Stupidity is contagious. It gets us all from time to time. Even respectable companies can catch it. Let's take a look at five dumb financial events this week that may make your head spin.
1. Lost in the Citi
What a crybaby Citigroup
Like someone who landed the homecoming queen as a prom date -- until the quarterback hero upped the ante -- Citi pouted, alone, in its rental tux. It finally backed out of the deal last night, but is going after Wachovia and Wells Fargo for punitive damages in breaking up the steal -- err, deal.
"Is it too late to book the pity party at the St. Regis in Monarch Beach?" I wrote this week, suggesting that Citi has just become the poster child of Wall Street's greed. The Wells Fargo deal is better for Wachovia shareholders and for the country's taxpayers. What does it expect, a lollipop and a regional-bank consolation prize?
2. Everybody sings the Blu-rays
DVD-rentals-by-mail pioneer Netflix
Blu-ray discs cost more, so it only makes sense that Netflix should charge more. However, this is certainly crummy timing. Netflix announces the hike during a catastrophic week for consumer confidence. It also makes the move just two days after warning investors that it fell short on its subscriber targets. Rule No. 1 on price increases: You don't inch higher when pricing elasticity and member loyalty are in question.
3. The shiatsu hits the fan
Did you miss the “St. Regis in Monarch Beach” reference earlier? That's where AIG
AIG has tried to sugarcoat the retreat, since it was a treat for independent agents, not the executives that Sen. Obama wants fired. Either way, now is as good a time as any to short high-end steakhouses, air carriers that rely heavily on first-class ticketing, and fancy-corporate-event planners. With the bailout now putting company practices under a miserly microscope, your next big executive shindig may as well be at a Chuck E. Cheese.
4. And that's tonight's word
What's the deal, Viacom
If Viacom can prove that YouTube has deliberately trampled on its copyrights to its benefit, it may have a case against YouTube. The problem is that court cases are drawn out, and now that YouTube is generating 5 billion monthly page views, does Viacom want to be portrayed as the You Tube-slaying enemy?
I'm not going to suggest that YouTube was -- or is -- right. Let the courts decide that. I just think Viacom has enough consumer brands, like MTV, Comedy Central, and Nickelodeon, that it doesn't want to be the next RIAA or the next Metallica. Even if you're right, there comes a point where you will do more damage to yourself by winning than by losing.
5. Drubbing of the bulls
Let's be blunt: If you're a bull like me, you're not feeling too bright right now. The Dow has suffered triple-digit dips through today, and you can tack on an extra day if you go back to last Thursday.
So I'll raise a glass to my fellow longs out there. We've been made dunces this week, but we'll live to fight another day.
Let's beat the dumb drum:
Longtime Fool contributor Rick Munarriz is a fan of dumb and smart business moves. Investors can learn plenty from both. He does not own shares in any of the stocks in this story, save for Netflix. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.