Bloomberg wrings its hands over this, and calls the proposed regulation that would give asset backed debt a different ratings scale a “scarlet letter” for these instruments.

This letter is well deserved. What is clear is that these byzantine products cannot be rated reliably, and as such people need to be warned off of them.

They are also calling for more transparency in the ratings process, with the ratings companies making public the data that they used.

It’s a good start, but only that, a start.