No fraud going on hereabouts, no sir

One hardly knows where to begin with this one:

Bob Greifeld, the chief executive of the Nasdaq stock market, admitted under oath that he did not understand how to calculate gross profit margin, one of the most rudimentary formulas in business accounting.

The admission is humiliating for Mr Greifefld, an MBA graduate who is in the thick of a hostile bid to take over the London Stock Exchange, one of the most significant moves of his career.

I’m not sure which this is a worse condemnation of, the Nasdaq, the American education system as a whole or the business schools. Anyone who lauds the stock markets as some sort of fabulous capitalist tool should first be punched in the face, then forced to read the linked article.

It also raises some very hard questions about the legitimacy of those ridiculous CEO compensation packages. The stock market is primarily one of the many means of elevating the managerial class above the genuinely productive classes, one has to cling pretty desperately to theory in the face of all the evidence to insist that it has anything to do with genuine capitalism.

One does wonder how this math wizard got that plum job. Please, please tell me that Wall Street doesn’t have its equivalent of the casting couch… brrrrrrr.

Anyhow, gross profit margin = (total revenue – cost of sales)/total revenue. It’s not exactly rocket science. I’ve learned better than to assume what will happen, but in a rational world, Nasdaq futures would be heading south on Monday.