(Editor's note: Monday and Tuesday of this week, HW will be providing periodic live updates on the sights, sounds, and sentiments at the ASF 2008 conference in Las Vegas.) It's starting to feel a tad bit unfair, to be honest, but many on the buy-side -- whether in the audience, or on a panel -- have been using conference sessions at ASF 2008 as an opportunity to pounce on the rating agencies. An afternoon session covering underwriting trends on Monday served as the warm-up, with BlackRock managing director Kishore Yalamanchili suggesting as part of a panel that the rating agencies, such as Standard & Poor's, Moody's Investors Service, and Fitch Ratings, ought to be regulated. "The ratings process is completely broken," Yalamanchili said. "They got it wrong on the way up, and they got it wrong on the way down." Yalamanchili also said he wanted to see more transparency of the models used to rate individual deals, as well as a new compensation structure that involves contributions from investors as well as issuers. 'You should be ashamed of yourselves' The real sparks flew, however, in a later afternoon session covering RMBS ratings methods and criteria, which featured senior execs from Moody's, Fitch, S&P and DBRS. After opening the session up for questions, an unnamed audience member stood up and chided agency representatives for "failing completely." "You should be ashamed of yourselves," he said. Fitch Ratings managing director Glenn Costello acknowledged that some of the criticism was "justified," but said much of the criticism the agencies receive comes "without an understanding of what we do." "We model for home price declines," Costello said. "Things are declining much more quickly than our models would have suggested." Quincy Tang, senior vice president at DBRS, reminded investors in the audience that bond defaults do happen -- even if many RMBS investors have become accustomed to seeing subordinate performance dictate otherwise in recent years. "I agree we underestimated default probabilities," she said, "but we're into a AA or A environment ... BBB or BB holders should be compensated for that risk. It's not a bullet-proof bond." Speaking with a few attendees after the session -- non-investors, I might add -- most seemed to think that the vitriol directed at the agencies was a bit misplaced. "It's not like the investors are blameless here," said one attendee, who asked not to be named. "If they chose not to perform their own research and due diligence and weighed entirely on the rating agency assessments, they're getting exactly what they paid for."