ABX Index

Ooh, sub-prime time. The ABX is in index that reflects market sentiment regarding sub-prime mortgages. Sub-prime means: highly risky, low or bad credit ratings. The higher the index number, the more confidence the market is showing in the most fragile part of the credit economy.

And hopefully that makes sense as, generally speaking, prime borrowers almost never go bankrupt. All the action happens way lower on the stack, until you kiss Triple C land of ratings, and at that point, small gusts of wind can blow over the highly unstable sailboats.