1. E for Egregious
On Sept. 25, 2002, salesman Jimmy Luu of Houston's Microcache Computers bid $44,000 of his boss' money for a stainless steel tilted "E" sculpture at an
bankruptcy auction. Upon being named the winning bidder, Luu explained to reporters, "He said, 'Just do anything to get it.'"
Two months later, what was Luu doing?
- Collecting unemployment. Microcache's president, furious that Luu had gone more than $30,000 over the predicted selling price for the "E," fired Luu a day after the auction.
Getting dunned. Luu -- who once won $16,000 on
Who Wants to Be a Millionaire -- had fabricated the tale of his boss and his job. Enron's bankruptcy trustee hired a collection agency to go after Luu when his check for the "E" bounced.
Writing a book. Luu's experience, and notoriety, won him a contract to write a guide to stock bubble collectibles.
Spending more money. He bid on a second "E" at a second auction, but dropped out once the bidding went over $10,000.
2. You Know, a Lot Can Change in Five Years
Who, in 1997, told
The Wall Street Journal
, "I like to avoid costs wherever I can in the company," adding that his company "would never pay $90 million to an outrageously successful executive -- never mind a failed one"?
Just a Loan
Jack Welch, General Electric (GE) - Get ReportDennis Kozlowski, Tyco International (TYC) John J. Rigas, Adelphia Communications (ADELQ) Jeffrey Skilling, Enron
3. How High the Dow?
Eyeing the Dow
Just to refresh your memory, the
Dow Jones Industrial Average
began 2002 at about 10,000, peaked at 10,673 in March, then slid down from there. Recently, the Dow has traded in the vicinity of 8450, down nearly 16% for the year.
A year ago, Prudential Financial strategist Robert Stovall was predicting the Dow would hit 12,000 by this year's end. But why single out one errant prognosticator? When
polled 54 market strategists last year as to where the Dow would end up in 2002, what was the consensus forecast?
- Up 26%
4. I Pitt the Fool
Well, 2002 was certainly the year of Harvey Pitt's discontent. Appointed chairman of the
Securities and Exchange Commission
last year, Wall Street's top cop quickly slid from hero to zero.
It's hard to pinpoint a single reason why. Maybe it was his suggestion that his post be promoted to a cabinet-level position. Maybe it was his reluctance to share information with his fellow commissioners about Public Accounting Oversight Board nominee William Webster.
Or maybe it was an inexplicable lapse in the loyalty for which Washington, D.C., is so renowned. To illustrate: Which of the following statements did Senate Banking Committee member Charles Schumer (D., N.Y.)
make about Pitt?
- "The SEC desperately needs someone who both has a deep knowledge of how the markets function and at the same time possesses a rock-ribbed integrity.
Harvey Pitt is such a man."
"He is well-described as a Zeus in his field."
Winston Churchill, he is a man for his times."
"He, unfortunately, was the wrong man at the wrong time."
5. Try to Remember What Went On in September
What happened at 9 a.m. Eastern time on Tuesday, Sept. 3, 2002?
- Victimized by a hoaxster,
PR Newswire issued a fake press release announcing Barbra Streisand was joining the board of
Martha Stewart Living Omnimedia (MSO) .
The usually public-relations-savvy and image-conscious Martha Stewart appeared on CBS'
The Early Show, hacking away at a head of cabbage with a large knife while fending off questions about her sale of stock in
ImClone Systems (IMCL) .
WorldCom's (WCOEQ) former chief financial officer, pleaded innocent to charges of securities fraud.
The 92nd St. Y Nursery School -- the object of desire for Salomon Smith Barney analyst Jack Grubman -- launched its application process for the 2003-04 school year.
6. CEO Speedwagon
In 2000, former General Electric executive Gary Wendt received $45 million in cash to try his hand at turning around financial services firm
. He failed. In August, the company said it would miss making debt payments. In October, Wendt resigned. And in December, Conseco filed for bankruptcy protection.
Wendt earned some notoriety for that $45 million, even before Conseco drew its last gasps. But what happened in July 2002 that really called attention to Wendt's money?
- Wendt donated $8 million to New Jersey's Seton Hall University, which will name an under-construction student center in his name. Seton Hall already boasts buildings named after Wall Street luminaries as ex-Tyco CEO Dennis Kozlowski -- who has pleaded innocent to Tyco-related larceny charges -- and ex-Tyco director Frank Walsh, who has pleaded guilty to securities fraud. The university only recently removed the name of imprisoned financier Robert Brennan from a recreation center.
Wendt donated $8 million to an animal rights group known as the Mammal Liberation Front.
Wendt received an additional $8 million cash bonus.
Wendt agreed to forgo his $1 million 2002 salary, opting instead for a double-wide mobile home recently repossessed by Conseco's lending unit. He said at the time he planned to relocate it to a hunting retreat he owned in Michigan.
7. Where's Quasimodo When You Really Need Him?
We all know that stocks won't recover until individual investors regain their confidence, right? And they won't overcome their jitters as long as they believe that the markets are a scheme by the rich to separate the poor from their money? As long as it looks like some sort of game?
So, you might ask, what steps might the financial pashas take to restore trust and respectability to the markets? Well, starting with the
New York Stock Exchange
, they might put the kibosh on some of the characters they have participating in the opening and closing bell-ringing ceremonies each day.
Which one of the following did
help ring a bell at the NYSE this year?
- Tonya Harding
January 1996 Playboy Playmate Victoria Fuller
The dog from Men in Black II
Asimo, billed as "the world's most advanced humanoid robot"
8. Get the AOL Out of Here
Media and entertainment conglomerate
AOL Time Warner
has spent most of the year contending with the blowback from the 2001 merger of America Online and Time Warner.
There were the departures of CEO Jerry Levin and co-COO Bob Pittman. The stock decline. The Securities and Exchange Commission investigation. And the $50 billion-plus impairment of goodwill.
So America Online may have been acquired by Time Warner at a market top. But it's still a crown jewel, right?
Here's the proof. According to a recent survey of 1,000 AOL subscribers by J.P. Morgan, which of the following is seen as the most compelling reason to pay a premium for AOL's online service?
- Keeping one's email address
AOL's Instant Messenger service
Sessions@AOL (live music performances)
9. Fifteen Minutes of Fame Times Four
Who are Bill Hillison, Joyce C. Lambert, Russell J. Lundholm and Margaret Hicks?
- Some of the 125 beneficiaries of the nonprofit group known as the
ex-WorldCom Employee Assistance Fund.
Named plaintiffs in a class-action suit seeking damages from
McDonald's (MCD) - Get Report for making children morbidly obese.
Four of the 23 state attorneys general who filed suit in October to block the merger of
EchoStar Communications (DISH) - Get Report and
Hughes Electronics (GMH) .
Arthur Andersen Professors in Accounting at four different U.S. universities.
10. $25 Million Here, $25 Million There, It All Adds Up
Gary Winnick, ex-chairman of bankrupt telecom company
, surprised lawmakers at an Oct. 1 congressional hearing by vowing to donate $25 million to Global Crossing's 401(k) retirement fund. The announcement, however, only briefly took the heat off of Winnick for his May 2001 sale of $123 million of Global Crossing's stock -- a sale that came one month before the company blindsided Wall Street with reduced revenue forecasts.
Later that day, Rep. Diana DeGette (D., Colo.) asked Joe Nacchio, ex-CEO of
Qwest Communications International
, if he would make a similar donation. According to CNN's transcript, how did Nacchio -- who sold more than $200 million in since-tumbled Qwest stock -- respond?
- "Mr. Winnick ... may have a guilty conscience. I don't."
"Respectfully, Congresswoman DeGette, I have already helped pay for Qwest's employees' retirement. ... I have paid millions of dollars in taxes on my income and capital gains. I also worked 24 hours a day, seven days a week, to increase Qwest's value."
"I have not heard about it. I have no reflection on it. .... Mr. Winnick's company also went bankrupt. Qwest is not a bankrupt company."
"If I say yes, can we call the rest of the hearing off?"
For all the answers to this quiz, go to the next page.
Spending more money.
That second "E," by the way, sold for the bargain price of $10,500.
This year, the feds accused him of taking out $225 million in unauthorized loans from Tyco, attempting to erase $25 million of those loans, and receiving $58 million in unauthorized bonuses.
The pundits also predicted that the
would rise 15%; it's down 22%.
Schumer said that about Pitt's expected successor William H. Donaldson
, according to the
New York Law Journal
. The stuff about Zeus and Churchill came during Pitt's nomination hearing in July 2001, according to
. The "wrong man, wrong time" comment was quoted in a report by Charles Osgood this November.
Stewart cut up for the cameras in June, and Sullivan pleaded later in September.
The Barbra Streisand hoax never happened. As for the nursery school, "Since 1938, the 92nd Street Y Nursery School has provided a warm and creative atmosphere to foster young children's imagination, curiosity and intellect," according to the school's Web site. So what devoted father
want his kids to go there?
He got $8 million more.
"That is set up as a contractual obligation of the company," Conseco spokesman Mark Lubbers told
The Indianapolis Star
. "We don't pick and choose which contracts we're going to honor."
Tonya Harding was the no-show.
Alliance Gaming brought Victoria Fuller (along with Betty Boop, Popeye and Olive Oyl), Sony hosted Frank the Pug, and Honda trotted out Asimo.
Maintaining an email address was cited by a whopping 92% of respondents.
Forty-seven percent said AOL Instant Messenger, which is available free to non-AOL members. Third place, at 19%, was parental controls. Sessions@AOL got the nod from 10%.
Give it the old college try.
Hillison is at Florida State University, Lambert is at the University of New Orleans, Lundholm is at the University of Michigan, and Hicks is at Howard University.
Qwest still, in fact, is not bankrupt.
The company's shares, which peaked at $66 in 2000, closed at $2.69 the day of the hearing. They've since climbed past $5.
Ready to further test your knowledge of Wall Street's Dumbness? Take a shot at two other quizzes we published earlier this year:
The 10 Most Wanted Pop Quiz and
The 10 Most Wanted Compensation Quiz.