Production volume in the securitization market was low last week, as market participants came off of the third quarter's end and a holiday weekend. Still, distressed-debt funds and choosy investors kicked up enough dust to let the market know they would be choosy about the kinds of debt they buy, at least for the time being.

"The market is on much firmer footing as real money investors again put cash to work in various sectors," analysts at Deutsche Bank Securities wrote in a recent report. "Investors looking for relative value opportunities are targeting cards, autos, student loans (private and FFELP), AAA'/AA' HEQs, and seasoned bonds. All these sectors offer significant pickups from historical averages after widening dramatically during the August/ September credit crunch."

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