The ABX derivative index has become one of the most oft-quoted measures of credit risk linked to mortgages made to borrowers with less than stellar credit histories, reports the Associated Press. Stock and U.S. Treasury markets now react to shifts of the credit risk measure stick of the subprime mortgage market. The ABX is the only index that gives investors a quick read of that sector of the economy, a sector that has been suffering as the number of defaults and delinquencies rise among homeowners. “The ABX index has cultivated a substantial following in the relatively short span of time it has been in existence,” said Edward Marrinan, a JPMorgan managing director of credit strategy.
Click here to read the Associated Press story on Yahoo! Finance