From Bloomberg (thanks to TPM Reader PJ for the catch):

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. ...

Two years after the credit markets began to seize up, costing the world's biggest financial institutions $1.47 trillion in writedowns and losses, banks are again taking so- called structured finance securities and turning them into new debt investments with top credit ratings. While the Morgan Stanley deal is the first to involve CDOs of loans, banks have been doing the same with commercial mortgage-backed securities in recent weeks.

I'd love for someone to explain why this isn't the same old game of financial alchemy -- turning toxic crap into AAA gold with the wave of a wand -- that helped precipitate the financial crisis. Anyone?