The word of the day is Isabel. Here at our home base in Virginia, the governor has already declared a state of emergency, and some on the coast are being ordered to evacuate. All of which seems especially eerie given that the weather just now couldn't be more perfect.

Better to be safe than sorry, we always say. So be safe. As for The Motley Fool, you can rest assured that it'll take a mighty big wind and whole lot of rain to stop us from keeping you Foolishly informed.

So tomorrow it is. Same time, same place.

In today's Motley Fool Take:

Time Warner to Boot AOL Prefix

The formula for success now reads this way: 

AOL Time Warner


---------------- = Time Warner


      AOL

Today's Washington Post says AOL Time Warner(NYSE: AOL) executives will vote tomorrow to cancel out the greatly diminished AOL name, change its logo, and revert back to its old "TWX" Time Warner ticker.

Though it amounts to an admission that the $112 billion merger was a dismal failure, sources told the Post that the name change does not signal a spinoff of the America Online unit. Sure, a business slowdown and accounting troubles have been a big embarrassment to the Time Warner side, but AOL last year did contribute more than $2 billion in operating income (not including non-cash charges), after all. And that means something to a company that's trying to reduce debt and get rid of some money-losing enterprises.

Today's news is far from a surprise. The name change has been talked about for months, and America Online chief Jonathan Miller actually requested it of AOL Time Warner Chairman Richard Parsons last month. "As AOL Time Warner became known as, for all intents and purposes, 'AOL,'" he wrote in a memo, "any controversy or criticism involving the corporate entity has actually hit our consumer brand."

Hm. Well, we'll see if a name change strengthens the brand. But a much simpler approach would be to clear up its accounting matters with the SEC and get that investigation behind it.

Quote of Note

"For of all sad words of tongue or pen, the saddest are these: 'It might have been!'"-- John Greenleaf Whittier, "Maud Muller"

Enron Barge Sinks Merrill Bankers

Three Merrill Lynch(NYSE: MER) bankers are facing the Enron music today, and no one wants to be caught without a chair. The unhappy fellows -- Daniel Bayly, Robert Furst, and James Brown -- are facing conspiracy charges for their role in the infamous Enron barge deal, wherein Merrill bought three worthless barges parked off the coast of Nigeria from Enron and then sold them back within six weeks.

If that sounds kind of like a loan to you, well, you're not alone. The three basically helped Enron make loan proceeds look like revenue, which it would appear was the defunct company's preferred method of making money. (And I mean "making" in the sense that they whipped it out of thin air).

Merrill Lynch the company has little to fear at this point, not after forking over $80 million in March to settle charges levied against it by the SEC as a result of the barge transaction and another shady Enron deal.

Indeed, most of the companies involved in questionable Enron transactions are out of the hot seat, as the hunt moves to the individual employees who constructed the deals. (I recently wrote of the fact that Citibank(NYSE: C) and J.P. Morgan Chase(NYSE: JPM) managed to settle their charges for about $300 million.)

It's too bad these three individuals didn't think to loot some of the money for themselves. If they had deeper pockets, perhaps they could just "settle" their charges as well.

Discussion Board of the Day: Sony

According to the Financial Times,Sony is set to test a new dual-format disc by early next year. Will this be enough to save Sony or will the company have to rely on its chips, components, and PlayStation business to see it through? Will we see consolidation in the music industry as a result of recent weakness? All this and more -- in the Sony discussion board. Only on Fool.com.

Wacky Tobacco Stocks!

Tobacco stocks zoomed today on a court victory for Philip Morris parent Altria Group(NYSE: MO) and overdue cost cutting at R.J. Reynolds(NYSE: RJR). Shares of both jumped 11% in morning trading, joined by 3% sympathy moves for British-American Tobacco(AMEX: BTI) and smokeless tobacco maker UST(NYSE: UST).

The Illinois Supreme Court reduced the bond Altria must post while it appeals a $10.1 billion decision citing misleading claims for light cigarettes. In the three-level Illinois state court system, a trial court first imposed a $12 billion bond but later reduced it to $6 billion. The next level appeals court reversed the reduction, and now the Illinois Supremes have reversed that -- bringing Altria around to $6 billion again. And that's as high as it goes.

Altria stock has bungeed on each decision, and today's surge reflects investors' belief that there is now little or no risk of bankruptcy specifically from the bond. But there's still risk if the company has to someday pay the full judgment.

The news at R.J. Reynolds is less the litigation risk affecting tobacco companies than competition from generic and cheaper brands. The company said it would cut 2,600 jobs, or 40% of its workforce, in an effort to save $1 billion by the end of 2005. Investors who are enamored of the company's 11% dividend hope that cost cutting will leave more free cash flow to fund it.

It's been quite a week for tobacco, with a mostly favorable decision from a federal court in Chicago also boosting the sector. The court upheld a trial court's rejection of HMO claims for tobacco-related health-care costs, but ordered the court to reconsider the HMO request for an order stopping false and misleading advertising.

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And Finally...

Hurricane Isabel's not the only one who's angry today. Bill Mann is, too. And we bet the controversy over NYSE's Dick Grasso and his $140 million compensation package have something to do with it. And speaking of Izzy, if she huffs and puffs and blows your house down, Robert Brokamp calmly walks you through ways to Making Your Insurer Pay.

In non-Isabel news, the Senate bit the FCC, Electronic Arts has the new James Bond 007 game on pause, and we know who moved your raise.

Contributors:
Bob Bobala, Robert Brokamp, Paul Elliott, Mathew Emmert, Jeff Fischer, Tom Jacobs, Jeff Hwang, LouAnn Lofton, Alyce Lomax, Bill Mann, Selena Maranjian, Dave Marino-Nachison, Rex Moore, Rick Munarriz, Matt Richey, Reggie Santiago, Dayana Yochim