Much of the trouble proliferating through the major indices last week could, in part, be traced back to the ABS industry. This is where fast money and high-risk structures fed a long period of growth in the housing market, which many market participants now concede was unsustainable.
Industry participants weathered another period of frightening equity, credit and debt market performances. Thus, the market was stripped of the overconfidence that fueled the fast-moving market of its momentum until late last year. Another issuance period passed with zero productivity, and whatever deals were announced received very wide pricing guidance.