The Five Dumbest Things on Wall Street This Week

1. Disney's Problem Has Minnie Solutions

Disney's (DIS Quote - Cramer on DIS - Stock Picks) board said this week that the search to replace CEO Michael Eisner would be "thorough, careful and reasoned."

Which is, of course, where we come in.

Yes, it's time to announce the winner of the Five Dumbest Research Lab's latest reader contest: "Who Should Be Disney's Next CEO?"

But before we reveal the lucky winner, let's run through some of the runners-up.

Eisner detractor Steve Jobs, CEO of Apple (AAPL Quote - Cramer on AAPL - Stock Picks) and Pixar (PIXR Quote - Cramer on PIXR - Stock Picks), was a popular choice.

So was Donald Trump, or one of his Apprentices.

Martha Stewart came up a lot; under her regime, says Jarret Blum, attractions would include "Space-Savers Mountain" and "It's a Small Cell After All."

Other CEO candidates emerged from the presidential campaign: George W. Bush, for example. John Kerry. Ralph Nader. Michael Moore.

With no one suggesting John Edwards, maybe it was bipartisanship that made Dick Cheney an oft-mentioned nominee: "If that man doesn't scream 'cuddly' and just embody the magic of Disney, I don't know who does," wrote Chris DiPasquale.

Cartoon characters were all the rage, too: Mickey Mouse. Minnie Mouse. Scrooge McDuck. Dan Rather. ("He has exhibited a Pinocchio-esque gift for telling tall tales," says Dennis Craddick.)

And our winner?

Reader Carol Ames wins the prize with her nomination of Russian President Vladimir Putin, who last week proposed measures eliminating popularly elected governors and increasing his hold on Parliament.

V-l-a, d-i-m... We have a winner

Were Putin to replace Eisner, "Disney employees would suffer less centralization of power and less micromanagement," writes Ames. "Disney stockholders would have someone with a better regard for the voting process."

2. The Saucier's Apprenticeship?

What's nuttier: Martha Stewart hiring Survivor creator Mark Burnett? Or Wall Street ascribing any value to the deal?

On Wednesday evening, see, Martha Stewart Living Omnimedia (MSO Quote - Cramer on MSO - Stock Picks) said reality-TV guru Burnett will advise and consult with the company, in part to develop a prime-time network TV series featuring Martha Stewart.

Everyone involved has high hopes, of course. "This is exactly the kind of 'creative entrepreneurialism' that our audiences and distributors expect from us," said MSO CEO Sharon Patrick. Uh, we guess so -- though we remember that Martha Stewart's last notable piece of creative entrepreneurialism landed her a five-month vacation from her seven lively cats.

Burnett, meanwhile, praised Stewart's "impeccable good taste" -- the same way, we suppose, that a lion might praise an antelope's healthy-looking body before ripping it apart with its teeth.

And the market went crazy. On Thursday, MSO's shares jumped as high as 18% on the news, settling in at $17.03, up $2.05.

Certainly people are free to believe that Martha Stewart's company is worth more than where it was trading Wednesday, but we just don't see the synergies here. Burnett's genius, demonstrated in shows such as Survivor and The Apprentice, is in ripping the veneer off of polite society to reveal the feral backstabbing below the surface.

I Will Survive Martha meets reality TV

Martha Stewart's genius, however, lies in the opposite direction -- taking awkward, angst-seething social events and applying the veneer of polite society. From hand-made wedding invitations to Christmas cookies, she's all surface.

Who would want to watch a show about uncovering the ugly realities behind the Martha Stewart mystique? All those killjoys, probably, who can't wait to explain how some magician really didn't saw a woman in half. Or folks who tune into Discovery looking for a documentary about how sausage gets made.

So put Burnett and Stewart together and what do you get? We're guessing it's a press release, dated a year from now, that alludes to "creative differences" between the two.

3. A Poem as Lovely as a Consent Decree

On Wednesday, the Securities and Exchange Commission accused Computer Associates (CA Quote - Cramer on CA - Stock Picks) and three former top executives of cooking the company's books from 1998 to 2000.

Which means, of course, that we've got another entry for our Dictionary of Alleged Accounting Fraud.

Yes, as we have written before, you can't have an alleged accounting fraud without having code words for that alleged accounting fraud.

You don't want alleged co-conspirators going around saying, "Hey, Bill, can you help me out with the alleged accounting fraud today?"

It's cumbersome to say all that. Plus, it's an uncomfortable reminder that you are, indeed, allegedly committing accounting fraud.

Earlier entries in our steadily expanding dictionary of alleged terminology, to refresh your memory, include "fairy dust," sprinkled on HealthSouth's (HLSH Quote - Cramer on HLSH - Stock Picks) books; "hardness," indicating number-goosing reserves at Nortel (NT Quote - Cramer on NT - Stock Picks); and the quarterly ritual known as "close the gap" at WorldCom, now MCI (MCIP Quote - Cramer on MCIP - Stock Picks).

Computer Associates' new contribution to this dictionary is the expression "35-day month."

That, says the SEC, was how some CA employees referred to a key part of CA's alleged strategy for meeting Wall Street's sales expectations for a given quarter: improperly booking certain sales in that quarter even though the sales actually closed in the early days of the following quarter.

In its complaint, the SEC describes a methodical process, after the close of several quarters, in which CA personnel backdated contracts, used misdated documents and pressured salespeople to close sales that could be used to juice the prior quarter's numbers.

Calendar Whirl CA scores a big month

The 35-day month. We like that. A lot. And because we were recently reading the poetry of Ogden Nash, we were inspired to write a rhyme on the subject. Here goes:

Thirty-five days have September,
March, June and December.
Gosh, there's loads of drang und sturm
At quarter's end in a software firm.

4. I Think That I Will Never IAC...

We at the research lab are never wrong. We're just early.

For the latest evidence of that, let's turn the clock back to November 2003, when the research lab called attention to a puzzling situation at Barry Diller's InterActiveCorp (IACI Quote - Cramer on IACI - Stock Picks) (the name of which has since been changed to the infinitely more mellifluous "IAC/InterActiveCorp").

What in heck, we wondered, were John Malone and Dob Bennett -- Liberty Media's (L Quote - Cramer on L - Stock Picks) chairman and CEO, respectively -- doing on IAC's board of directors?

Sure, Liberty is a major shareholder of IAC's. But, as we pointed out, Liberty had just taken majority control of home shopping giant QVC. And QVC, of course, is the chief rival of IAC's own HSN home shopping network.

IAC, however, was comfortable with having the QVC folks hanging around -- an attitude that struck us as a little odd. "The guy who owns Macy's is happy to have the guy who owns Gimbel's on his board," we wrote. "Huh?"

Fast forward to last Friday, when IAC announced that Malone and Bennett had resigned from IAC's board. "Because QVC was acquired by Liberty, and QVC and Home Shopping Network, a subsidiary of IAC, are in similar businesses," said IAC, "IAC and Liberty agreed it would be best for Dr. Malone and Mr. Bennett to resign to avoid any potential antitrust or other regulatory concerns."

Oh. Now they tell us.

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