...The U.S. is entering a severe recession driven by a contraction in credit. The rapidly unfolding financial crisis that has taken hold over the past six months has few historical parallels from which to gaug e the possible depth and length of this downturn. The complexity also makes it difficult to de termine the ultimate impact on the economy. These factors have affected all assets classes within structured finance and will continue to pressure ratings in 2009. In 2008, the U.S. structured fi nance markets witnessed unpara lleled market turmoil and liquidity challenges. Developments in th e mortgage and financial markets led to dislocations to varying degrees across all stru ctured finance markets. Consistent with these disruptions and the spillover into the real economy, negative rating volatility reached unprecedented levels, as shown in the charts on page 2 and in the table of the Appendix on page 17. Although certain individual market sectors remained resistant to these...
