How Wall-Street Hocus-Pocus Inflates S&P 500 Revenues

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How Wall-Street Hocus-Pocus Inflates S&P 500 Revenues
by Wolf Richter • May 9, 2016


[font color="blue"]But even the well-oiled machine couldn’t hide the decline.[/font]


Despite what you might think, there’s a difference between our financial markets and casinos in Las Vegas: casinos aren’t rigged.

In a casino, the odds are officially against you. You know what they are, and you subject yourself to them – statistically speaking – to lose money … while having a blast.

Wall Street on the other hand has become an ingenious hocus-pocus machine where even the most taken-for-granted and often-cited data points are systematically inflated. Yet this particular trick – one of many – is perfectly legal. It’s how it is supposed to be done. And that makes it even more insidious.

The S&P 500 companies account for about 75% of the US equity market capitalization. So when aggregate revenues of the S&P 500 companies rise or fall, it’s an important indicator as to what is happening in the US business scene. It’s also a gauge of the global economy since many of these companies derive their revenues from around the world. So we pay close attention to it. ................(more)

http://wolfstreet.com/2016/05/09/wall-street-inflates-sp-500-revenue-growth/