An ABS is basically bond that might be collateralized by a number of things like loans, credit card debt, or a company's receivables. Many experts blamed a boom in ABS for helping inflate the credit bubble as it quickly turned liabilities into cash, while offering investors what appeared to be high yield at relatively low risk.
China's trust companies have started buying ABS at a stunning rate, and with the same vigor with which they once bought infamously dangerous wealth management products (WMP), which are now on the decline.
One recent Chinese Reserve Report (CRR) projects that financial firms could issue $127 billion in ABS this year, up from $44 billion worth last year.