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The 5 Dumbest Things on Wall Street This Week: Jan. 27

3. Martha vs. Macy's

Martha! Martha! Martha! There is just not enough Martha Stewart to go around.

On the other hand, if you ask the lawyers for Macy's (M - Get Report), perhaps there is a bit too much of the Domestic Diva out there.

The department store chain filed a lawsuit Monday against Martha Stewart Living Omnimedia (MSO - Get Report) in an attempt to break up a licensing deal between the housewares company and Macy's competitor J.C. Penney (JCP - Get Report).

Back in December, Penney paid $38.5 million for a 16.6% stake in MSO and announced plans to open mini-Martha Stewart shops in its stores. Macy's says Martha's deal with Penney violates the terms of her so-called exclusive agreement with Macy's to sell Martha-branded items at its outlets.

Um, excuse us for asking, but what on earth did the folks down in Plano, Texas think was going to happen when it tried to muscle into Macy's territory? Did CEO Ron Johnson really think his company's arch-rival would stand idly by and let him steal their hot property?

Boy, for a guy who made his bones at Apple and Target (TGT), he sure was off-target on this one. We can't wait to see his next big move -- provided he escapes from this legal mess.

And speaking of legal messes, Martha Stewart herself is anything if not well-acquainted with the law (wink, wink), and she also should have known that the Penney deal would prove troublesome with her old buddies at Macy's.

And after her nasty split with Sears Holdings (SHLD) in 2009, one would think Martha would prefer to remain more tightly aligned with the upscale shoppers at Macy's as opposed to the more pedestrian purchasers at Penney.

Alas, that does not seem to be the case. Or at the very least Martha does not seem to care at this point.

Stewart seems completely sold on Ron Johnson's vision, or, more likely, the vision of $200 million in royalties and licensing fees she will collect from him over the next 10 years. And that's money she could really use considering her company has not booked a profitable year since 2007.

So back off Macy's! Business loyalty and brand dilution be damned! The one and only Martha Stewart says you can indeed have too much of a "good thing" ... or at least she can.

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