Kellogg's Swine Flu Silliness
NEW YORK (TheStreet) — Who needs a swine flu shot when you can have a bowl of Cocoa Krispies instead?
Cereal maker Kellogg (K) - Get Report (Stock Quote: K) is being needled by critics for claiming that its Cocoa Krispies brand, among its other cereals, helps fight the flu by boosting "your child's immunity." Kellogg's flu-fighting assertions arrive at a touchy time for parents already anxious about their children's exposure to the H1N1 virus, otherwise known as swine flu.
Last week, San Francisco City Attorney Dennis Herrera sent a letter to Kellogg as well as the Food and Drug Administration demanding that Kellogg prove its claim, according to USA Today.
"I am concerned the prominent use of the immunity claims to advertise a sugar-laden chocolate cereal like Cocoa Krispies may mislead and deceive parents of young children," Herrera wrote.
Darn tooting, Dennis! How dare they?! The next thing those BS artists in Battle Creek are going to say is that Frosted Flakes will lower your blood pressure. Or Froot Loops will improve your cholesterol. Well, we don't buy it.
Apparently neither does Kellogg, which is desperately trying to defuse this Krispies — and certainly kooky — controversy. The company maintains that it started planning this whole "immunity" theme a year ago, well before the swine flu reached epidemic proportions. Kellogg started increasing the amount of antioxidant vitamins A, C and E — supposedly immune system boosters — in its products earlier this year.
"It was not created to capitalize on the current H1N1 flu situation," says spokeswoman Susanne Norwitz. "Kellogg developed this product in response to consumers expressing a need for more positive nutrition."
From our vantage point, both sides of this cereal war are acting like a bunch of flakes.
Dumb-o-meter score: 95 — Anyone willing to believe they can ward off the flu with a kiddie cereal has likely already snapped, crackled and popped.
La-Z-Boy Crashes Auction
In the end, the motorized chair which was involved in a DUI accident with a real automobile and is now up for auction on eBay (EBAY) - Get Report (Stock Quote: EBAY) wasn't even a La-Z-Boy (LZB) - Get Report (Stock Quote: LZB) anyway.
Yeah, we better explain that one.
(EBAY) - Get Report (LZB) - Get Report Last year, 61-year-old Dennis LeRoy got hammered in a Proctor, Minn. bar and attempted to drive home. His vehicle of choice? A custom-made, motorized living room recliner powered by a converted lawnmower and equipped with a cup-holder, radio, headlight and a National Hot Rod Association sticker. After crashing into a "real" car on his way back from the pub, LeRoy failed a slew of sobriety tests and was sentenced to 180 days in jail.
But the story doesn't end there. At least not for LeRoy's unique ride.
(EBAY) - Get Report (LZB) - Get Report Cops in Proctor made a deal with LeRoy to strike one of the DUIs from his record if they could sell the contraption and raise money for the state. They listed the chair on eBay calling it a "great parade vehicle or a terrific business draw." They also made sure to warn potential buyers that it is most certainly "not a street legal vehicle." According to news reports, the chair reportedly received bids topping $43,000, or close to the price of a brand new 2009 BMW 5-Series.
Well, the press caught wind of the story and dubbed LeRoy's invention the "DUI La-Z-Boy Mobile." And while that may seem like a cool moniker at a football tailgate party, it's not the kind of advertising La-Z-Boy was looking for. (Who figured La-Z-Boy would rather have its furniture judged for its style as opposed to its gas mileage?) Eventually La-Z-Boy stopped the auction with only a few hours of bidding left on the clock.
(EBAY) - Get Report (LZB) - Get Report That is, until late Tuesday when the chair took off again. It turned out, upon further review, that La-Z-Boy did not manufacture the chair in question, and the item was put back up for sale on eBay. The $10,099.99 winning bid on Thursday was impressive, but much lower than the earlier auction.
We'll raise a glass to the lucky winner. We just hope he or she doesn't do the same before driving the prize home.
(EBAY) - Get Report (LZB) - Get ReportDumb-o-meter score: 90 — We're not sure whether we should be impressed with LeRoy's ingenuity, or saddened that someone would go to such lengths not to have to get up from their recliner.
So Long, CIT
And U.S. taxpayers are picking up the tab.
(EBAY) - Get Report (LZB) - Get Report Small business lender CIT Group (Stock Quote: CITGQ.PK) filed for Chapter 11 protection on Sunday, one of the five-largest bankruptcies in U.S. history. The company ultimately could not trim down its $10 billion of debt load following a failed debt exchange offer. According to its bankruptcy petition, CIT had $71 billion of assets and $64.9 billion of liabilities on June 30.
The reorganization plan calls for unsecured debt holders to receive 70 cents on the dollar of new notes plus new common stock. As for the old shares of CIT — for all you smiling shorts looking to close out positions — those worthless scraps can now be found trading on the Pink Sheets for about 20 cents.
(EBAY) - Get Report (LZB) - Get Report So what about "our" preferred shares, by which we mean the $2.33 billion in taxpayer money the U.S. government invested in CIT through the Troubled Asset Relief Program last December? Are we going to see any recovery? Maybe a few pennies on the dollar?
Don't count on it. Treasury Department spokesman Andrew Williams said that "recovery to preferred and common equityholders will be minimal." If that's the case, it would make CIT the first realized loss for the $700 billion TARP program, a dubious distinction if there ever was one.
(EBAY) - Get Report (LZB) - Get Report Then again, it was a truly dubious investment from the very beginning, one which still leaves us scratching our heads. Last December, CIT was anointed a bank holding company worthy of saving with taxpayer billions. Ten months later, the government is writing off the loss with little more than a shrug.
Could somebody please tell us what we got for our money?
Macy's Phillies Faux Pas
(EBAY) - Get Report (LZB) - Get Report The morning after the Yankees took a commanding 3-1 lead in the World Series on their way to winning the title, The Philadelphia Inquirer ran an advertisement from Macy's (M) - Get Report (Stock Quote: M) congratulating the Phillies on repeating as world champions.
Well, it's not exactly "Dewey Defeats Truman," but it certainly is dumb enough to make our list.
(EBAY) - Get Report (LZB) - Get Report (M) - Get Report The nearly full page ad on the back of Monday's front section features a Phillies T-shirt, the Commissioner's Trophy and the phrase ''Back To Back World Series Champions.'' The ad encourages fans to show their Phillies pride and "celebrate their World Series win with championship gear from Majestic and Nike (NKE) - Get Report (Stock Quote: NKE)."
Ironically, it also contains a small disclaimer at the bottom saying, ''Advertised items may not be at your local Macy's.'' Trust us, they won't be.
"Macy's is a great corporate citizen, supporter of this region and our sports teams. We apologize for this error and any inconvenience this caused," said Vice President of National Advertising Howard Griffin in a statement.
(EBAY) - Get Report (LZB) - Get Report (M) - Get Report (NKE) - Get Report If the paper had been smart, it would have simply run an ad quoting Yankee legend Yogi Berra, who once said, "It ain't over 'til it's over."
Sorry Phillies fans. It's over now.
Line's Sin of Commission
(EBAY) - Get Report (LZB) - Get Report (M) - Get Report (NKE) - Get Report Value Line (VALU) - Get Report (Stock Quote: VALU) bills itself as "the most trusted name in investment research." Well, that trust has clearly bitten the dust.
Value Line, its now former CEO Jean Buttner and former compliance chief David Henigson will shell out $45 million to settle allegations the firm charged more than $24 million in phony commissions on mutual fund trades. The Securities and Exchange Commission said Wednesday that the investment advisor and its former executives didn't admit or deny wrongdoing. In addition, Buttner and Henigson were barred from working in the securities business or as officers or directors of any public company.
(EBAY) - Get Report (LZB) - Get Report (M) - Get Report (NKE) - Get Report (VALU) - Get Report Value Line is paying a $10 million civil fine and about $24.2 million in restitution plus $9.5 million in interest. Buttner and Henigson are ponying up $1 million and $250,000, respectively, for a scam that allegedly ran from 1986 to November 2004. During that period, Value Line redirected a slice of the mutual fund trades to its brokerage business, Value Line Securities Inc., in a so-called "commission recapture program."
You've heard of "sins of omission"? Well, Value Line's was a sin of commission.
(EBAY) - Get Report (LZB) - Get Report (M) - Get Report (NKE) - Get Report (VALU) - Get Report Here's how their scheme allegedly worked. Unaffiliated brokers would execute trades on behalf of Value Line at a discounted rate of a penny or two per share. But instead of passing the savings on to the mutual funds like they were supposed to do, the SEC says Value Line had the outside brokers bill the funds for a portion of that commission and then "rebate" the rest to Value Line Securities.
Altogether, Value Line, which describes itself on its Web site as "synonymous with trust, reliability and objectivity," pocketed more than $24 million in phony brokerage commissions without performing any real brokerage services for the mutual funds on those trades, according to the SEC.
Dumb-o-meter score: 75 -- Value Line is literally a trust buster.
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