The Five Dumbest Things on Wall Street This Week

1. Shame Old Shame Old

We suppose the Securities and Exchange Commission deserves credit for addressing conflicts of interest facing analysts at Wall Street's brokerage houses.

Oh, about as much as our pet chihuahua deserves for reducing the crime rate on the island of Manhattan.

OK, maybe we're being a little too harsh about the rules the SEC approved Wednesday governing analysts' behavior. After all, there has been an awful lot of discussion of the matter in recent weeks (check out TheStreet.com's extensive coverage).

We're big fans of some of the disclosure mandates, for example. First off, there's the grade inflation and home-team advantage info. Banks will have to say what percentage of companies they cover are rated buy, hold and sell; furthermore, they'll have to disclose separate percentages for covered companies that also are investment banking clients.

Another goodie is that analysts writing about a company will have to provide historical graphs or charts indicating both the price of the company's stock and the points at which the analyst initiated and changed ratings and price targets.

Of course, that'll be just for amusement value. We're sure the SEC believes these revelations will shame analysts into getting their act together. Into calling them as they see them so future graphs won't embarrass them by trumpeting their bad calls.

But as critics such as Rep. Ed Markey (D., Mass.) have pointed out, a huge conflict-of-interest problem will remain as long as analysts' salaries are linked to the success of a firm's investment banking business -- even if the SEC prohibits linkages to specific deals.

Face it. By tying compensation to banking, no matter how vaguely, sell-side firms are making clear what they want from analysts: rainmakers and cheerleaders, not objective analysts willing to sacrifice their friendly relationships with covered companies for the sake of retail investors.

As for that shame thing? Come on. As the erstwhile bubbly market made clear, if you give a man a few million dollars extra in his paycheck for drumming up investment banking business, he can live with the humiliation of making a few bad calls.

2. Be Like Mike

Sure, The Wall Street Journal prides itself on being the newspaper of record for American business. Just be careful you don't rely on it too closely for pop-culture coverage.

We found that out this week, after we took a look at a charity auction the WSJ has been running on eBay (EBAY Quote). Over the past few weeks, the paper has been auctioning off the original drawings for what it calls "hedcuts" -- those pen-and-ink portraits of faces in the news.

Will the Real Mike Meyers Please Stand Up?!

Over the past month, we found no hedcuts on which we wanted to bid, but we thought we'd give it one more try in this, the final week of the auction, devoted to portraits of actors, musicians, writers and other participants in the arts.

So there we were, trying to figure out which of the drawings we could afford given the Research Lab's measly budget for interior decorating. Bruce Springsteen? We're big fans, but the bidding was already up to $272. For that kind of money, we'll fly to CMGI (CMGI Quote) Field to see the Rolling Stones. Bo Derek? She's cheaper at $53, but we have to waste too much time explaining to the junior staff who the heck she is.

One last name caught our eye, though: Michael Meyers. Hmm. Austin Powers. Wayne's World. A steal at $10.49.

But once we looked at his portrait, we wondered who was stealing from whom. Yeah, we know this Meyers guy has a wide range, playing everybody from a grossly overweight Scotsman to a big-haired talk-show hostess from Queens. Then we checked our spelling. No, this wasn't Mike Myers sandwiched between Demi Moore and World Wrestling Entertainment (WWF Quote) founder Vince McMahon; this was Michael Meyers, executive director of the New York Civil Rights Coalition.

A WSJ spokesman confesses, yes, the Michael Meyers on the site was not the Michael Myers they wanted to auction off. Here's a valuable lesson to all you budding art dealers out there: To succeed in this business, you've got to actually look at your merchandise, rather than just pick names out of a spreadsheet.

Of course, it's possible the Journal really wanted to sell a picture of yet another well-known Michael Myers: the crazed killer of the Halloween movie series. And it's possible that the top bidder for Meyers is a fan of the activist, not the actor; the anonymous bidder didn't return our emails.

But we did manage to make contact with Michael Meyers of the NYCRC, about whom the WSJ wrote a lengthy story in 1995. Once we explained the situation to Meyers, he said he wasn't offended by the mistake: "I'm just glad to know I'm in showbiz."

3. Speaking of Head Cuts

Yes, we know that company boards are getting strict with CEOs these days, but let's not go too far, shall we?

Job Cuts

That's our reaction to a press release sent to us Tuesday by reader Sara Hitchens. In the announcement, a little-known research firm explained what companies such as General Electric (GE Quote), Motorola (MOT Quote) and Hewlett-Packard (HPQ Quote) are evidently doing to clear space in the executive suite for the next generation of top talent.

The headline says it all: "Succession Planning's Missing Link: Execution."

Wow. I guess if you're serious about replacing your current CEO, you're serious. Maybe we should have guessed it from the research company's name: Cutting Edge Information.

4. Actually, Sometimes They Use AOL Instant Messenger

That's not the only eye-opening insight into the executive suite that we've picked up recently. Why, late last week we learned a little more about the outside-the-box leadership at AOL Time Warner (AOL Quote).

As Reuters reported late last week, CEO-designate Dick Parsons made it clear just how high the chain of command leads at the media conglomerate, where Steve Case is chairman and Bob Pittman soon will be sole chief operating officer.

God's on My Buddy List

"Steve is a partner and Bob is a partner, but ultimately [the strategy] has to be something the CEO can embrace and drive," Parsons said, according to Reuters. "I report to the board, and Steve is the chairman, and Steve reports to God."

Wow. Usually, the performance evaluations your supervisor gives you are pretty dull stuff. But the one He writes up for Steve -- now, that we'd like to see.

5. Self-Abuse at Penthouse

Let's say your job is sitting around looking at pictures of beautiful, naked women. How much can go wrong with that?

A lot, apparently. Just ask Bob Guccione, chairman of General Media, best known as the publisher of Penthouse.

As we learned from the company's most recent 10-K, things already were pretty ugly around the office. Circulation of the nudie mag and its affiliates has declined 50% over the past five years. In February, the company laid off a quarter of its employees. As of Dec. 31, the company had only $2.4 million in cash on hand, and its auditors expressed doubts about its ability to stay in business.

Anna

And then came this Anna Kournikova mess.

In a story that the New York Daily News has been attacking the way that short-sellers go after telecom equipment companies, Penthouse got into a wee bit of trouble after it published what it said were 12 photos of Kournikova not wearing her tennis whites.

Not Anna

Problem was, it turns out, the pictures weren't of Kournikova; instead, they're 5-year-old images of one Judith Soltesz-Benetton, a member of the Benetton clothing clan. One would think that after more than three decades of looking at naked women, Guccione could look above the neck and tell two of them apart. But no.

Both Kournikova and Soltesz-Benetton have sued Penthouse, says the News. Soltesz-Benetton wants $10 million for her pain. Penthouse says it's sorry. Soltesz-Benetton's lawyer says the apology is "three weeks late and $10 million short."

So don't be surprised if you see General Media up for auction on eBay sometime soon. Going concern, going concern, gone!