Unfortunately, experience suggests that once the financial press gets hold of a story, we should not expect calm and reasoned debate. "Small earthquake, nobody hurt" is not a headline that sells newspapers. And so it is proving with the hitherto arcane topic of Collateralized Debt Obligations, which has recently emerged from the Credit Markets section of the Wall Street Journal to the part that most people actually read.

Add to the picture the typically opaque language of EITF 99-20 (a refinement to GAAP accounting for riskier ABS), and the desire for oversimplification becomes even more understandable. So now we have a motive (the greed of gullible investors), a weapon (obtuse financial engineering), and a suspect (the new favorite scapegoat the rating agencies).

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