While increases in earnings are common, we identify a setting in which they signal a separating equilibrium. Firms that “defy gravity' (DG) by reporting increases in earnings despite experiencing a decline in sales from continuing operations, signal their viability as a going- concern, and...

Financial economists treat volatility as a function of investors' responses to new information. They generally presume that if an asset class is more volatile in one geographical region than in another, it is attributable to a difference in either the local version of the asset class or the...