As the CDO market ushers in 2008, many industry players are hoping that the gloomy conditions that plagued 2007 will remain in the past. But with recession fears looming over the structured credit markets, and rating agencies tweaking their methodologies, new issuance will continue to move slowly, at least for the first half of the year, market participants said.

"Everything is on hold right now," said a CDO market participant, adding that the mass firings of late 2007 have left bankers focused on trying to find new jobs instead of pushing new deals. "The only guys who are currently buying are the [investors] in the secondary market, who are getting this stuff at a huge discount. It is impossible to pitch an ABS CDO right now. The guys who would be doing this are the same guys who have to apologize for the five or six deals they did last year that went to the toilet."

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