Challenge me

It’s Sunday, so let’s relax and have a little fun.  Go find an article having something to do with the economy – your favorite recent article, one you hated but couldn’t put your finger on why it was so bad, whatever Google spits out at random… I don’t care which.

I’ll post where in that article the media lied to you, either openly or through bad fact-checking.*

This should be amusing.

Aaaand Brandy starts us off.  I admit that she came up with an article more difficult than I’d first imagined, because I could see what was wrong right off but it was going to take a whole 30 minutes to look up the figures before I could lay out why.

Under any other circumstances, the strong profit reports companies have been delivering since early July would be delightful — probably sending investors’ hearts aflutter and the stock market on its merry way.

Emily counters with: O RLY?

In addition, neither European nor U.S. politicians seem to know what to do about daunting levels of government debt at a time when austerity measures could threaten what little growth there is.

That’s because there is no growth.  There is only government spending propping up GDP.  Do you remember when the Democrats threw a national fit about GDubya’s $400B deficit?  We’re more than quadruple that now, and crickets chirp.  If they hadn’t increased government spending by that much, not only would we not have “grown” at all, but we’d be recognized as experiencing economic depression.

Yet, with about 75 percent of U.S. companies having reported their earnings for the second quarter, corporate profits look good — definitely not the stuff of desperate times.

Emily counters with: Fuzzy Math.  Welcome to the world of “generally accepted accounting principles.”  It’s perfectly legal for companies to report positive earnings in a quarter where they experienced a loss.

Companies are growing their revenue too. Sales for the second quarter were up about 12.5 percent.

Yardeni notes that without the drag of financial companies, especially Bank of America, sales growth for S&P 500 companies would have been about 15 percent. Earnings are about 12.7 percent higher than a year earlier with financial companies and about 22.5 percent without.

Finance and telecommunications have been the only sectors with declining earnings year over year, according to Yardeni, and energy companies have been among the biggest gainers. Excluding energy companies, profits from S&P 500 companies reporting so far have grown about 8.5 percent, with revenue up 7.9 percent.

Oh, I doubt that.  I highly fucking doubt that.  Consumer spending is down.  So, corporations are experiencing great growth in sales, without those sales ever involving consumers.  How does that work, exactly?

Despite the good showing, the stock market has tumbled about 9 percent the past three months.

BAM!  Lights going off, alarms blaring… anyone who read this line and didn’t think, “Wait, what?” hasn’t been paying attention.  The market lost about 10% in two weeks.  Not three months.  Two weeks.  This is spin, of the “Remain calm.  All is well!” variety.

In the months ahead, companies might feel less pressure from commodities.

Ahaha, good one.

* Remember the statistic about 32 million uninsured Americans, and how I blew that out of the water with about an hour’s research?  Yeah, you’d be surprised how often “statistics” are nothing more than someone in the news spouts some number and then everyone else repeats it.

Advertisements
Published in: on August 7, 2011 at 11:26 am  Comments (2)  

The URI to TrackBack this entry is: https://emilyhemingway.wordpress.com/2011/08/07/challenge-me/trackback/

RSS feed for comments on this post.

2 CommentsLeave a comment

    • Ha! Okay, more subtle than a lot of them, but give me a few minutes to get the corroborating links and we’re golden.


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: