Here is a fascinating recount of some of the events at the Professional Risk Managers International Association meeting on 20 September. Unfortunately, I can't remember how I came across this. :(
From reading this, the first thing that comes to mind, for me, is "why doesn't Egan-Jones just start rating paper independently and let the market develop for their ratings on the basis of that competition?" Of course, I can see S&P and Moody's getting very litigious, based on the comments that came out of this. I could even see the SEC stepping in and trying to invalidate their work. And of course the issuers aren't going to come to Egan-Jones because they know they can go ratings shopping among Moody's, S&P and Fitch anyway. This whole situation stinks to high heaven.
The bits from Josh Rosner are well worth reading as well. Of course, these are meeting notes so they summarize what was said, but the thoughts are complete enough to see that things are seriously broken in the housing finance and securities ratings arenas.