http://smirkingchimp.com/thread/mark-ames/36001/cnbc-scams-america-againThe headline that topped the Drudge Report Tuesday morning had frightening news for its millions of readers: yet another credit ratings agency downgraded America's debt, this time to "C"--at or near "junk" status in the letter-rating scales used by the big three ratings agencies, Standard & Poor's, Moody's and Fitch. Clicking on the link takes the reader to a CNBC article <1> headlined, "US Debt Rating Should Be ‘C’: Independent Agency."
The agency turns out to be not one of the big three but an outfit called Weiss Ratings. Scratch the surface, and it turns out that Weiss Ratings is far from “independent,” and the rating, itself, is bogus. Weiss Ratings, headed by Martin D. Weiss, an investment advisor who has more than once run afoul of the SEC, downgraded US debt to "C" (which the article says is equivalent to BBB- or "near-junk" status) despite that the fact that the last time the US defaulted on external and domestic debt obligations was 1790 <2>. Even the Economist has acknowledged <3>, "Talk of Amer
Meanwhile, CNBC failed to disclose the ratings agency has a content-distribution licensing agreement with TheStreet.com <4>, whose chairman and co-founder is CNBC host Jim Cramer.
Cramer's company owned Weiss Ratings until last year, when TheStreet.com sold it back to Weiss for an undisclosed sum. Since then Weiss and Cramer's firm TheStreet.com have had a cross-licensing agreement to promote each other's ratings. CNBC should have done journalistic due diligence. But instead it hyped the rating. At the very least, portraying a ratings agency as "independent" on CNBC when a top CNBC on-air personality has a business interest in that relationship is misleading.
Jim Cramer has a history of making controversial investment calls. The host of the popular CNBC show "Mad Money" has come under fire from the New York Times and Jon Stewart's Daily Show <5> for repeatedly misleading his viewers. In a videotaped interview in 2006, Cramer boasted about how to manipulate stock prices by spreading false rumors.
More at the link --