The 5 Dumbest Things on Wall Street This Week: March 2

5. Murdoch's Sun Stroke

Poor Rupert Murdoch. Just when the News Corp. ( NWS) CEO thought his phone-hacking headaches were behind him, here comes The Sun.

A senior police officer said Monday that Murdoch's U.K. tabloid, The Sun, regularly paid off public officials in return for salacious stories. Sue Akers, a Metropolitan Police deputy assistant commissioner, said that Sun journalists not only greased the palms of cops, but also military, health and other government bigwigs.

"There appears to have been a culture at The Sun of illegal payments, and systems have been created to facilitate such payments whilst hiding the identity of the officials receiving the money," said Akers, who offered an example of one official pocketing more than 80,000 pounds over several years.

Wow! All that Murdoch moolah just to keep your name on -- or perhaps off -- the front page? Talk about good work if you can get it.

And Murdoch probably believed he was getting back to business this weekend and finally moving past last summer's public shaming, which culminated with the closure of the News of the World. Alas, it was not to be. Akers released her unflattering report only a day after Murdoch proudly announced that The Sun's first-ever Sunday edition had sold more than 3 million copies.

Murdoch responded to Akers's bombshells by insisting that those corrupt practices "no longer exist at The Sun." His pleas, however, fell on deaf and disbelieving ears. And even Wednesday's news that Rupert's son James Murdoch is stepping down as executive chairman of News Corp.'s U.K. newspaper arm could not dull the impact of Akers's charges.

Ultimately, the Murdoch family was too little, too late.

Or as they say in the newspaper business: She scooped them.

4. Carnival's Bruises

Sorry Carnival ( CCL). We've given you a number of passes for dumb behavior in the past few months, but we simply could not let you cruise by after this latest string of silliness.

Only a month after its Costa Concordia liner tragically struck a rock and overturned off the coast of Italy leading to 32 deaths, Carnival found another member of its fleet in proverbial hot water; although this time thankfully without loss of life.

On Monday, the company's Costa Allegra lost power as a result of a fire in its engine room, leaving 636 passengers adrift off the coast of Tanzania without lights and air conditioning.

Ironically, Allegra translates into "happy" in English. And perhaps that's why the company is taking a don't worry, be happy attitude to this latest catastrophe.

"It is stable and upright," said Giorgio Moretti, the director of nautical operations for Costa Crociere SpA, in a conference call late Monday.

Hey! Give the guy credit. He certainly found the situation's silver-lining, especially considering its sister ship the Concordia remains half submerged within sight of the Italian coast.

Moretti also said passengers and their loved ones should not fear pirates intercepting the Allegra while it's being towed to shore in the Seychelles, because a nine-member Italian military team was aboard. He added that the maritime region where the ship was listing "isn't a high risk area for pirates."

Wow! There's a selling point for future Carnival vacation-goers: A low probability of pirates, onboard SWAT teams and an unlimited buffet. Sounds lovely!

The problem is, however, that they sent the soldiers to the wrong ship. Half a world away in Puerto Vallarta, Mexico, 22 Carnival passengers were robbed during a shore excursion, cruise officials said late Saturday.

The good news is that no injuries were reported, so at the very least Carnival can say its passengers were not cruising for a bruising.

(Ouch! All right, we admit it. That was bad. We just figured that like Moretti we would try to find the bright side, too. Too bad that ship has already sailed ... OK. We'll stop now.)

3. Buffett's Parlor Game

Sorry, Chris. You told the right billionaire to "shut up," but for the wrong reason.

Speaking last week on CNN, New Jersey Gov. Chris Christie weighed in on President Obama's so-called "Buffett Rule" to raise taxes on individuals making a million or more dollars a year. Christie, as blunt as a rolling pin, challenged the Berkshire Hathaway ( BRK-B) CEO to "just write a check and shut up" if his ultimate goal was to reduce the country's $1.56 trillion deficit.

Politics put well aside, we here at The 5 Dumbest Lab admittedly have a soft spot for the governor's in-your-face approach. Like Christie, we try not to pull our punches, no matter the heft of our target. And presumably like Christie, we would prefer that Warren Buffett stick to stock-picking as opposed to sticking his (and sadly his secretary's) nose into other people's 1099 forms.

All that said, Buffett has a constitutional right to pipe up for his pet cause, so far be it from us -- or anyone -- to quiet him down. If Christie doesn't want to hear from Buffett, then we advise him not to listen. It's not like he's going to lose the Nebraskan's vote anyway.

But while politics is not under our purview, Wall Street is. And that's why we have fewer reservations pointing out the unbridled idiocy of Buffett's "Name-My-Successor" parlor game.

Yes, we'll defend to the death the right to Buffett's freedom of speech. Nevertheless, we may just kill ourselves if he continues carrying on like he did on Monday with regard to his successor.

In a CNBC interview, he once again rejected suggestions that he should divulge the identity of his replacement, adding that the person who has been chosen does not even know it himself. Honestly, not since LeBron James told the world he was taking his talents to South Beach has a simple decision been made so chalkboard-scratchingly annoying.

Buffett's rationale for his secrecy is that the public rarely knows who will be the next CEO of other major corporations like Coca Cola ( KO) and IBM ( IBM), two long-term holdings in his portfolio. Furthermore, Buffett said he believes there is a disadvantage to having a "crown prince" in place.

Oh, all-seeing Oracle of Omaha, how could you be so blind to reason?

First of all, unlike say Coca-Cola, Berkshire trades essentially like a closed-end fund and can be valued at a premium or discount to its underlying assets. In other words, your management skills are a part of the stock's price. Therefore, your presence as CEO of Berkshire matters worlds more to Berkshire's investors than the CEO sitting in Coke's corner office does to his.

Put even more plainly, most Coke investors could not name the company's current CEO, let alone his second in command. But they do know what they will get when they order their broker to "Buy me some Buffett."

Next, come on Warren, did you not learn anything about succession planning from last year's David Sokol debacle? By keeping everybody in the dark about your successor, you emboldened Sokol's boorish behavior.

The guy -- who, by the way, is now collecting $1 million a year from Berkshire in retirement -- was gallivanting around Wall Street under the guise of your good name, only to muddy it with a still unresolved insider trading scandal.

Finally, when you named your farmer son Howard to the nonexecutive chairman role a year ago, you made it clear who the clown, sorry, crown prince was in the organization.

Think about it this way, Warren. Your good buddy President Obama has Vice President Joe Biden a heartbeat away in case anything terrible should happen. Doesn't that make you feel better about revealing your chain of command?

Hmm. Bad example. Maybe we'll take Christie's advice and shut up now.

2. Gekko's New Gig

Oh no! Say it ain't so Mr. Gekko! How can the Wall Street raider who took down "Teldar Paper" suddenly start doing public service announcements for the FBI? Honestly Gordon, if "lunch is for wimps" then what do you call cozying up to the feds?

Like you always said, "If you need a friend, get a dog."

All right, forgive us if we have some fun with the Federal Bureau of Investigation's new campaign against insider trading and its spokesman, actor Michael Douglas. But please understand that it was hard for us not to chuckle this week upon seeing the guy famous for saying "greed is good" now cautioning traders that "if a deal looks too good to be true, it probably is."

Seriously though, we have no doubt that Douglas' portrayal of Gordon Gekko in Oliver Stone's 1987 movie Wall Street sent a battalion of Bud Foxes into Wall Street's henhouse. And call us crazy, but there is a case to be made that the seeds of the financial crisis can be traced directly to Douglas' swaggering performance.

How do we know this? Well, walk onto any trading floor in the world and ask who "Blue Horseshoe loves" and we guarantee the crowd will boisterously yell back "Anacott Steel." Then, just for fun, ask the same crew to recall a single question from the ethics portion of their Series 7 exams and we are equally confident you'll hear crickets.

But that's not our only proof about how late '80s popular culture can be linked, however tacitly, to the financial meltdown of the early 2000s. In 1989, Michael Lewis published his book Liar's Poker about his experiences on a fixed-income desk at Salomon Brothers. At the time, Lewis figured his grotesque characterization of bond traders would cause college seniors to steer clear of Wall Street. Yet, as the author recalls in a late 2008 column, this was not the case at all.

"Six months after Liar's Poker was published, I was knee-deep in letters from students at Ohio State who wanted to know if I had any other secrets to share about Wall Street. They'd read my book as a how-to manual," wrote Lewis during the depths of the crisis.

Imagine that. A whole generation of Wall Streeters learning about moral hazard from the likes of John Meriwether, the bond trader who bet a million dollars on a silly parlor game called Liar's Poker. And if you remember, he was also the same guy who in 1998 received at $3.6 billion Fed-orchestrated bailout when he was a hedge fund manager running Long Term Capital.

Look, once again to be crystal clear, we aren't blaming the Wall Street crash on Lewis's bestseller or at the feet of a fictional movie villain. Not even close. Michael Douglas was not tipping off Raj Rajaratnam about Intel's ( INTC) earnings or the next move from Goldman Sachs ( GS). He was off acting in movies, walking red carpets and reading a multitude of scripts to select his next role.

And like his character Gekko boasted, Douglas probably looks "at a hundred deals a day."

But you gotta admit that's hard to escape the irony that he picked this particular role. You see. He's not really a financial villain. He was just playing one in the movies.

Or was he?

1. Fannie Mae Need More

Thank you Fannie Mae. You truly are the Dumbest gift that keeps on giving.

Of course, that's because you keep on getting and getting.

The humbled home-loan provider announced Wednesday that it needs to go back to the well and seek $4.6 billion more in federal aid after reporting a $2.4 billion fourth-quarter loss. As a result of its latest futility, Fannie Mae's loss for 2011 rose to $16.9 billion from $14 billion a year ago.

Yep, it sure is hard to turn a profit when you are still sitting on a ton of toxic crap in the form of pre-2009 subprime home loans. Nevertheless, Fannie's brass says the most noxious of its holdings will soon lose their stink.

"We think that we have reserved for and recognized substantially all of the credit losses associated with the legacy book," said Chief Financial Officer Susan McFarland.

For those who may have forgotten, Uncle Sam seized Fannie Mae and its sibling Freddie Mac back in September 2008, preventing the pair from insolvency. Since then, Fannie Mae has been propped up by borrowing more than $116 billion from taxpayers.

And as a result of a juvenile spat with fellow bailout baby Bank of America ( BAC), Fannie may have to borrow even more. Last week, Bank of America said it had ceased selling new mortgages to Fannie over a bad loan-buyback dispute.

This week, however, Fannie took umbrage and blamed Bank of America for the breakdown between the two former buddies. In an SEC filing, Fannie said Bank of America had "slowed the pace of its repurchases" in the fourth quarter, and that as a result of its "failure to honor its contractual obligations," its outstanding repurchase requests with Bank of America spiked.

Cutting to the chase, McFarland said that if Bank of America didn't honor Fannie's demands, "ultimately the taxpayer pays."

Really Sue? Now tell us something we don't know.

Written by Gregg Greenberg in New York.
Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.

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