Finally, Some Comprehension

Hooray! The market is beginning to understand what the NRSROs have been doing.

The rating doesn’t speak to the magnitude of loss. The National Association of Insurance Commissioners (NAIC) are being proactive and not allowing downgraded bonds to suck all of the capital out of the insurance industry by year end.

We hope that the ratings agencies’ explanation, and clarification as to what the ratings do measure will become common knowledge.

There are bad bonds. But not all downgraded bonds are “toxic.”

[$$] S&P Gauges Bond Loss Potential on Morgages – Wall Street Journal, November 9, 2009