The Five Dumbest Things on Wall Street This Week

2. Sprint Hangs Up

The customer isn't always right at Sprint (S - Cramer's Take - Stockpickr).

The Reston, Va., telco surprised some users this month by unilaterally cutting them off. About 1,200 wireless subscribers got letters saying their accounts would be terminated because they called Sprint too often.

"While we have worked to resolve your issues and questions to the best of our ability," the cutoff letters read, "the number of inquiries you have made to us during this time had led us to determine that we are unable to meet your current wireless needs."

Of course, it has been ages since Sprint was able to meet anyone's wireless needs. In the first quarter, Sprint lost 220,000 postpaid wireless users -- adding to the fourth quarter's 306,000-postpaid-user loss. Meanwhile rivals AT&T (T - Cramer's Take - Stockpickr) and Verizon (VZ - Cramer's Take - Stockpickr) each added more than a million net postpaid users in each quarter.

Chasing away subscribers looks like an odd strategy when your best customers have been fleeing in droves. But that's not a subject Sprint is eager to discuss.

"We're changing the conversation about wireless," marketing chief Tim Kelly said late last month in announcing a new marketing push. While competitors "harp on the industry's shortcomings such as dropped calls, minutes and pricing plans," Kelly added, Sprint will embrace "the awesome ways our innovative technology adds real value to the lives of our customers."

The few who remain, that is.

Dumb-o-Meter score: 91. Sprint says improving customer service "is our No. 1 priority," Reuters reports.

3. Double Downgrade

Standard & Poor's has had a very poor week.

On Tuesday, the New York credit rating agency finally swung into action on the sinking market for subprime mortgages. The firm said it was reviewing some $12 billion worth of residential mortgage securities for a possible downgrade.

The timing raised eyebrows, since the market for subprime loans -- mortgages issued to homebuyers with poor credit histories -- blew up several months ago. Rising defaults and delinquencies took down dozens of small lenders and a few big ones. The biggest blow-up was New Century Financial (NEWCQ - Cramer's Take - Stockpickr), which filed for Chapter 11 more than three months ago.

"Why now?" one fund manager asked on S&P's Tuesday morning conference call. "Delinquencies have been a disaster for many months. It couldn't be that you just woke up to it."

Don't put anything past S&P, though.

The firm quietly admitted Thursday that the ratings watch actually covers just $7 billion worth of securities -- not $12 billion as reported Tuesday.

The $5 billion miscalculation didn't exactly help S&P's cause with its Wall Street skeptics. The company had said Tuesday that it held off on reviewing the ratings because delinquency data needed more "seasoning."

But there's no sugar-coating it: S&P has been asleep at the switch.

Dumb-o-Meter score: 88. "It was an error and we corrected it," an S&P spokesman told Reuters on Thursday. "It was human error. It is what it is."

4. Red Ink Blot

The future is looking inky at Lexmark (LXK - Cramer's Take - Stockpickr).

The Lexington, Ky., printer company stumbled into another earnings debacle Monday. Lexmark issued weak profit guidance for the second and third quarters, pointing to a price war in the market for inkjet printers and cartridges. Shares fell 6% in heavy trading.

Disappointing investors is nothing new at Lexmark, which is struggling under pressure from from printer giant Hewlett-Packard (HPQ - Cramer's Take - Stockpickr) and resurgent Kodak (EK - Cramer's Take - Stockpickr).

Lexmark has tried to grow its way out of this fix, but success has been fleeting. Back in the fall of 2006, for instance, Lexmark warned that fourth-quarter numbers would fall short of Wall Street's expectations.

"We have more work ahead," CEO Paul Curlander said Oct. 24, "but we continue to invest in the brand, market and product initiatives that support our long-term growth strategy."

Curlander sounded the same theme this past spring, when Lexmark cut profit targets again.

"Given the strength of our product line, we are now increasing our investment in demand generation in all customer segments," he said in a statement April 24. "While these investments negatively impact results in the current quarter, we believe we will see the benefit from these investments in the future."

Curlander may still believe that, though it's impossible to know for sure. With its stock having lost a third of its value this year, Lexmark has wisely turned down the spin. Curlander isn't quoted in Monday's press release.

Maybe the board finally realized his comments aren't fit to print.

Dumb-o-Meter score: 85. For now, at least, buyout rumors about the company seem to have faded.

5. From Sirius to Eternity

Sirius (SIRI - Cramer's Take - Stockpickr) and XM (XMSR - Cramer's Take - Stockpickr) keep crooning the same old tune.

The satellite radio broadcasters are trying to persuade skeptical regulators to sign off on their $3.6 billion merger of equals. The companies insist the all-stock transaction will benefit investors and consumers alike, though not everyone agrees.

Critics led by the National Association of Broadcasters have been deriding the merger plan since it was revealed in February. Last month, the NAB said 72 members of the House of Representatives had signed a letter stating their opposition.

"On its face," read June's NAB letter, which was sent to agencies including the Federal Communications Commission and the FTC, "we believe that sanctioning the marriage of the only competitors in the satellite radio market would create a monopoly which would be devastating to consumers."

Sirius and XM say that's nonsense, but Wall Street is clearly worried the deal will be rejected. Shares of the two companies have fallen more than 15% since the merger was announced.

So XM and Sirius have launched a publicity barrage of their own. Sirius chief Mel Karmazin said Tuesday that Sirius and XM have logged "3,500 favorable comments from individuals and 20 prestigious organizations and businesses."

Prestigious is certainly one way of describing these outfits. Backers listed in recent Sirius-XM press releases include Women Involved in Farm Economics, Americans for Tax Reform and the American Trucking Association.

If that doesn't exactly sound like a groundswell of popular support, consider the case of another recently cited Sirius-XM supporter: Frank Sinatra Enterprises.

The song company may not pull much weight in Washington, given that it's a Sirius business partner. Sinatra Enterprises signed on in February to launch a channel dedicated to Ol' Blue Eyes.

Then again, maybe Karmazin is simply looking for inspiration. It's pretty clear what Sinatra would have said if his big merger got shot down in Washington.

I did it my way.

Dumb-o-Meter score: 80. Regrets? Karmazin may soon have a few.