Bill Gross, the manager of the world’s biggest bond fund and co-chief investment officer at Pimco, gives the credit rating agencies Moody’s and Standard & Poor’s another good hiding in his monthly commentary out Wednesday.

He says investors should ignore their ratings, because the agencies have shown little intelligence or common sense in recent years.

The comments come as the agencies are coming under fire for their role in the subprime crisis as well as a bubbling crisis in Europe, where downgrades of several financially stressed Southern European nations have sent markets tumbling.

Gross writes that the rating agencies have managed to escape scrutiny despite their leading role in enabling Wall Street to peddle junk to investors around the globe. The firms, despite a glaring conflict of interest, slapped their supposedly gold-plated triple-A rating on all sorts of housing-related dross ginned up by investment banks – all in the name of expanding their lucrative fee streams.

Gross, calling this arrangement “sordid” and “nonsensical,” notes that his colleague Paul McCulley likens the rating agencies to the guy who hands out fake ID’s at a drinking party.

And as drunk as the ratings agencies acted in the housing bubble, this was hardly the first time, he adds.

“Their warnings were more than tardy when it came to the Enrons and the Worldcoms of ten years past,” Gross writes, “and most recently their blind faith in sovereign solvency has led to egregious excess in Greece and their southern neighbors.”

As they did in the subprime bust, the rating agencies have belatedly started to come to their senses. They have recently downgraded hard-hit nations such as Spain, Portugal and Greece.

But it’s no small feat to catch up to market sentiment after pretending festering problems aren’t there. The downgrades played a role in some vicious selloffs that swept markets over the past weeks and prompted a spokesman for one European official to bluster, “Who is Standard & Poor’s by the way?”

The European Central Bank even went so far as to downgrade the rating agencies, so as to prevent a collapse of the Greek banking system.

But even a rising tide of sentiment against the rating agencies won’t put them out of business, Gross warns. He says a wrongheaded regulatory framework means that banks, insurers and pension funds need to pay attention to their comments.

What’s more, many observers say regulators themselves need the rating agencies, for all their many flaws – and it’s hard to come up with a workable alternative.

“Like vampires in the dead of the night they will outlast us all,” Gross writes. “Those looking to profit at their expense, however, will dismiss them.”