Stupidity is contagious. It gets us all from time to time. Even respectable companies can catch it. As we do every week, let's take a look at five dumb financial events this week that may make your head spin.
1. The price is plight
You have to admire the moxie of Toll Brothers
"Congress has allocated hundreds of billions of dollars to reset mortgages, help people who are in foreclosure, and protect those who have been the victims of rapacious lending practices," CEO Robert Toll said this week. "We believe all of these goals are very worthy. However, we believe that, if home prices are not stabilized, these efforts will be for naught, more mortgages will go under, and the taxpayers' money will have been wasted."
Nice try. It's easy to see why Toll wants home prices to stop falling. The average contract for the luxury developer this past quarter was nearly 15% lower than it was getting the quarter before. However, why delay the inevitable with taxman trickery like rolling out a buyer tax credit? There's a glut of vacant pre-existing homes on the market. Supply and demand logic points to lower prices, and it is then that stability will happen naturally. If Toll doesn't like that, maybe it should stop building homes. At least it will be helping with the excess supply that way.
2. Farewell to Fred, Ethel, and Lucy
3. EA finally puts gamers "in the game"
In a move to cash in on Wii's popular lifestyle gameplay, Electronic Arts
That's good. What isn't good is the timing. EA Sports Active isn't coming out in time to score holiday sales this year. It's not even hitting the market in January, when folks scramble to join gyms to help deliver on their New Year's resolutions. Instead, EA is releasing the game in March, just when the weather starts to improve and folks can get real exercise outside. D'oh!
4. What's not in a name?
Investors buying into Bidz.com
To B2B or not to B2B? Indeed.
5. Seeing stars, not bucks
How sad is it when Starbucks
Does it make you scratch your head to find that after the company earned $0.71 a share in fiscal 2008, a 7% slip in same-store sales this new fiscal year will generate the same adjusted bottom-line result? It shouldn't. It's a testament to the company's attention to cost-cutting. However, why is a 7% loss the worst-case scenario? The economy isn't getting any better, everyone from McDonald's
Beating the dumb drum:
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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. 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.