After the heaviest quarter the U.S. ABS market has ever seen, players loosened their belts last week for a collective breather. With more than $175 billion of new issue supply pricing during the first three months - an average of $13.5 billion a week and an unbelievable $700 billion annualized pace - transaction volume last week totaled just $6.7 billion, not surprisingly weighted heavily towards the mortgage sector.

While spreads have softened somewhat in recent weeks, particularly in subordinate home equity bonds, most sectors remain at near their historic tights. This, combined with the all-time low absolute fixed-income yields, even has some accounts on the sidelines altogether, sources said. Other, more pessimistic, sources compared the current environment to a pre-Russian debt crisis of 1998, calling it a "Greenspan-induced credit bubble," and wondering aloud what "trigger event will lead to a re-valuation of credit markets."

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