Generally Accepted Accounted Principles (GAAP).
According to Investopedia: "GAAP are imposed on companies so that investors have a minimum level of consistency in the financial statements they use when analyzing companies for investment purposes. GAAP cover such things as revenue recognition, balance sheet item classification and outstanding share measurements. Companies are expected to follow GAAP rules when reporting their financial data via financial statements. If a financial statement is not prepared using GAAP principles, be very wary!"
Let's keep those guidlines in mind as we discuss Microsoft's (MSFT) earnings last night as they are a fine expample of the kind of BULLSHIT that is permeating the market these days. MSFT's GAAP Revenue was $20.6Bn and GAAP Earnings were 0.39 per share, missing by a mile but, after adding back "Windows 10 deferrals to revenue" and "impairment, integration and restructuring charges", they are able to boost their non-GAAP reported earnings to $22.6Bn and that extra $2Bn of revenues, which were actual expenses but have been erasted from the report, drops straight to the non-GAAP bottom line and almost doubled non-GAAP earnings to 0.69/share – a nice beat!
And that's not the end of it as MSFT also made non-GAAP (non-Generally Accepted) adjustments to their taxes and reports that they will only pay $225M on $3.3Bn in earnings (7%). We can be outraged about this on many levels but the earnings weren't real so it's really not fair to expect them to pay taxes on their fake earnings, is it? It is, however, "fair" to expect invesors to pay $55 for the stock this morning, up from $53 yesterday based on all these fake earnings. After all, the investors are just suckers, born every minute and growing up to hold the bags.
Microsoft is part of the Big Con, which is moving the whole market to all-time highs. It's a significant stock on all the indexes so it will lead us higher this morning – even as the broad market continues to sell off as the big boys run for the exits during this "rally". By holding up just a few large-cap stocks, the Fund Managers and Banksters can cover their tracks as they sell off the rest of their holdings – all the while…