The latest numbers in the asset-backed securities (ABS) market are drawing some unfavorable comparisons to derivative market dynamics prior to the Financial Crisis. A new report by Wells Fargo indicates that, while the overall ABS market has cooled so far in 2016, subprime auto loan ABS origination has been on the rise.

The Numbers

So far this year, total ABS issuance is down $4.2 billion compared to this time last year. However, subprime auto ABS has witnessed the largest amount of issuance this year of any ABS sector. There has already been more than $5.5 billion in subprime auto ABS issuance alone in 2016, $1.1 billion more than this time last year.

Troubling Trends

This surge in the subprime auto ABS market is…

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