Securitized Debt Issuance 2006, 2007, 2008

Let's project the current pace of global securitized debt issuance from the first half performance of 2008 until the end of year. According to the July 4, 2008 edition of Asset Backed Securities; $510.3 Billion worth of asset backed securities including Mortgage, Credit Cards, Student Loans, Auto, and others have been issued so far this year. Assuming issuance remains at the same pace for H2 as H1 issuance would total $1.2 Trillion Dollars.

2006 ABS Issuance: $2,600,000,000,000
2007 ABS Issuance: $2,200,000,000,000
2008 ABS Issuance: $1,200,000,000,000 (Extrapolated $510BX2)

Initial estimates for the beginning of the year were far too optimistic as many analyst expected only a 30% decline from 2006 levels (i.e. $1.8T). Clearly, we are in much worse shape.

As far as U.S. Securitized Debt is concerns the figures are as follows:

H1 2008: $113,700,000,000

2006 ABS Issuance: $906,500,000,000
2007 ABS Issuance: $594,200,000,000
2008 ABS Issuance: $227,500,000,000 (Extrapolated $113.7BX2)

Here are some more interesting figures:

2006 U.S. GDP $13,194,000,000,000
2007 U.S. GDP $13,841,000,000,000
2008 U.S. GDP $13,979,000,000,000 (at 1% Growth)

Asset Backed Securities as a Percentage of U.S. Gross Domestic Product

2006: 6.87%
2007: 4.29%
2008: 1.62%

Considering that $679 Billion and $1.4 Trillion of credit has been removed from the US and global market respectively between 2006 and 2008 I expect a dramatic reduction in consumer spending.