The story everyone is hiding…

If you stop what you’re doing right now and take a look at the current economic environment right now, you’ll likely see story after story about overall positive earnings and strong growth potential.

And sure, you can make it look that way by presenting information a certain way – but that requires you to hide the real story.

It’s time to cut through all the bull and get to the truth. When we do, you’ll see for yourself what’s waiting for you on the horizon, and it should scare you…

Throughout this article I want to highlight four major issues that are being hidden with false reporting, bad analysis, and a manufactured market:

1. Stock buybacks

There’s something awe-inspiring about the silly behavior of some of the biggest companies in the world…

Just think about this:

We all know that the Fed still has interest rates at near-zero. Well, companies are using those low rates to borrow money…and then buy back stock of in their own company!

That insanity is giving the false picture of growing earnings AND adding debt to company balance sheets.

To put it simply, this practice of stock buybacks is insane.

2. The broken earnings system

The next piece of this terrifying puzzle is the entire cycle of earnings season. So-called “experts” are given the task of making earnings forecasts for companies. If Company ABC meets or beats those forecasts, it’s considered a positive earnings report.

The problem here is two-fold.

First, instead of trying to get earnings estimates right, analysts are taking the numbers companies give them – which shouldn’t be trusted in the first place – and plugging them into spreadsheets in order to come up with their projections.

Second, it doesn’t seem to matter whether the actual earnings report itself is good or bad. The only thing people seem to care about is if it beat the earnings estimates. So if a company was projected to have a horrible report and it ends up with just a pretty bad one, it will be viewed as a positive report overall!

How dumb is that?

3. Artificial earnings

The companies themselves will artificially enhance their earnings reports by doing two things:

First, they don’t count one-off costs as part of their official projections because they aren’t “reoccurring costs”, no matter how large it is.

And second, in an attempt to beat cash flow expectations, companies will delay paying their suppliers.

In essence, their hiding certain numbers from their reports.

4. Corporate earnings

This is what drives the economy and the stock market. That’s why you’ll barely see any divergence when you draw a chart of corporate earnings alongside the major market index…normally.

That correlation hit a wall when The Federal Reserve began inflating the current market in an attempt to keep the White House for the Democratic party.

At that point this year, you can see corporate earnings (the real number) turnover and begin falling while the stock market (the Fed-manipulated one) has been propped up into a holding pattern after hitting a new high.

Believe me, I’m not giving you all of this information because it does me any good for conditions to be deteriorating. It doesn’t. In fact, life would actually be much easier for me if earnings were actually booming.

But it’s my obligation to give you the facts necessary to position yourself to benefit from what’s to come. When the election concludes and the Fed no longer has a pressing reason to prop up the market, it will be time to be scared…