The 5 Dumbest Things on Wall Street: Oct. 8

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5. CNN & Rick Sanchez: We Report, You Deride

You've got to hand it to Time Warner's CNN. In a bid to keep up with the gasbags at Fox News and MSNBC, CNN set out to find themselves an emotionally unhinged loudmouth anchor and ended up with ... emotionally unhinged loudmouth Rick Sanchez.

And then came last week.

Sanchez was fired from CNN last week after an appearance on Pete Dominick's Sirius XM satellite radio show, Stand Up!, in which Sanchez called Jon Stewart a bigot and rolled out the Jews control the media trope.

Sanchez no doubt had an axe to grind with Stewart and his counterpart Stephen Colbert, who have constantly mocked Sanchez on their respective shows, The Daily Show and Colbert Report, which both air on Viacom's Comedy Central. Sanchez, for his part made it just too easy. Indeed, mocking Sanchez is so easy, it almost seems wrong -- like shooting a flightless bird.

When we asked our readers what they thought about Sanchez's firing, almost 8,000 people voted in our poll and left more than 325 left comments. Somewhat surprisingly, the poll revealed that almost 62% of voters felt Sanchez should not have been fired.

So let's focus on what possessed CNN to hire Sanchez in the first place. They were after an anchor with exactly the characteristics that Colbert parodies -- the kind of "journalist" who may not really "know" something, but who feels the "truthiness" of "the moment" in their "gut." CNN wanted their populist rager, their Glenn Beck, their "crazy man standing on the corner of Main Street screaming incomprehensible jibber-jabber at the passing cars." Sanchez was all of that ... and so much less!

This whole sordid affair, in other words, is far from a surprise. When media outlets like CNN engage in a race to the bottom, they should hardly be shocked to discover that the bottom is covered in muck.

TheStreet Says: Things are hardly looking better now that Sanchez has exited. CNN is now hanging its hat on former governor and interstate prostitution aficionado Eliot Spitzer. What could possibly go wrong?

4. Frito-Lay Finally Bags Its Noisy Bag

Pepsi is proving itself to be the Ebby Calvin "Nuke" LaLoosh of logo and product design. It's throwing hard, but more often than not its pitches are hitting the mascot.

The slump has not been short, but it's certainly been costly. First there was the widely panned Pepsi logo redesign, followed in short order by an absolutely disastrous Tropicana redesign. This week, the company's Frito-Lay division finally decided to let the sun set on its biodegradable SunChips bags -- which, much like the Pepsi and Tropicana fiascos, garnered attention for all the wrong reasons.

The earth-friendly bags were introduced in April 2009 to appeal to more environmentally-conscious consumers. But in addition to the bags' actual biodegradability being called into question, the larger issue quickly became one of noise. As in, "What the hell is that noise?!?"

Simply put, the bags were loud. How loud, you ask? Sorry, what was the question? We couldn't hear you over all the noise from those damn bags.

Still, instead of actually addressing the fact that its new bags were loud enough to spook a herd of bison, Frito-Lay decided to play the "green" card. And in doing so, the company committed a hallmark mistake: putting out a "green" product that didn't "work." That's how you end up with nearly 50,000 members of a Facebook group called, Sorry But I Can't Hear You Over This Sun Chips Bag. '

So, bravo to Pepsi for damaging its brand twice: first by producing a comically loud package that annoys consumers ... and again by earning a spot in headlines for having to effectively recall its own bags.

TheStreet Says: What's it matter what we say, since you're not going to able to hear it above the din of your Sun Chips bag.

3. AIG Praises Blind Watchdog

American International Group may go down in history as being mostly responsible for one of the greatest financial catastrophes in U.S. history. But have no fear, the person whose job it was to prevent all that is walking away with a gold watch and a tidy health plan.

Robert Lewis -- AIG's "Chief Risk Officer" prior to, during and after the 2008 financial crisis -- is hanging up his obviously malfunctioning calculator and heading off into the sunset. And according to published reports, AIG CEO Robert Benmosche sent a note to employees thanking Lewis for his service, adding that his "hard work, leadership and dedication have been invaluable to the organization through tumultuous times."

Awesome, Bob. Simply awesome. Now excuse us while we go look up the definition of "invaluable."

Indeed, during his dinner speech at the going-away party, Benmosche may want to skip the fact that AIG received a $182 billion rescue package after the insurer became a giant black hole, sucking up every penny of financial risk it could find prior to the 2008 crisis. And he may want to avoid discussing how, as the chief risk officer of the world's largest risk aggregator Lewis could have, just maybe, raised a few questions before all that unpleasantness occurred.

In Lewis' defense, chief risk officers have always been the prettiest eunuchs in the financial executive boardroom. CROs at banks and insurers can go to conferences to talk about risk and hire consultants' measure risk, but they ultimately have very little to power to curtail risk taking.

Still, during hearings by the Financial Crisis Inquiry Commission, Lewis himself testified that, gosh darn it, he may have missed a few things. "What ended up happening was so extreme that it was beyond anything we had planned for," Lewis told the panel. "As it turned out, we were wrong about how bad things could get."

Well, as long as you put it that way...

TheStreet Says: Millions of Americans lose their jobs in the Great Recession, and this guy doesn't?!?

2. BP's Spill Flows All the Way to White House

BP has spent months drowning in its own oil, and now the White House gets to bathe in it, too.

The National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling laid out a damning case against the federal response to the BP oil spill, making it clear that the unquantifiable economic damage caused should hold a lien against the White House.

Indeed, the public has spent so much time hating BP -- and rightly so! -- that it's easy to forget the role the federal government played in botching the oil spill response effort. The Minerals Management Service was ushered out of existence as a result of its too cozy relationship with oil companies.

This week's report, however, shows that for every overly optimistic, if not outright misleading, comment from former BP CEO Tony Hayward and BP chief operating officer Doug Suttles, the federal government was in lock step in trying to make the problem seem like a minor environmental hiccup.

The ineptitude of the federal response wasn't just limited to its overly optimistic early assessment. It was also characterized by a sudden reversal of strategy. The federal government moved from downplaying the oil spill to launching the largest federal response in the nation's history. The American public heard Obama laud the government for the size of its response in countless speeches as his poll numbers slipped.

Now the national commission makes clear that Obama's massive response wasn't simply proportional to the magnitude of the oil spill crisis, but had an inverse relationship to this glass-half-full rhetoric. As the low-balling oil flow estimates became untenable, the federal government hoped the sheer number of resources committed to the Gulf of Mexico would save its image. Think of it as an environmental shock and awe campaign.

And if that's not enough, the national commission was given one final gift by the White House. Once the spill was under control, the federal government was back at the game of saying "no biggie," issuing a report once the well was capped that said that almost all of the oil that had once flowed across the surface of the Gulf of Mexico was either contained or eliminated.

TheStreet Says: The commission suggests that Obama was standing way too close to BP. And when you stand too close to millions of gallons of spewing oil, it tends to stick to your shoes.

1. Gap Loves New Logo Enough to Abandon It

Quick, quarantine your C-suites! Apparently, Pepsi's virulent strain of logo-killing mad-executive disease has spread to the offices of Gap.

This week, the once iconic and culturally relevant retailer quietly introduced a stunningly dull redesign of its logo to its Web site. No fanfare. No 80-foot billboards in Times Square. Not even a dashed-off press release filled with marketing drivel about how the new logo reflects man's constant drive to achieve universal harmony through ill-fitting jeans and multi-colored scarves. Hey, at least that would have showed they cared.

No, there was nothing. And in lieu of all that, within a day, the design community had pounced, with vitriol and mockery exploding on blogs and on Twitter. As Bobby Solomon on art and design blog Kitesunenoir.com put it, "This is some shabby work.... There was a lot of brand equity in that big blue square and they didn't move far away enough from the source for this logo to even begin to feel new or exciting."

A lot of equity indeed. According to a study conducted by Interbrand, Gap is the 84th most-valuable brand in the world, valued at nearly $4 billion.

Then, with the backlash building, Gap decided to make everything worse by backtracking in the worst way possible. The company took to its Facebook page and Twitter and declared that it was "thrilled to see passionate debates about the logo unfolding!" (Uh, no debate here ... the logo just sucks....) "So much so, we're asking you to share your designs. We love our version," (read: "Oh my god, what the hell have we just done?!?") "but we'd like to see other ideas." (Read: "like ideas on how we can save our jobs; OMG, we are so fired.") "Stay tuned for details in the next few days on this crowd sourcing project."

See, this isn't a massive marketing gaffe. No, no, no. It's the start of a "crowd sourcing project." And one that was oh-so-cleverly never introduced as such. Gotcha! Oh, and Gap "loves" its new logo, but is totally willing to chuck it out the window should anyone else come up with something better. And for free, please.

Look, tinkering with your logo, even online, is a sure fire way to draw negative publicity -- just ask Tropicana! But doing so in such a half-assed way begs significant questioning of Gap's management. Would Coke "crowd source" a redesign of its script font, or Nike slap a smiley face on its Swoosh? So Gap, maybe it's not the logo that's the problem here. Maybe the problem is you.

TheStreet Says: Turns out, there are plenty of good ideas out there. Perhaps Gap could take a half dozen of them into the fitting room?

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