The Five Dumbest Things on Wall Street This Week

George Mannes

1. Turning Over a New Chief

Once again, the Five Dumbest Things Research Lab plunges into an area of study where few other social scientists dare to dabble: the collective wisdom of press releases.

It all started Wednesday when we read a press release from DirecTV Latin America, part-owned by DirecTV parent Hughes Electronics (GMH - Cramer's Take - Stockpickr). In the release, the struggling DirecTV LatAm disclosed several measures it was taking to salvage its precarious financial position. But the one that caught our eye was the naming of one Michael A. Feder as the company's chief restructuring officer.

Chief restructuring officer! That's a new one, we thought. And a sign of the times, too. Among your so-called C-level positions, you have your classic chief executive officer, chief operating officer and chief financial officer. But as we learned only Tuesday from a Wall Street Journal article, in the 1990s, companies rushed to appoint "chief knowledge officers," only to dump them once times got hard. Just as the rise and fall of the chief knowledge officers seems to say something profound about American business, could the debut of the chief restructuring officer mean something profound as well?

Time to do some work, we thought. With the aid of Dow Jones Interactive, we started sifting through press release wires to see what's going on with all the chiefs.

Check the chart for some of our key research findings.

Officer! Officer! Frequency of mentions of lesser-known corporate chiefs

Source: Dow Jones News Retrieval

The first thing we learned was that the post of chief restructuring officer is not a new one. It first shows up in the archives in the summer of 1991, in the context of a reorganization of then-struggling Canadian firm Algoma Steel.

Then we got the idea of charting the rise and fall of different chiefs over the past five years -- specifically, counting the number of press releases each year that mention a chief whatever officer. We figure that press releases reflect some meaningful combination of what corporations think is important and what corporations think people think is important. In other words, they're a half-decent, deadline-friendly barometer for gauging what's important in the business world.

At first glance, the Journal is right: chief knowledge officers are a bull-market phenomenon. But we at the Lab caution you that their dramatic rise and fall between 1998 and 2002 isn't quite so dramatic when you compare them to our control groups of CEOs, COOs and CFOs, all of which peaked in 2000. Since the number of press releases mentioning, say, chief executive officers rose and fell over that five-year span (going from 67,000 annually to 87,000, then ending at 64,000), we're assuming that some of the chief knowledge officer volatility is simply a function of corporate press office staffing levels.

More interesting to us is the fate of chief privacy officers, of which there were none in 1998 and only five in 1999 (actually, just one, but he starred in five different releases from his employer, the now-defunct AllAdvantage.com). The chief privacy officers hit their peak in 2001, a year after everyone else; perhaps because Internet privacy paranoia was a more powerful phenomenon than the collapse of companies that posed a conceivable consumer privacy threat.

But the most fascinating trend is that of our old pal, the chief restructuring officer. Chief restructuring officers show no signs of slinking away. For reasons you don't need to be a research scientist to figure out.

2. Can't Stop the Muzak

How much longer, we ask you, will it take to completely drain all meaning out of the music of our youth? To convert it into nothing more than a commoditized prop for commerce?

Oh, about five more days, at this rate.

As the Research Lab has already indicated, 2002 was an ignominious year along this front. The Clash's 1979 landmark London Calling sold Jaguars for Ford (F - Cramer's Take - Stockpickr). The Rolling Stones started hawking E*Trade (ET - Cramer's Take - Stockpickr) IRAs on their concert tour.

And 2003 has hardly begun, but the alarming trend continues. Corporate music distributor Muzak announced last Friday it was supplying "custom music programming" to the Hard Rock Hotel at Universal Orlando -- specifically, to the "entranceway, lobby, pool and other common guest areas." Hard Rock Cafe International, by the way, is a subsidiary of the Rank Group (RANKY - Cramer's Take - Stockpickr).

Let the Muzak Play Hard Rock Hotel's new music solution

"In developing a soundtrack for the Hard Rock experience," explains the Muzak press release, "the hotel was faced with the challenge of expanding the core music library that is used in Hard Rock Cafes worldwide, while achieving greater versatility and control to meet the needs of the highly dynamic environment at the Hard Rock Hotel Universal Orlando."

Adds the hotel's general manager, "We were looking for a music solution that would maintain the integrity of the Hard Rock Cafe brand image, while making it even more effective in capturing the Hard Rock Hotel experience."

Wow. A "music solution." The "Hard Rock Cafe brand image." The challenge of "achieving greater versatility and control." A "highly dynamic environment."

If all that remains of our teenaged angst is a music solution, we vote for the music problem.

3. So It's Just a Myth that Bookish Intellectuals Have No Friends. Right?

If you've dropped your membership in the Quality Paperback Book Club, the QPB wants you back.

Whether it wants you all that much, however, isn't quite so clear.

So we conclude from a brochure passed our way by Research Lab correspondent Jack Boren. A former member of the QPB -- operated by Bookspan, a venture of AOL Time Warner (AOL - Cramer's Take - Stockpickr) and Bertelsmann -- Boren recently received a direct mail piece begging him back into the fold. The bait? Not just 4 books for $4, but a free gift, to boot: a "handy electronic organizer."

Pretty cool, thought Boren. A combination calculator, phone directory, clock and electronic memo pad, loaded with 688 bytes of memory.

Losing Your Memory A deal that really bytes

Wait a second. 688 bytes of memory? Why, that's in the neighborhood of, say, 688 characters. OK, maybe 1,376. Or even 2,752. That makes it the equivalent of 550 words, max. About enough space to store an article about chief knowledge officers. Or 17 names and phone numbers. But not both.

QPB never got back to us to explain whether 688 bytes was a real selling point or just a typo. Or maybe our contact information got lost in a sea of 16 other names.

What Is NTAP's Plan?

You'll recall that last month we came down hard against corporate-sponsored poetry, specifically a variation on a verse from J.R.R. Tolkien's Lord of the Rings -- a version promulgated by Network Appliance (NTAP - Cramer's Take - Stockpickr).

We thought we'd leave it at that. Until, that is, we received some correspondence from librarian Melinda Kent. She chimed in with an additional insight into NetApp's poetry, which substitutes "one unified storage platform" for the "one ring" that's the subject of Tolkien's original.

"Has anyone pointed out to NTAP," writes Kent, "that the 'One ring to rule them all' rhyme was written by Sauron, the lord of evil, as he was gloating about his dominion over the entire earth? Or is this, in fact, NTAP's plan?"

Now, we couldn't quite verify that Sauron, according to Tolkien's saga of Middle-earth, wrote the whole verse. Maybe it was just a few key lines.

But we get the idea. And all we can say is, no, we didn't ask NetApp if dominion over the entire earth was the focus of its plan. What's the point? If world domination were the goal, would NetApp really tell us?

5. I'm Not a Qualified Investor, but I Play One on TV

On Tuesday, investors in a hedge fund run by Kenneth Lipper went to court to fight over what money is left in the hedge fund he's liquidating.

Well, so much for our surefire investing strategy.

See, we've always thought that the best place to put our money is where the celebrities are. Like Planet Hollywood. Debbie Reynolds Hotel & Casino.

But now that Lipper Convertibles is closing down, amid accusations of mispriced assets and other mishegoss, we're forced to rethink our investment approach.

After all, Lipper's investors included Today host Matt Lauer, movie stars Julia Roberts and Liam Neeson, film producer Jerry Bruckheimer and artist Frank Stella. Not to mention -- whoa, get this -- Hard Rock Cafe founder Peter Morton. (Go figure.)

Yes, time to start investing in Beanie Babies.

---