The Five Dumbest Things on Wall Street This Week
12/07/07 - 05:50 AM EST
Marek Fuchs
Digging a Hole You Don't Own
The homebuilders have been working hard all year to break new dumb ground, and recent days have been no different. The stock market is still digesting news that Lennar(LEN Quote - Cramer on LEN - Stock Picks) sold land to Morgan Stanley(MS Quote - Cramer on MS - Stock Picks) for a full 40 cents on the dollar. This is part of their new aim to become a "near assetless homebuilder" as one analyst put it, nodding approvingly as only an analyst can. Lennar investors, crying aloud for much of the year, were momentarily lifted by the shift in strategy. If, that is, you can call becoming "landless builder" instead of a landfull bankruptcy candidate "strategic" more than "comically desperate." Following the deal, analysts prattled on about an influx of cash and new business models (watch your wallet whenever anyone starts pontificating about a new business model). Meanwhile, more land writeoffs lurk, and market conditions still have all the charm of an unseen enemy.
Dumb-O-Meter Score: 82.
At least they didn't give away their land for free, though at 40 cents on the dollar, they are sure starting to travel down the road of music producers and newspapers.
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