1. I'm a Man of Wealth and Taste
Not that we're ever shy about patting ourselves on the back, but we at the Five Dumbest Things Research Lab are particularly proud of our work this week.
And why, you may ask, are we running the victory lap around the Bunsen burners? Why are the lab assistants dancing the hora in the break room?
Glad you asked. It's because, despite the hundreds of articles published this week about the resignation of
Securities and Exchange Commission
chairman Harvey Pitt, we managed to do some original research on the subject.
Yes, we guarantee that nowhere in the world have you read what you are about to read about Pitt. We stake our reputation on that claim.
As you likely know if you've read any article about Pitt in the last week or so, one of the accusations that dogged him is that he's politically tone-deaf. Though he's a high-powered lawyer and all, he has no clue as to how to make the right impression inside the Beltway.
Exhibit A in this argument, of course, is Pitt's alleged delay in disclosing to his fellow commissioners evidence suggesting that accounting oversight board nominee William Webster couldn't properly oversee a single company's books. Considering that the accounting board is supposed to oversee the books of every publicly traded company in the nation, no doubt the other commissioners would have wanted to chew that news over before they voted on Webster's appointment, not after.
Anyway, what we at the research lab have uncovered is Exhibit B: evidence of Pitt's haplessness when it comes to proper functioning in Washington. And here's the delicious thing about the evidence: It's right there in plain sight. Millions of people, including yourself, probably saw it. And nobody noticed it but us.
In fact, you don't have to read too far down in
his resignation letter to see the proof of Pitt's shaky political bearings. The first four words will do: "My dear Mr. President:"
"My dear Mr. President"??? What's with that? Who writes "my dear" anybody in a letter anymore, except the occasional proud grandma in a note to her grandson? To us, that seems like a strange way to open a letter to the president.
But, we being researchers and all, we decided to check.
First stop was the State Department's
Office of Protocol, the government's official politeness authority. What, we asked, was the proper salutation for a letter to the president of the United States? "Dear Mr. President," replied the woman at the other end of the line. Not "My dear Mr. President"? we asked. After some consultation with others in the office, she reported that no one was familiar with that salutation. "It may very well be an old style," she said.
Hmm. The Bush administration has been around for barely two years. We decided to seek a more seasoned authority: etiquette expert
Letitia Baldrige, White House social secretary during the Kennedy administration. "It used to be proper to write 'My Dear Mr. President,' but that is now dated," Baldrige emailed us. "The proper salutation at present for the incumbent is: 'Dear Mr. President:'"
That seemed authoritative. But once we got on the subject, we just couldn't stop ourselves. So on we went to one last expert, Molly Raiser, chief of protocol during the Clinton administration. "The only salutation that's appropriate is 'Dear Mr. President,'" a Raiser spokesman told us after consulting with her.
"'My dear Mr. President' would be used to write to someone who is not the president anymore
and who is a personal friend," continued Raiser's spokesman. "So, for example, Ambassador Raiser could write to former President Clinton and say, 'My Dear Mr. President.' But 'Dear Mr. President' is the correct salutation for a sitting president."
Well, you read it here first. Harvey Pitt is so out of touch with Washington, D.C., that he can't even write a resignation letter without screwing up.
2. Wish You Were Here. Or, at Least, Your Bed.
All you business travelers out there, we know how it goes. After a long day on the road, you call your spouse or domestic partner from your hotel room. "Miss me, honey?" asks the spouse. "Sure I do," you reply.
You big, fat liar, you.
Yes, we know you're lying, thanks to a press release we received Thursday from a unit of paper goods and personal care manufacturer
The point of the press release, as far as we could tell, was to explain how a Kimberly-Clark survey of 618 travelers definitively proves that hotels should stock high-quality toiletries from companies such as Kimberly-Clark.
But the real good stuff in the survey was the response to Kimberly-Clark's question about what people missed the most when they stayed in a hotel. Thirty-six percent of respondents said they missed their own beds. And how many missed their family? Sixteen percent.
Well, that's a scary thought. A lot of business travelers out there miss the marriage bed, we conclude. They just don't miss the marriage.
3. Liberty's Inside Job
Speaking of bedfellows and corporate oversight, we couldn't help thinking this week about
You remember Liberty, the media company with stakes in the Discovery Channel and other programming. The chairman of Liberty is John Malone, the head of onetime cable colossus Tele-Communications Inc., which Malone sold to
a few years back.
The reason we have Liberty on our minds these days, bedfellow-wise and corporate oversight-wise, is the announcement the company made a few weeks ago about a new director being added to the company board.
What with companies so eager these days to implement good governance practices and establish independent, strong-minded boards, we wondered whether Liberty might join the parade and appoint a paragon of independence to its board.
Then we saw the name of the new board member: Kim Magness.
Then we laughed a little.
See, whatever your definition of independent director is -- and the
New York Stock Exchange
is in the midst of rejiggering its own definition -- Kim Magness likely wouldn't be the first person to come to mind, as far as Liberty is concerned.
Of course, Magness is a major Liberty shareholder, and that is a good reason for him to show up for board meetings. But as for independence, well, one problem is that he has granted Malone an irrevocable proxy to vote his Liberty shares, as a Liberty spokesman confirms. Plus, he happens to be the actual son of the late Bob Magness, the father figure who hired Malone to run TCI back in 1973.
This got us thinking about the rest of Liberty's nine-member board, which doesn't exactly inspire you to scream the word "independent."
In addition to Malone and Magness, there are two Liberty corporate officers on the board, Dob Bennett and Gary Howard. Then there's Jerome Kern, formerly chairman of a Liberty subsidiary and the beneficiary of a $19.2 million, two-year revolving credit line guarantee from Liberty. And Larry Romrell, a longtime TCI employee -- one who, according to
, a Malone biography published last month, was castrating calves with Malone back in the 1970s.
The three remaining directors on the board, according to the Liberty spokesman, are independent. These independent directors include Donne Fisher, a longtime TCI executive and an executor of Bob Magness's estate. After the estate sold TCI a major stake in the company, Kim Magness sued Fisher, complaining he had given Malone a sweetheart deal for the shares; the suit was later settled.
Another independent director is Paul Gould, a banker at Allen & Co. The firm, acknowledges Liberty, has worked for "some of our acquired subsidiaries."
reports Gould was TCI's longtime adviser and was a frequent sailing buddy of Malone's.
Mark Robichaux, the
Wall Street Journal
editor who wrote
, explains Liberty's board in the context of the cable TV industry out of which Malone emerged. "The cable industry has been an extremely insular business," Robichaux says. "The history of it is the history of a brotherhood, almost, of entrepreneurs who all shared the same dream, which was to wire the county."
Malone has pretty much operated the same way for years, says Robichaux. "This is our strategy," as Robichaux paraphrases the approach. "You're either with us or against us. And those of you who want to come along with me, John Malone, and make money, climb aboard. And if you disagree with us, don't buy the stock."
Says Liberty's spokesman, "We will evaluate any new rules that are promulgated by the NYSE. However, we are currently in compliance with their requirements for independent directors and we will, obviously, maintain compliance if new rules are set forth by the NYSE."
4. Put on Your Rally Gaps
Ever since we wrote last month about
impressive financial streak, we were getting all excited about going along for the ride.
So what happened Thursday? The streak runs out of gas.
By "impressive financial streak," of course, we meant Gap's epic record of poor results: the retailer's 29 straight months of declining same-store sales, or sales in stores open at least a year.
Yeah, just as we were thinking how fun it would be to follow the streak through its third anniversary at least, Gap felt compelled to announce Thursday that same-store sales at Gap, Banana Republic and Old Navy were all up from a year ago -- 11% in aggregate.
We're happy for the people at Gap, we suppose. But we do feel cheated. Sort of like the DiMaggio fans who bought tickets for Game 57.
5. United We Fall
Pop quiz: Suppose you've got a big stake in a company that's wandering close to bankruptcy. Then the people in charge of your portfolio decide to sell some of those shares, under the philosophy that it might be a good idea to diversify your portfolio. What's your proper response?
Thank the responsible parties.
Thank them and send them a gift basket in December.
Kiss them at the first possible opportunity.
Well, if you're a United Air Lines pilot, the answer is
D. Throw a temper tantrum.
Yes, a scant few months after employees of
( ENRNQ) saw their company-stock nest eggs go to zero, United pilots are complaining that
State Street Bank
, the trustee of United parent
employee stock ownership plan, wants to sell about 20% of the UAL shares in the ESOP.
reports, the chief of United's pilots union thinks selling the stock is a rotten idea.
Yeah, we understand that the pilots want to share in the upside of United's stock, if there is any. And we understand that the ESOP's sale of the stock might look bad in the market.
But is the sale "irresponsible," as the union accuses? Maybe the former employees of WorldCom and Enron should answer that question.
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