Companies are rigging their earnings reports to make it look like general economic conditions are better than they actually are, but savvy investors are no longer being duped by the scam, writes Bill Fleckenstein on MSNMoney.

"It's beat-the-number season when corporate earnings are reported," the president of Fleckenstein Capital hedge fund writes. "Let's look at what a game it is."

Fleckenstein notes that several months ago, General Electric Co. claimed it would abandon the practice of giving guidance to investors and analysts. GE reaffirmed this new position when it reported second quarter results.

"I think that is a potentially important development, at least if one would like to see the investment business become more about thought, research, and managing risk, rather than hype, momentum, and gamesmanship," writes Fleckenstein.

Fleckenstein notes that the hype and hucksterims reduces Wall Street to "some sort of video game."

But, he reckons that GE's new commitment to earnings abstinence is going to cause other companies to come clean, stop the game playing, and rethink how they communicate with investors.

"GE — led by Jack Welch — played and perfected that game as well as anyone, though it ultimately blew up in the company's face," writes Fleckenstein.

Fleckenstein thinks that IBM may become the "new GE" in terms of how it reports its earnings.

"IBM saw its revenues do worse than expected again," writes Fleckenstein.

But, he noted, IBM was able to "do far better than folks had expected on the earnings front. Even though it saw revenues fall 13 percent year-over-year, paced by hardware sales dropping 26 percent, year-over-year earnings per share somehow miraculously rose 18 percent from the same period a year before."

Fleckenstein thinks there may be some weird sort of arbitrage going on at IBM, and, whatever the case may be, investors should be wary of the "positive" earnings from Big Blue for the forseeable future, at least until it alters the kind of guidance it gives investors.

Others seem to agree with this savvy view.

Barron's magazine reports that "there have been plenty of corporate earnings reports to 'muddle' through, including better-than-expected results from Apple, Starbucks and Boeing ..."