Rick Santelli Pushes Conspiracy Theory About S&P Lawsuit

Notorious anti-government ranter and CNBC pundit Rick Santelli says he's suspicious about the motives behind the government's new lawsuit against S&P.

The suit alleges that S&P knowingly slapped higher-than-deserved ratings on mortgage bonds so that they could get more business from banks. Many of the subprime mortgages behind these mortgage bonds went sour when the housing bubble burst around 2008.

"The water-cooler talk obviously is: Is there a political issue here?" Santelli said on CNBC Tuesday. "A lot of this talk started to hit some real saturation right around the summer of 2011 when S&P, the only rating agency, downgraded the U.S. We lost our AAA credit rating."

"There's a cynical side to everything when you deal with the government," he added.

S&P stripped the U.S. government of its AAA rating in August of 2011 during Congress' standoff over the debt ceiling, but the government still is borrowing at historically low interest rates -- indicating that the downgrade didn't scare investors off.

Floyd Abrams, the lead lawyer for S&P, floated a similar theory on CNBC on Tuesday, saying: "Is it true that after the downgrade, the intensity of this investigation significantly increased? Yeah."

Some say that rating agencies -- including S&P, Moody's and Fitch -- contributed to the financial crisis by slapping top ratings on subprime mortgages. Critics say that as a result, investors piled too much money in these mortgage bonds.

For his part, Santelli didn't dismiss the criticisms of the rating agencies.

"I think rating agencies should be gone after if they had any role in the credit crisis," he said. "Anybody who had a role in the credit crisis should be a target." The government's challenge, he said, will be establishing that S&P had the "intent to defraud or lead investors down the wrong track."

(Hat tip: National Review Online.)

Earlier on HuffPost:

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• Joe Kernen Calls Paul Krugman A 'Unicorn'

  <a href="http://www.huffingtonpost.com/2012/07/11/paul-krugman-cnbc_n_1664771.html">CNBC host Joe Kernen</a> told Nobel Prize-winning economist Paul Krugman on Squawk Box in July that he resembles a "unicorn." <a href="http://krugman.blogs.nytimes.com/2012/07/11/zombies-on-cnbc/">Krugman bashed the show</a> on his New York Times blog after his appearance, prompting <a href="http://www.huffingtonpost.com/2012/07/12/cnbc-host-joe-kernen-paul-krugman_n_1668052.html">Kernen to demand an apology</a>. He never got one.

• Rick Santelli Shouts, Runs Away

  <a href="http://www.huffingtonpost.com/2012/11/30/rick-santelli-rant-shame-wealthy-taxman_n_2217882.html">CNBC personality Rick Santelli</a> got into a shouting match with CNBC economics reporter Steve Liesman in November, yelling: Democrats "say 'fairness' and then they run to try to beat the taxman." He stormed out after his rant.

• Joe Kernen Calls Paul Krugman A Communist

  <a href="http://www.huffingtonpost.com/2012/09/10/joe-kernen-paul-krugman-dean-baker_n_1871978.html">CNBC host Joe Kernen</a> called economists Paul Krugman and Dean Baker "co-communists" in September, while <a href="http://www.huffingtonpost.com/2012/09/08/erin-burnett-federal-reserve_n_1866971.html">pushing the discredited argument</a> that the Federal Reserve has caused gas and food prices to rise, which <a href="http://www.huffingtonpost.com/2012/09/08/erin-burnett-federal-reserve_n_1866971.html">Krugman and Baker</a> have challenged.

• Steve Liesman Cuts Off Neil Barofsky

  <a href="http://www.huffingtonpost.com/2012/08/22/neil-barofsky-cnbc-krugmanned_n_1821717.html">CNBC personalities</a> talked over ex-TARP watchdog Neil Barofsky while interviewing him in August. <a href="http://www.huffingtonpost.com/2012/08/22/neil-barofsky-cnbc-krugmanned_n_1821717.html">Barofsky wrote on Twitter</a> after the episode: "Definitely got Krugmanned."

• Jim Cramer Gets Emotional About Vikram Pandit

  <a href="http://www.huffingtonpost.com/2012/10/16/jim-cramer-vikram-pandit_n_1970155.html">CNBC anchor Jim Cramer</a> looked shaken -- nearly on the verge of tears -- as he explained in October why Citigroup forced out then-CEO Vikram Pandit.

• Rick Santelli Rants About Jobs Report

  <a href="http://video.cnbc.com/gallery/?video=3000121420&play=1">Rick Santelli yelled about the jobs report</a> in a shouting match with Steve Liesman in October. "I'm not implying anything!" he screamed as Liesman tried to ask him a question. "I'm honest! ... What else do you want? What else do you need?"

Source : huffingtonpost[dot]com