The bond rating agencies - S&P, Moody’s, Fitch - have a reputation for closing stable doors only after the horses are long gone. Bloomberg says they are doing it again with mortgage debt.

“Almost 65 percent of the bonds in indexes that track subprime mortgage debt don’t meet the ratings criteria in place when they were sold, according to data compiled by Bloomberg.

That may just be the beginning. Downgrades by S&P, Moody’s and Fitch would force hundreds of investors to sell holdings, roiling the $800 billion market for securities backed by subprime mortgages and $1 trillion of collateralized debt obligations, the fastest growing part of the financial markets.

`You’ll see massive losses from banks, insurance companies and pension managers,’ said Joshua Rosner, a managing director at investment research firm Graham Fisher & Co. in New York and co-author of a study last month that said S&P, Moody’s and Fitch understate the risks of subprime mortgage bonds. `The longer they wait, the worse it’s going to be.’ “