Morgan Stanley alchemists to convert junk CDOs to AAA bonds?

The 2008 collapse of the financial industry finds it source in the securitization of mortgages and all sorts of other debt (like car loans or unsecured credit card loans) where our 21st century alchemists convinced the market that they were turning junk (crap?) subprime and NINJA mortgages into AAA-rated fixed income securities and selling these so called CDOs by tranches.

A disaster that followed it, but the lessons were not learnt it seems. Here we are again, but this time, Morgan Stanley plans to turn downgraded CDOs back into bonds, and get them the AAA rating that they deserve:

July 8 (Bloomberg) -- Morgan Stanley plans to repackage a downgraded collateralized debt obligation backed by leveraged loans into new securities with AAA ratings in the first transaction of its kind, said two people familiar with the sale.

Alchemist: The best-known goals of the alchemists were the transmutation of common metals into gold (called chrysopoeia) or silver (less well known is plant alchemy, or "spagyric"); the creation of a "panacea", or the elixir of life, a remedy that supposedly would cure all diseases and prolong life indefinitely; and the discovery of a universal solvent.

NINJA: N.I.N.J.A. mortgage stands for "No-Income-No-Job-or-Assets".