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The Five Dumbest Things on Wall Street This Week

Sumner breeze; Mayor McCheese; another setback for Slytherin House; Bankruptcy News; Ariba, Ariba.

1. No Redstone Left Unturned

On Sunday,


(VIAB) - Get Viacom Inc. Class B Report

ChairmanSumner Redstone got married. On Monday, he made majorchanges in Viacom's board of directors.

We at the Five Dumbest Things Research Lab suspecta connection between these two events.

Our inquiry started Sunday when we read thewedding announcement for Redstone and his bride, PaulaFortunato, in

The New York Times

. What caughtour eye was that in addition to all the usualinformation you expect to read in these announcements-- say, the ages of the bride and groom -- this oneincluded an extra detail we'd never recalled readingbefore in the


short-form weddingnotices: how the happy couple met.

Sumner and Paula, we read, "met two years ago on ablind date in New York that was arranged by mutualfriends from Bear, Stearns & Company, the investmentbank."

That's odd, we thought. Investment banks takecredit all the time for corporate mergers. But thiswas the first time we saw a bank take credit for amarital one. We called Viacom to find out who thebanker was on the deal, but a spokesman declined tosupply any names.

The notice as originally submittedto the


made no mention of Bear Stearns orthe blind date, he said; that information was addedonly after someone from the wedding pages called backto learn how Sumner and Paula met.

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We dropped the matter until Monday evening, whenViacom named three new members to the company's boardof directors. One of those people, we were surprisedto read, was Alan "Ace" Greenberg, chairman of theexecutive committee of

Bear Stearns



Shazam! Suddenly, everything fell into place. Oneof these "mutual friends" was obviously Ace Greenberg.Ace, after all, advised Redstone on at least two otherdeals: his 1993 bid for


and his 1994purchase of


(BBI) - Get Brickell Biotech, Inc. Report

. Didn't itmake sense for him to be behind the scenes on thistransaction?

Also, we remembered, Greenberg gained notoriety in1998 by donating $1 million to buy Viagra forimpoverished men. If anybody on Wall Street is a fanof marital bliss, it has to be Ace.

But then our thoughts took a sinister turn. Wasthere a quid pro quo here? After Greenberg found awife for Redstone, did Sumner reward Ace with a seaton Viacom's board? We understand that when a guy getsmarried, he's supposed to give his best man some sortof gift. But this is ridiculous.

So we called Greenberg, a half-century veteran ofBear Stearns, to see if he'd crack under questioning.First, we asked, are you the mutual friend mentionedin the


? No, he said, it was someone else.(That Bear Stearns employee, who requested anonymity,acknowledged assisting in the introduction, butclammed up soon after.)

Then we went in for the kill. Was there anyconnection between Bear Stearns' role in the marriageand Greenberg's appointment to Viacom's board? Westeeled ourselves for an outraged denial and bitterinvective from Ace.

To our disappointment, Greenberg behaved like thiswas the funniest thing anyone had said to him all day.No connection, he chortled, "none whatsoever." Oncehis laughter died down, he struggled to continue. "Ihad nothing to do with their meeting, and I've knownSumner for over 25 years. No." More laughter. "Inother words, if something goes wrong with themarriage, I'll be thrown out, right?" Still morelaughter. "No."

You know, life just isn't fair. The University ofTexas just gave Bob Woodward and Carl Bernstein $5million for the papers relating to their landmarkWatergate investigation. With stories like this one,we at the research lab will be lucky if our notesfetch 99 cents.

2. McNuggets of Wisdom

The Power of Cheese

You know, the market may be impressed by the newleadership at


(MCD) - Get McDonald's Corporation Report

, but wearen't.

Shares in the ailing burger-meister climbed 8.6%this week following the company's Monday presentationto Wall Street on its turnaround strategy. Shares inMcDonald's are down two-thirds from their late 1999peak, and the company has reported 13 months ofdeclining same-store sales.

New CEO Jim Cantalupo told Wall Street what itwanted to hear Monday -- that the company will becutting back capital expenditures and returning morecash to shareholders. All very well and good. But whatwe object to is how he said it.

We quote the headline of the news releaseproclaiming Cantalupo's address to the members of thepress Monday: "McDonald's CEO Says First 100 Days 'ALot Better Than Where We Were Headed In December.'"

Wow. "A lot better than where we were headed inDecember." Doesn't that get you excited? Doesn't thatget the blood rushing? About as much as when, in thedepths of the Depression, President Franklin DelanoRoosevelt famously said, "I don't think we should begetting upset about anything except, maybe, times whenwe're just being afraid, OK?"

3. Further Down on the List Was What Color isYour Parachute?

We now call your attention to some first-rateresearch recently published by Merrill Lynch's StevenMilunovich.

In a March 28 report, the technology strategisttook a close look at what

(AMZN) - Get, Inc. Report

calls its "purchase circles" --snapshots of the items that people at a particularcompany, geographic area or professional associationare ordering from the online retailer.

Milunovich surveyed the purchase circles ofseveral software companies to see what people werereading, or at least buying. What he discovered weremostly books about business and/or technology.



(ORCL) - Get Oracle Corporation Report

, forexample, he found that they're reading about Oracle'sroadmap for competing in the new economy. At



, they're reading

High Output Management.



(VRTS) - Get Virtus Investment Partners, Inc. Report

, the hot topic is designing resilientdistributed systems, whatever they are.

And what are they reading at


(NET) - Get Cloudflare Inc Class A Report

? Well, No. 1, witha bullet, is

Harry Potter and the Goblet ofFire.

In second place is

Body for Life: 12Weeks to Mental and Physical Strength.

A Network Associates spokeswoman had no readyexplanation. But we came up with one Thursday, afterthe company revealed

aterrible first quarter and revised estimatesdownward for the year. Shares plummeted 19%.

With business that bad at the office, who wouldn'twant to curl up with a good book instead?

4. The Chapman Report

And what's in the research lab's purchase circle?Why, the debut issue of

Air Canada BankruptcyNews

, an email newsletter published by

Bankruptcy Creditors'Service Inc.


as we loyal readers refer to it, isthe latest company-specific-financial-disasterpublication from the Trenton-based BCSI, which hasbeen doing this stuff since 1990.

Figuring that BCSI has better-than-average insightinto the state of the economy, we called up PresidentPeter Chapman to see what he could teach us.

We weren't disappointed. What's a good leadingindicator of corporate bankruptcies? New junk bondissues, he says, which foreshadow bankruptcy trends by18 to 36 months. So Chapman, who says junk issuespeaked in 2000, guesses 2002 was the peak year forbankruptcies. This year is "a continuation of the highpoint on the curve," he says. "The volume of newbankruptcy filings is declining ... but it's still abusy year."

Chapman even got a little nostalgic as hereflected on the money at stake. In the olden days,when a company went bankrupt owing $300 million, thatwas big news, he says. "Today, it's '$300 million? Idon't have time to think about that.'"

5. What A Long, Strange, Inaccurately ReportedTrip It's Been




, theonetime B2B company that now calls itself "the leadingEnterprise Spend Management solutions provider,"whatever that is, said Thursday it had to do somerestating of its previous financial statements.

How much restating? Oh, not much. Just everysingle quarter starting with the one ended Dec.31, 1999.

Which means that for a brief, happy time --namely, the three months between June 28, 1999, whenthe company went public, and Sept. 30, 1999, whenthat fiscal year ended -- Ariba's financial statementswere completely reliable.

You may not recall what you were up to back then, but we at the research lab remember exactly what we were doing those 12 weeks: building our mental and physical strength.