IN THEIR documentary “The Vietnam War”, Ken Burns and Lynn Novick, the directors, dwell on the flawed information that American politicians got from Indo-China. The generals on the ground focused on the “kill ratio”, or the number of enemies killed per American or South Vietnamese soldiers killed. That bore no relationship to victory—North Vietnam quickly replaced its dead soldiers. And it corrupted behaviour, leading American troops to embellish numbers and count dead civilians as “wins”.

The curse of rotten information can strike companies, too. That seems to be the case with General Electric (GE), which has had a vertiginous fall. Its shares, cashflow and forecast profits have dropped by about 50% since 2015. On January 16th it disclosed a huge, $15bn capital shortfall at its financial arm due to a revision in insurance reserves. And on January 24th it revealed a $10bn loss for the fourth quarter. In its core industrial arm, returns on capital have sunk from 20% in 2007 to a puny 5%...Continue reading