The Five Dumbest Things on Wall Street This Week: June 8

5. Jon "D.B." Corzine

Bless you MF Trustee James Giddens! Before your report appeared this week, things were getting so quiet on the MF Global front that we started thinking that Jon Corzine had turned into Wall Street's version of D.B. Cooper.

Of course, all things considered, good old D.B. doesn't really hold a candle to the former Goldman Sachs ( GS) CEO. All Cooper did was nab $200,000 before parachuting from a hijacked plane and vanishing into history. Corzine, on the other hand, oversaw a $1.6 billion swindle from supposedly segregated customer accounts and then disappeared in plain sight.

That is, until this past Monday when the curiously cold manhunt for Corzine -- not to mention MF's cash -- finally heated up a notch with the arrival of Giddens's searing 275-page analysis of the commodities broker's demise. The report, submitted by Giddens to the U.S. Bankruptcy Court in Manhattan, details how a thoroughly mismanaged MF Global operated with only the tiniest of cash cushions well before it sank into bankruptcy last October.

Despite Corzine's reputed prowess as an adept risk-handler, Giddens concludes that the hitherto hot-shot CEO never implemented "systems and tools that would enable accurate real-time monitoring of liquidity." As a result, says Giddens, MF Global's management "seriously underestimated both the speed and extent" of the panic once it hit with force last fall.

And when the alarm bells did finally sound, MF was already in way too deep to save itself because of Corzine's doomed bets on the direction of European bonds. Corzine took on "a level of risk that was orders of magnitude greater than the relative exposure at other, larger institutions," according to Giddens, with investments peaking in October 2011 at $7 billion, or $700 million more than previously known.

Yes indeed, Giddens unambiguously captures how the former Goldman trader loaded up the MF train with oodles of risky debt and then fell asleep at the switch. Nevertheless, while Giddens does hold out the possibility of suing Corzine for negligence, he says his report draws no conclusions about possible criminal behavior by MF's management.

That's more than understandable, of course, considering the former New Jersey Senator and Governor's deep political connections, who right now seem more concerned with nailing Jamie Dimon for legally losing $2 billion of JPMorgan's ( JPM) own funds rather than cornering Corzine for illegally losing nearly that same amount of other people's money.

Then again, the D.B. Cooper case file has remained open at the Federal Bureau of Investigation for decades, so maybe we shouldn't give up hoping for justice just yet.

4. Facebook's Kiddie Quandary

As if our friends at Facebook ( FB) don't have enough on their newly public plates, they now have children to contend with. And when we say children, we mean Congress of course.

Facebook, which went public last month in the IPO flub of the century and has swooned ever since, is being scrutinized by lawmakers in the wake of news that the company is considering a new option to allow children under 13 onto its site.

The co-chairmen of the Bi-Partisan Congressional Privacy Caucus, Texas Republican Joe Barton and Massachusetts Democrat Edward Markey, sent a letter to Facebook CEO Mark Zuckerberg Monday asking him to provide details on his reported plans for letting youngsters -- well, younger than the baby-faced CEO himself that is -- access the social networking site.

"We strongly believe that children and their personal information should not be viewed as a source of revenue," wrote the reps. "We are deeply concerned that the changes discussed by Facebook could potentially have a harmful impact on our children."

Oh come on you old fogeys! First old man Bloomberg takes away our Big Gulps and now you want to keep us from connecting with our buddies online? Is this 1984 or 2012? Seriously, how's a kid supposed to have fun in this day and digital age?

For the record, a May 2011 Consumer Reports survey showed that Facebook had 7.5 million users below the age of 13 in the prior year, despite the company's clear policies against it.

Oh man Zuck. As if you didn't regret that IPO already, now you have to deal with a bunch of Congressmen looking to bash your life's work for the sake of a few headlines. Wasn't it far more fun when you were simply trying to impress chicks in your dorm as opposed to dealing with a bunch of political hacks trying to sway the votes of soccer moms?

Look, we're not saying that the Web is a completely safe place for kids to play and that the Congressmen don't have a right to be concerned with kids safety. We absolutely, unequivocally recognize that there are places online that should be completely off limits for underage users.

But give us a break guys. Zuck is a married man now and may have plans to become a father someday, so clearly he won't want to create a product that would endanger his own offspring.

Perhaps more importantly, he's not an idiot who would jeopardize his precious brainchild without considering all the angles. So why don't you put the politics aside for a second and wait to hear Facebook's plan before pouncing.

3. Penney's Problems

Happy anniversary Ron Johnson! We sure hope you are enjoying this special milestone as much as we are.

We can barely believe it ourselves, but it's been a whole year since J.C. Penney ( JCP) introduced Ron as its new CEO. It almost seems like yesterday when shares of the historic retailer jumped 17% to $35 on the news that the former Apple ( AAPL) marketing whiz would take the reins. Even now we can see the pride in hedge fund manager Bill Ackman's eyes when he called Ron's hiring a "credit to the company" of which his Pershing Square hedge fund owns a 16.5% stake.

Now, here we are 12 months later and it's amazing to see all Ron has accomplished for the $53.3 million in total compensation Penney's paid him in 2011.

Let's see. The shares trade 30% lower than at this point last year, after the stock dropped an additional 3% Tuesday following Johnson's less-than-inspiring speech at an investor conference. The company's same-store sales came in worse than expected last month as a result of Johnson's admittedly "confusing" new pricing model. Its customers are fleeing because they can't use their coupons. Its employees -- the remaining ones -- are irate. Its stores are closing. Its losses are widening.

Yep Bill, let's give the guy "credit", because he sure has had one heckuva monumentally crappy year.

But just you wait, says Johnson, because once he gets done remodeling Penneys stores -- once again, the remaining ones -- then you'll see the stock really soar.

"There'll be one year of sales going down that sets the stage for a year of take off," Johnson told attendees Tuesday.

You got it Ron. We'll wait till next year before passing judgment. The question is, if this keeps up, will your shareholders wait for you as well? You know...the remaining ones.

2. Mattress "Mob" Wars

Holy cannoli Tempur-Pedic ( TPX)! If you're already going to the mattresses in a price war with Sealy ( ZZ) and Select Comfort ( SCSS) then why on earth would you take on Wall Street as well?

In a rub-out reminiscent of Sonny Corleone at the tollbooth in The Godfather, traders gunned down shares of Tempur-Pedic by 49% Wednesday. The bloodbath was caused by the high-end mattress-maker slashing its second-quarter and full-year earnings guidance by more than 30% as a result of stiff competition in North America. Shares of Sealy and Select Comfort fell 5% and 21% in sympathy.

Back in April, Tempur-Pedic told analysts it expected a vigorous full-year profit of $3.80 to $3.95 per share on $1.6 billion to $1.65 billion in revenue. This week, however, the company's brass drastically reversed itself, telling the Street it now sees a sleepy profit of $2.70 per share on $1.43 billion in revenue.

Mama Mia what a miss! Even Fredo could do a better job managing expectations than these not-so-wise guys.

"Sales trends in our North America business during the second quarter have been disappointing and below plan, primarily due to changes in the competitive environment, including an unprecedented number of new competitive product introductions which have been supported by aggressive marketing and promotion," said CEO Mark Sarvary referring to the flood of new foam mattresses introduced by Tempur-Pedic's rivals.

As part of its plan to eliminate its foes, the high-end player is going down and dirty. Tempur-Pedic is chopping nearly 20% off the suggested retail price of its popular Cloud Supreme mattress set this summer.

Yep, it's going to be one bloody battle with red ink splattering across all the mattress-makers. But on the bright side, at least the losers will be quite comfortable while sleeping with the fishes.

1. Nasdaq's Comic Relief

Enough with the jokes Nasdaq ( NDAQ)! Stop splitting our sides and be serious for a second. Now tell us: Is that really your final Facebook compensation offer?

The Nasdaq finally emerged from its shelter Wednesday and announced it will offer cash and rebates totaling $40 million over the next six months to compensate clients burned by its bungling of Facebook's bomb of an IPO. Once it gets the sign-off from the Securities and Exchange Commission, Nasdaq plans to pay $13.7 million in cash to affected member firms and offer the remainder to members in the form of credits to reduce trading costs.

Let's start with the cash reparations first, because that's certainly the part of the deal that Facebook's biggest market makers -- UBS ( UBS), Citigroup ( C), Knight Capital ( KCG) and Citadel -- regard as the most hilarious. The foursome contends it lost upward of $115 million because of the technical problems during the IPO, so Nasdaq's puny peace offering simply won't cut it.

Knight Capital was the first responder to guffaw at Nasdaq's plan, saying it "does not come close to covering reported losses" and is "simply unacceptable".

Okay, fine. Maybe they weren't guffawing, but we know they found the idea laughable.

And while NYSE Euronext ( NYX), the operator of the New York Stock Exchange, was not involved in the offering, it could not help but get in on the refund joke, claiming the plan forces "the industry to subsidize Nasdaq's missteps and would establish a harmful precedent that could have far reaching implications for the markets, investors and the public interest."

Well, that's probably stretching things a bit too far, but you know if anybody is getting a belly laugh from seeing Nasdaq CEO Bob Greifeld squirm, it's those guys. Although it may be hard to remember now, there was a time not too long ago when you could not wipe the silly grin from Greifeld's now grim face after he beat out the NYSE for what was once a trophy listing.

Now, with its stock down more than 30% from its offering price, Facebook has undoubtedly turned into the booby prize. And while it's understandable for Nasdaq's rival to smile over the sudden change in circumstances, for investors caught up in this unending sideshow, the losses are clearly no laughing matter.

-- 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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