Target and Home Depot - "Beat by a Penny!"

Tuesday, August 18, 2009, 10:13 AM
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The gaming of our economic system and statistics is not the sole province of the government. Corporations have mastered the art as well.

Naturally, this is not much of a surprise, because with the government setting the tone for providing perpetually "better than expected" economic statistics, it stands to follow that corporations and Wall Street will gladly follow along.

Here are two separate examples from today to illustrate how the game is played. The game, for any new readers here, involves Wall Street analysts providing super-lowball estimates of earnings that a company can easily beat, and then trumpeting that result while conveniently glossing over the sordid details involving any worse-than-expected revenue shortfalls or accounting tricks used by the company to boost their earnings.


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