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Thread: Dumbest Moments in Business 2009

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    A Self Important Senior Contributor troung's Avatar
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    Dumbest Moments in Business 2009

    Dumbest Moments in Business 2009
    Tuesday, December 15, 2009provided byCNNMoney.com

    Loudmouth CEOs, islands in the desert and bringing dead celebrities back to life. Our annual list of the business world's bonehead plays marches on.

    Dear Chrysler Dealer: Good-Bye

    Chrysler guillotined 25% of its dealership network in remarkably brutal fashion: It dispatched the bad-news letters by UPS the same day it went public with its list of 789 dealerships slated for termination. That meant many dealers found out from the press -- not Chrysler -- that they'd been whacked.

    More from CNNMoney.com:

    • That Was Dumb: Using Chris Farley to Sell DirecTV

    • Dumb Moment: Goldman Sachs Doing ‘God’s Work’?

    • More Dumbest: Pee Before Boarding the Plane, Please

    General Motors also culled its dealer network this year, but at least it gave those it blackballed a year to wind down their operations. Chrysler offered less than 30 days. It was a financial wipeout, with dealers forced to liquidate their inventories for pennies on the dollar. Hundreds of brand loyalists that tried to "grab life by the horns" ended up getting gored.

    By Stacy Cowley, CNNMoney.com small business editor

    Trading GM's Worthless Stock

    GM couldn't sell enough cars to keep out of bankruptcy, but plenty of its worthless stock sure got sold afterwards.

    The old version of the company, now known as Motors Liquidation, was left with GM's debt, unwanted plants and dealerships, and its old shares, which trade under the symbol MTLQQ for about 60 cents apiece.

    Oddly enough, investor demand has been brisk even though GM and the Securities and Exchange Commission have warned that the shares will become utterly worthless once the entire bankruptcy process is complete.

    The last week of August saw more MTLQQ shares change hands than shares of blue chips such as Procter & Gamble, Coca-Cola or Apple.

    By Chris Isidore, CNNMoney.com senior writer

    U.S. Debt Is 'Safe.' Seriously. Stop Laughing

    Geithner2.gif
    Courtesy: U.S. Department of the Treasury

    Following a speech at Peking University on his first trip to China as Treasury Secretary, Tim Geithner was asked to share his thoughts about the safety of Chinese investments in the United States.

    They are "VERY safe," he quickly asserted.

    At which point the audience burst out laughing.

    Apparently, the audience was amused not only by the answer's substance, but by the flat "don't worry your little young heads about it" certainty with which Geithner insisted that China's U.S. debt holdings were A-OK. Because as even a group of Chinese college kids understood, that's just not as clear as the Treasury Secretary insisted it was.

    By Bill Powell, Fortune contributor

    Paid for Not Showing Up

    Anthony Armatys is facing up to six years in prison for his dumb move. But he's not the only dummy in this story.

    Armatys accepted a job in 2002 with telecom equipment maker Avaya but then changed his mind before he started. He was already in the payroll system however, and the company started depositing his six-figure salary into his checking account.

    For five years, Armatys did not notify Avaya of its error, but his attempt to make an early withdrawal from his 401(k) prompted an investigation that led to his arrest.

    In October Armatys pleaded guilty to theft and was ordered to repay the $470,995.53 in compensation he received. He faces full sentencing in January.

    --C.I.

    Credit Card Reform Falls Short

    When President Obama signed sweeping credit card reform legislation into law in May, a resounding victory was declared for consumers: Finally, some of the most abusive industry practices like arbitrary interest-rate hikes would be outlawed.

    Just one small problem: Lawmakers gave issuers till February 2010 to fully comply with the new law. Meanwhile, issuers have rushed to raise interest rates, impose new fees and cut credit limits.

    The median rate on credit cards surged 13% to 23% from December 2008 to July 2009, according to a study by the Pew Charitable Trusts. Meanwhile, a bill to expedite the credit card reforms, the Credit Card Rate Freeze Act, has gone nowhere. When the new law kicks in next year, consumers will have more protection. But for now, more consumers may be hurt than helped.

    By Donna Rosato, Money Magazine senior writer

    AIG: The Country's Most Tone-Deaf CEO

    AIG1.gif
    Courtesy: AIG

    AIG's new chief executive Robert Benmosche had a rep for shooting from the hip before he was hired to lead the bailed-out insurer in August, and it didn't take him long to start taking shots.

    In his first meeting with AIG employees, Benmosche called Congress a bunch of "crazies," saying he would tell them to "stick it where the sun don't shine" if he was called to testify on Capitol Hill. He also announced that New York Attorney General Andrew Cuomo, who had been investigating AIG, "doesn't deserve to be in government."

    Benmosche didn't stop with the barbs. After board members tried to rein him in, he asked for a private jet for personal use and later threatened to quit over government-prescribed pay restrictions.

    It's not easy to feel sympathy for politicians, regulators and overpaid corporate board members, but Benmosche is doing his best to make them look good.

    --By David Goldman, CNNMoney.com staff writer

    Free Bernie!

    Let the punishment fit the crime? Not if you're Ira Lee Sorkin, attorney for Ponzi swindler Bernie Madoff.

    When a client is convicted, a defense attorney's top job is to lowball the judge on sentencing. So what did Sorkin request for Madoff, mastermind of the nation's biggest pyramid scheme that bilked investors out of $20 billion?

    12 years.

    Sorkin argued that his request amounted to a near-life sentence for his 71-year-old client, and would "sufficiently address the goals of deterrence, protecting the public and promoting respect for the law."

    The judge disagreed and gave Madoff the maximum sentence of 150 years.

    By Tom Ziegler, CNNMoney.com producer

    Ken Lewis Leaves BofA Hanging

    What Ken Lewis wanted, Ken Lewis got. During his eight-year tenure as Bank of America's CEO, he embarked on a dizzying series of acquisitions to create the nation's biggest financial services company.

    But when his last two big buys -- toxic-mortgage giant Countrywide and dead-on-its-feet bank Merrill Lynch -- drew too much scrutiny from regulators and shareholders, Lewis packed up his golden parachute last October and bailed.

    He's staying until the end of the year, but without any real plan of succession. Bank of America is still struggling to find anyone willing to take on the headaches Lewis created. Any takers?

    --By David Ellis, CNNMoney.com staff writer

    Silverdome Sells for Less Than a House

    Silverd1.gif
    Courtesy: Williams & Williams

    It's been host to a Super Bowl, a World Cup, Michael Jackson and the Pope, and now the Pontiac Silverdome has been sold for a fraction of what it cost to build.

    The 80,000-seat Silverdome was the National Football League's biggest venue when it was built in 1975 for $55.7 million. But when the Detroit Lions moved to Ford Field in 2002, the stadium went largely unused, and the upkeep became too much for its owner, the city of Pontiac.

    In an auction back in November, an unidentified Canadian real estate company had the winning bid -- of $583,000, which is about 1% of its original cost.

    --T.Z.

    Trying for a $15 Trillion Tax Refund

    Between Wall Street bailouts, auto bailouts and all the stimulus programs, Uncle Sam sure seems to be doling out the dollars these days.

    But $15 trillion for one guy? That's what Marlon Moore tried to get by filing a series of false tax returns under different aliases to the tune of $5.959 trillion, $2.975 trillion, and $6 trillion. And just for good measure, he filed one under his own name for $10 million.

    The problem, among many others, is that the U.S. government only took in some $2 trillion in 2008. This fall, Moore was convicted of trying to bilk Uncle Sam and sentenced in Miami to two years in prison.

    By Steve Hargreaves, CNNMoney.com staff writer

    See the rest of 2009's Dumbest Moments in Business
    Copyrighted, CNNMoney. All Rights Reserved.
    To sit down with these men and deal with them as the representatives of an enlightened and civilized people is to deride ones own dignity and to invite the disaster of their treachery - General Matthew Ridgway

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    FreeGeneral Senior Contributor Big K's Avatar
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    789 dealership????

    how many 500 000- 1 000 000 people town are there in USA?
    Love all, trust a few, do wrong to none; be able for thine enemy rather in power than use; and keep thy friend under thine own life's key; be checked for silence, but never taxed for speech.

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    Senior Contributor Rumrunner's Avatar
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    The Chris Farley commercial even offended me, and I'm about as moral-less as they come from spending a few years in the Advertising game. It was on par with Fred Astaire dancing with a vaccum cleaner.
    You know JJ, Him could do it....

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    Defense Professional Dreadnought's Avatar
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    1) Freddie Mack
    2) Fannie May
    3) The BIG bailout the taxpayers funded and will never be repaid.
    4) The first stimulis bill.
    5) Leaving this space open for the Heathcare debacle.
    Fortitude.....The strength to persist...The courage to endure.

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