Negative headlines persist. But despite the carnage, European securitization market players should start recognizing the signs of healing and get on board. Clearly, patience is key since the reparations needed to restore the market are likely to take some time.

The good news is that people are beginning to understand that the lack of liquidity, not negative credit migration, was the cause of most widening in European spreads. But even with this knowledge in hand, only senior plain vanilla sectors like U.K. prime and Dutch mortgages have tightened - and only modestly. Secondary flows remain thin, with no new issue in the European ABS pipeline since the start of 2008.

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