Everyone does it.

Announces sales figures., as if sales are the only figures that matter.

Amazon just announced that they had a 41% increase in sales! Billions of dollars!

I read the announcement. Not once in the entire article is the word "profit" actually used. Instead they use, to me, weird terminology like "free cash flow," and the ever trusty "net" income. Is this net income after cost of goods? Is it net after cost of goods and operating expenses? Why isn't the word profit used? Maybe cause legally you can't use it unless you actually had one?

I can't tell through all the gobbledeekgook whether Amazon actually made any money. Since they sold Harry Potter for cost, I kind of doubt it.

Let me tell you a secret. Sales don't really mean anything, without knowing the costs. I'm always amazed by how often the public is fooled by this. Even banks and the stock market often seem mislead by this. Announce sales figures with a huge fanfare. Later in the week or month mention those pesky costs in a low key manner. Hiding those costs under weasel words and lame explanations. But look at those SALES!

The other trick I see constantly is comparing sales from one month to the other. That is, making a fanfare when sales are higher, hardly mentioning when they are lower. I tell you what, a great depression could set in between May and July, and my July sales would still be higher. Seasonality is that important.

Pay no attention unless they compare year to year, September. to September. Apples to Apples.

No one mentions inflation, because we supposedly have that under control. Yet Magic cards have gone from 3.29 to 3.89 in the last year or so, comics are averaging over 3.00 from 2.75 last year, and so on. Sales increases of 3 to 6% probably only mean you're keeping even.

I always read Trading for the Masses entries on Bendblogs, where he gives us revealing snippets from other news sites, and try to figure out all the jargon, and I just know that the damn jargon is hiding most of the real truth. I find it fascinating what is included and what is left out, but the common denominator is the crazy spin.

What brings about these musing is this:

The rumor is that a big builder, one that moved here from the valley a few years ago, is about to go Chapter 11. This hasn't been confirmed, so I won't use the name. If true, all the bubble busters will be crowing. It would seem to be confirmation of all we've been saying.

But it's too soon. If this guy is already cracking, he had to have been insanely self-delusional and over-extended to go down this quickly. In fact, I would suspect he was probably already in trouble before he even got here and tried to spend his way out of trouble. Still, this guy was announcing positive sales figures not too long ago.

I figure -- obviously!-- that most of the housing news is being stage managed. We're being given the news and the figures in a way that is spun to look most positive. I know, for instance, that I could easily arrange to put some sales into one month instead of another, some costs into one month instead of another. There is nothing illegal and unethical about it, just a bit of management. I could easily increase sales dramatically between now and Christmas simply by ordering much more material. Since I wouldn't have to pay for most of it until after the holiday season, I could have a damn fine year. Of course, next year would be hell. But, let's say I'm a middle manager that is moving on next year; or let's say, I figure that there is going to be a ton of bad news next year from all the other stores and I can just join them. Or I figure I can try to make up for it in the second half of next year. And so on....

I don't bother because I try to be reality based, I have no stock-holders to please, and I don't see any reason to try to play with the figures.

Merril Lynch recently announced a huge drop. A week or so earlier they had hinted that it was going to be bad, but when the figures came out, they were worse. The explanation: they decided to dump a bunch of the bad debt into this announcement, to clear the decks. Hell, if they were going to take a hit, might as well get all the bad news out at once.

I suspect we'll see a lot of this. Which will suddenly make everything look very, very dire. It's just stage management, and what it means to me is -- they were withholding the bad news for as long as possible, and now that they can't spin it out any longer, they are going to really dump the bad news. The bad news is real, has been there all along, and the fact that they are finally revealing it means they know that it isn't going to turn around any time soon.

This is going to take a long time to play out.