At the beginning of the year, a prophetic Salomon Smith Barney released a research piece titled "Mind the Gap - Between Secured and Unsecured," which, had an investor followed Salomon's advice, would have been one of the best plays of the year (See ASR 2/4/02). The idea - buying the triple-B rated classes of monoline-issued credit card ABS, while simultaneously buying credit-default swaps of the triple-B-rated parent, or shorting its debt - would have reaped substantial gains.

At the time, prior to the collapse of Adelphia, WorldCom and Tyco Inc., to name a few, the outlook for the economy was somewhat optimistic. Salomon researcher Mary Kane noted that there was "little spread difference" between the comparably rated ABS and corporate debt and theorized that "these narrow differentials will soon reverse course."

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