ABS market trading remained woefully slow last week, according to traders, who said they expected this pace to continue at least until Labor Day.

While post-July 4 primary and secondary market activity is usually slow, this particular slowdown had "100% to do with the currently depressed market environment," one ABS trader said. Part of the lull last week stemmed from market jitters about Fannie Mae and Freddie Mac. A Lehman Brothers report on Monday suggesting the GSEs might need to raise additional capital because of an accounting rule sent shares tumbling throughout the week.

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