight face as if it is the truth. It’s not.

Everyone knows the BIG LIE works if you state it loud enough and keep repeating it. There are executive stock options to cash and Wall Street banker bonuses to be paid out. Truth is treason in an empire of lies.


WAS THE TRUE DEFICIT $500 BILLION OR $800 BILLION?

Michael Snyder reported last week the annual deficit had gone up by over $1 trillion. He was wrong. It’s a good headline, but he failed to take into account the impact of the fake budget impasse last year. The government drones at the U.S. Treasury stopped counting the daily increase in the national debt on June 1, 2013 and didn’t resume counting until October 16, 2013, after the new fiscal year began. On that day they added $337 billion to the national debt. The fact is the government continued to function and to spend money every day during the budget impasse. You can find the daily national debt total at this website:

http://www.treasurydirect.gov/NP/debt/current

Over the next month you will hear how Obama has reduced the annual deficit to $500 billion in FY14. Your government keepers reported a deficit of $680 billion in FY13. One little problem. It’s a lie, based on ridiculous government accounting and fake adjustments. Let’s assess the true deficits with some fact finding:

National Debt on 9/30/12 – $16.066 Trillion

National Debt on 9/30/13 – $17.036 Trillion (calculated as $16,738 on June 1, 2013 + ($2.44 billion per day x 122 days)

National Debt on 9/30/14 – $17.824 Trillion

These figures are produced by the U.S. Treasury. Using basic subtraction, you come to annual deficits of:

FY13 – $970 billion

FY14 – $788 billion

It’s also interesting that the national debt jumped by $50 billion on the first day of the new fiscal year, when it averages going up by $2.2 billion per day. The Obamanistas weren’t window dressing the fiscal year just before mid-term elections, were they?

You may have noticed the true deficit in FY13 was 43% HIGHER than the reported figure of $680 billion.

You may have also noticed the true deficit in FY14 will be 56% HIGHER than the CBO’s latest projection of $506 billion.

I sense a trend in fraudulent accounting.

Part of the fraud are the fake Fannie & Freddie “payments” back to the U.S. Treasury from their fake “profits” generated by accounting entries. The $100 billion of “payments” in FY13 and $80 billion of “payments” in FY14 reduced the reported deficits. It’s all part of the plan to manipulate the housing market in order to save Wall Street and the insolvent Fannie and Freddie, which have hundreds of billions in toxic mortgage debt on their balance sheets. The Federal Reserve has the rest on their $4 trillion insolvent balance sheet. The deficit figures also don’t include the $16 billion of USPS losses per year. I wonder who will be bailing them out when they go bankrupt?

When someone quotes you the deficits reported by Obama, ask them whether the interest paid by the taxpayers is on the increase in the reported deficit or on the increase in the national debt. They’ll be confused and indignant.

The national debt stands at $17.873 Trillion. Interest on the debt will top $250 billion this year and surge past $300 billion next year. Does the trend depicted on the chart appear sustainable? Based on conservative assumptions, interest as a percentage of total federal spending will increase from 6% to 11.5% by 2019. And that is without a surge in interest rates.

And now for the coup de grace. The Federal Government uses cash basis accounting. If your keepers were forced to use GAAP based accrual accounting, the annual deficit reported would exceed $6.6 Trillion per year. That isn’t a typo. Corporations must record their future promises as an expense. Your Federal Government just pretends they don’t exist. That is how you end up with $200 trillion of unfunded liabilities.

This will surely end well.