What would happen if a brilliant hedge fund manager took over a retailer and ran it with a rigid focus on financial metrics, putting aside all that soft stuff about branding and marketing?

Take a look at Sears Holdings (NASDAQ: SHLD), and you have your answer. While macroeconomic trends haven't exactly been the company's friend, the stock has plunged from close to $200 per share in early 2007 to its current price of $66 per share. Just a few months ago it was trading in he mid-$20s.

General Growth Properties (NYSE: GGP) has changed its bankruptcy counsel from Sidley Austin LLP to hire Weil, Gotshal & Manges LLP, according to The Wall Street Journal (subscription required). The latter firm has also worked on the Lehman Bros. bankruptcy.

The company has warned that it may have to file for bankruptcy if it can't find a way to restructure the more than $27 billion in debt that will come due over the next few months.

Back in January 2008, then-Marketwatch columnist Herb Greenberg raised red flags over General Growth Properties' debt load. The company responded with a press release saying that "The Company is absolutely not in any danger of having to contemplate a bankruptcy filing, and the Company unequivocally has no intention of doing so." The company added that it had assets that "can be used through a variety of means to raise substantially more capital than could be required, even under the most "doomsday" of future possible scenarios for how the current commercial retail real estate markets might evolve over the next two years."

Well here's the doomsday scenario and there are the bankruptcy lawyers. But don't worry: The press release added that "Actual results may differ materially from the results suggested by these forward-looking statements, for a number of reasons."

TheStreet.com's Jim Cramer says both oil futures and equity futures can move these hot issues.

Will the futures pull down the oil and gas stocks today? No, I don't mean the oil futures, I mean the equity futur

Last week when oil exploded, we caught two days of trading that dropped the stocks hard. We caught a bit of a bid in the nat gases like Chesapeake (NYSE:CHK) and Devon (NYSE:DVN) but at the end of the day, but the stocks were truly overwhelmed by the simple fact that they are in the indices.

This pattern has really held down the integrateds: last week Conoco (NYSE:COP) should have exploded, but it couldn't because it is such a big part of the S&P. Chevron (NYSE:CVX) and Exxon (NYSE: XOM) are no different.

The natural gas stocks are not as big a factor, but they can be rocked down without a problem.

I am not saying to avoid looking at the oil futures. They can control the stocks. I am saying that the equity futures tide can take down anything, even when the oil futures spike hard.

It's a sad week for skeptical investors as MarketWatch columnist Herb Greenberg has delivered his last column for the site. He is leaving Dow Jones to start his own research firm.

For his last piece, Greenberg offers readers parting advice. I would suggest printing the column out and consulting it before making your next investment. Following these tips won't help you avoid every bad investment, but it'll probably eliminate most.

Greenberg's tips are these: the numbers don't lie -- pay attention to the numbers and ignore the narrative. Greenberg writes that "some short sellers and forensic analysts don't like to talk to companies. They want to avoid the spin or the face-to-face meeting that can create a psychological connection that may skew what otherwise would be black-and-white analysis. Don't ever underestimate the power and influence of the human factor."

Greenberg also suggests paying attention to quality of earnings, understanding the flexibility that exists within GAAP, and -- this one might be a little trite but it's still true -- not confusing stocks with companies. Greenberg also urges investors to "instead of asking how much you can make, first ask how much you can lose. That is what the smart guys do."

Although he's been the brunt of a lot of vitriol from conspiracy theorists and investors in bad companies, Herb Greenberg has been right more often than not -- which is a lot more than can be said for just about any other financial journalist.

On May 1st, financial journalism will be losing one of its best voices.

In a post on his blog this morning, Herb Greenberg wrote that "I'm leaving MarketWatch, Dow Jones and traditional journalism to start an independent research firm with my friend, Debbie Meritz, an analyst/accountant who has been a very good source of ideas in the past."

In addition to being an all-around great guy, Herb is one of the best scambusters in the business, calling shenanigans at companies like Krispy Kreme (NYSE: KKD) and Novastar Financial long before analysts or the SEC had caught a whiff of anything.

He's also demonstrated tremendous bravery, continuing to write about Overstock.com (NASDAQ: OSTK), even after libelous comments by its CEO/village idiot Patrick Byrne referring to him as a "crooked reporter."

Herb will be leaving MarketWatch May 1st, and there may be some downtime before his research firm begins alerting investors to hype and exaggeration. So if you're a crooked CEO looking to dupe investors, you might have a narrow window of opportunity before Greenberg is back on the case.

After I defended Jim Cramer's seemingly bullish comments on Bear Stearns (NYSE: BSC) -- and received some hate-mail for it -- I'm now feeling obligated to go back to slamming Mr. Cramer.

Back in July, Cramer said in an interview for TheStreet.com (see YouTube video below) that "if every loan that was subprime in 2006 blew up, we would still not notice it ... It has no relevance whatsoever ... it's been divided and split among so many different entities that no one guy is actually being hurt other than the dumb guy who ran Bear Stearns."

Well James Cayne got hurt -- and so did every other shareholder in the company. Cramer also said, in a stunning display of condescension that financial journalists are trying to "look like they in the room with the big boys. It's a fascination with trying to prove that you know as much as the hedge funds."

It looks like the omniscient hedge fund masters of the universe got it wrong -- and journalists like Herb Greenberg got it right.

Herb Greenberg has an excellent column (subscription required) in this weekend's Wall Street Journal, raising questions about the euphoria investors are feeling over the IPO of Visa Inc. (NYSE: V). First, Visa's disclosure of risk factors includes more than 8 pages of legal and regulatory risks -- much of it is boilerplate but that's a lot of legal issues.

Other risk factors facing Visa include heavily reliance on a few customers and, gasp, a slowing in the growth-rate of transaction volume.

I certainly don't claim to be an expert on the Visa IPO, but I'd be wary of diving in here for a few other reasons. The Visa IPO was, in part, inspired by the tremendous success of MasterCard's (NYSE: MA) 2006 IPO, which is up more than 300%. Here's the thing: the success of that IPO should have nothing to do with whether you buy or don't buy shares of Visa. That's past, and it's completely irrelevant. But I think that a lot of people are buying the Visa IPO because they "missed out" on the MasterCard run-up, and that's a recipe for disaster. MasterCard's strong performance over the past year and half is no way a harbinger of great things to come for Visa shareholders.

In addition, I have the same skepticism of the deal that I have with any IPO. Visa was not in desperate need of the $17.3 billion it raised and presumably went public now because they felt that they would be able to sell shares at a strong valuation. Buying shares right after the IPO is like buying clothing off the rack at Nordstrom's: You ain't gonna get any bargains.

One of the first things you learn in economics is that incentives matter -- and that if you get the incentives wrong, the results can be, well, interesting. Exhibit A: the subprime mess.

In an interesting column in this weekend's Wall Street Journal, Herb Greenberg writes (subscription required) about Lululemon (NASDAQ: LULU), where the terms surrounding options grants put top executives in a position to serve the private equity backers rather than other minority shareholders who bought the shares during or after the IPO -- at a much higher price.

In the case of Lululemon, CEO Robert Meers saw some of his options vest based on when the private equity backers cashed out. According to Greenberg, "The vested amount would immediately leap to as much as 40% if private-equity investors sold; the actual amount was based on a sliding scale tied to how much they actually made."

Options that vest based on some sort of performance are great. But I'm skeptical of options that vest based on when private equity backers who paid a tiny fraction of what other investors paid for their stake in the company cash out.

I'm wary of companies taken public by private equity firms in general. The buyout shops are masters of the art of "buy cheap and sell dear," and "buying dear" tends to be a great way to lose money in the stock market.

Quoted in a piece in the Sunday New York Times, Bruce Greenwald (author of the terrific Value Investing: From Graham to Buffett and Beyond) sums up Eddie Lampert's problems at Sears Holdings (NYSE: SHLD) beautifully: "He did really well on Autozone. Most of his stocks are retail stocks, and he has done really well with them. So he decided he was a genius at retail, and it didn't occur to him he could be wrong about it. He believed his own press."

I would argue that the problem might even run deeper than that: Lampert wanted to be seen, and to see himself, as more than just a great investor. He wanted to become a great manager.

It's somewhat similar to former all-star slugger Jose Canseco, who decided he wanted to try pitching. He promptly injured his arm and missed the rest of the season. His attempt at pitching hurt him as a hitter.

Lampert's fall from grace has been steep and rapid. We used to talk about how shares of Sears were trading at a "Lampert premium," based on the idea that his investment prowess would lead to great returns on capital for the struggling retailer.

Now, with Herb Greenberg recently having named him the worst CEO of 2007, shares of Sears are trading at a Lampert discount and are, according to many, currently valued at well below the company's break-up value. There may be value to be had in Sears, but Lampert's struggles provide an important lesson for investors: great investors aren't necessarily great managers, but, like Carl Icahn did with TWA, they might not be able to help themselves from giving it a try.

Dealbook is reporting (although speculating is probably a better word) that Krispy Kreme Doughnuts (NYSE: KKD) may be preparing to put itself up for sale. This shouldn't come as too much of a surprise given the problems Krispy Kreme has experienced over the last few years.

Just in 2007, Krispy Kreme fell from nearly $14 a share to under $3. Although this is bad enough, the long-term picture is even worse. In 2003, Krispy Kreme hit $50, so the five year performance is something like negative 90%. While health fads are in part to blame, with carbohydrates being vilified in many popular diets, most analysts suspect that Krispy Kreme's management is largely responsible for the poor performance.

Marketplace's Herb Greenberg, who has long thought that Krispy Kreme's old CEO needs to go, is the main source of speculation that Krispy Kreme may be looking for a buyer. He argues that the recent resignation of the old CEO, Daryl G. Brewster, suggests that the board is finally getting serious about turning things around. More importantly, the new CEO, James H. Morgan, has an investment banking background, and his involvement suggests that the company is looking for outside intervention.

Herb Greenberg reported on CEOs on the hot seat in his latest column. He included a reference to Sears Holdings (NYSE: SHLD) CEO Alwyn Lewis, who may be poised to serve as sacrificial lamb for the company's failed turnaround -- which should probably be blamed on chairman Eddie Lampert, because he controls the company's investments and failure to invest in its stores.

Greenberg notes that, "Still, with a 2006 salary of $1 million and total compensation of $4.8 million, it would appear that unless Sears reports exceptional fourth-quarter results, Lewis may be on the path to scapegoat, which might not be so bad: If he's fired for what the company calls "constructive termination," he will get a cash payment of $3 million with a total package valued at $22.9 million. A Sears spokeswoman declined to comment. "

I've heard the phrase "constructive termination" before but never really given it much thought. Lewis' employment agreement defines this phrase as Lewis' voluntary resignation following a board stripping him of his titles, an adverse change in his responsibilities, or even a reduction (heaven forbid!) in his base salary and/or bonus.

This is about as great of an example of management gibberish as you'll ever come across -- and sadly it exists in the employment agreements of many executives. Constructive termination means resigning after you've essentially been fired. Calling it constructive is like saying that kicking someone in the groin for giving a wrong answer in math class is constructive criticism.

It would appear that this idea of constructive termination is a key factor in allowing executives who are essentially fired to walk away with huge, or even moderate, severance packages. Why should someone who's fired for bad performance even get severance?

Hopefully shareholder activists will take this issue on in the future.

In today's Wall Street Journal, Herb Greenberg picks Circuit City Stores' (NYSE: CC) CEO Philip Schoonover as the worst of 2008. He also includes Sears Holdings (NYSE: SHLD) CEO Aylwin Lewis in that mix.

It's an interesting coincidence to me. On Monday I appeared on CNBC to discuss my picks for the three best and worst CEOs of 2007. Two of my worst CEOs were Schoonover and Eddie Lampert of Sears. I agreed with Greenberg's pick of Lampert as the worst CEO of 2007 and even though Lampert -- who reportedly gets deeply involved in operational decisions -- is not a CEO, but chairman. Lampert underinvested in Sears' stores -- he spent $1.33 a square foot, which is 20% of what its peers spend -- and its stock fell 39% in the last 52 weeks.

But in my mind Schoonover is significantly worse. His 3,400 person headcount cut in March 2007 actually helped out Circuit City's competitor in a very direct way. That's because customers who buy electronics value the expertise of the sales staff. And in canning those highly paid sales people through what Schoonover called "transformation work," he freed those salespeople and their customers to take their business to Best Buy (NYSE: BBY). As I pointed out, in my post, this "transformation work" helped Circuit City's sales decline by 3.1% while Best Buy beat revenue and profit growth expectations.

Ben Stein generated some controversy with his column a few weeks back, alleging a conspiracy between Goldman Sachs' (NYSE: GS) economist and the firm's shorting of the mortgage market. Herb Greenberg called it "classic take-no-prisoners, grumpy Ben Stein."

In his latest take-no-prisoners, grumpy screed, Stein discusses Wall Street's massive breach of fiduciary duty: "The biggest of the big names were among the most aggressive in betraying their clients' trust, as I see it. Some of the biggest names were selling securities that they -- apparently -- barely understood themselves. In so doing, they exposed their buyers, and their stockholders, to immense losses. (Think Merrill Lynch, Bear Stearns, Lehman Brothers, and many others.) Other major players, including Goldman Sachs, were aggressively shorting the very same sort of products they were underwriting."

Of course, everyone makes mistakes -- and selling billions of dollars worth of securities you don't understand at all is a pretty big one.

But the problem as I see it as that these Wall Street firms that messed up badly aren't taking responsibility where it counts -- the pocketbook. Note to Stan O'Neal: a $160 million severance package isn't accountability. Wall Street bonuses soared this year, even as stock prices plummeted for most financials, a sure sign that, on average, Wall Street bonuses are not a reflection of value creation.

That's a big part of the problem that had led to massive unchecked risk-taking: No one making the bad decisions stands to lose much if they backfire.

"Heads we win, tails our bonuses still rise 14%" is not the way to run a public company, and investors should be outraged.

Some nasty things have been said about Gradient Analytics, even resulting an SEC investigation of the firm that was dropped in short order.

But as Herb Greenberg points out in his latest column (subscription required), the research firm has about as stellar a track record as you will find, having been among the first to raise questions about accounting at Krispy Kreme Doughuts (NASDAQ: KKD), Children's Place (NASDAQ: PLCE), and Biovail (NYSE: BVF).

Now, in a report available free on the firm's website (a must-read if you are even thinking about buying financials), Gradient wonders about the accounting at Washington Mutual (NYSE: WM), Citigroup (NYSE: C), Wachovia (NYSE: WB), Wells Fargo (NYSE: WFC) and, my personal (least) favorite, Countrywide Financial (NYSE: CFC).

According to Gradient's report, the financial statements of these firms raise serious questions with respect losses being hidden on assets that are being held to maturity (essentially failing to take appropriate writedowns), shifting loans into "assets held for maturity" to avoid taking writedowns, the use of "not necessarily fair market values," off-balance sheet arrangements, and the concealing of the "after-effects of aggressive gain-on-sale accounting."

I know it's the end of the year. We're all bombarded with the "Top X of 2007" or the "Worst Y this Year." I'm actually thinking of making the top lists of the top lists. It's like Kramer's coffee table book about coffee table books on Seinfeld.

Anyway, Herb Greenberg of Marketwatch threw his hat into the ring this morning with his vote cast on the worst CEO of 2007. The winner (or is it loser?): Eddie Lampert, CEO of Sears Holdings (NASDAQ: SHLD). Herb says of Lampert, "So far, for all of Sears, including Kmart, the strategy [of focusing on profitability over revenue growth] has failed miserably. Not only have same-store sales (which Lampert says are "overrated" as a metric) gone deeper into the red, but gross margins, Ebitda and operating income for Kmart are also going in the wrong direction."

I'd like just to posit the idea that while Lampert might have failed as a CEO of Sears, the retail store, turning around the old-school retailer hasn't really been his main priority. He's trying to follow in Warren Buffett's Berkshire Hathaway (NYSE: BRK.A) shoes by using a cash flow business as the crux of an investment empire. So investors should begin to judge Lampert's firm as a holding company, not just on Sears' results.