Standard & Poor's has deemed the subprime mortgage bond market in 2006 possibly "the worst performing in recent history." Investors have certainly responded to the well-publicized travails. It seems that what was once a cash cow for top broker dealers may be stalling a bit. Nearly $80 billion of bonds backed by subprime loans have been issued this year. That's down 37 percent from the comparable period last year. Collateralized debt obligations have also taken a hit. These issues are basically funds of asset-backed bonds; they may find themselves under more pressure from ratings agencies. In the first two months of 2007, about $31 billion in CDOs backed by subprime bonds were sold--about double from the same period last year. But most expect that to slow. Rating agencies may even take a hit. Other types of CDOs may also feel some effect.

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- here's an AP article