The Snowballing Effect of Commercial Real Estate

In 2008 nobody knew who had counterparty risk in the mortgage space and subprime mortgage space. It was incredible, but we all thought that would never happen again. Now it's commercial real estate at the heart of it - derivatives products based off commercial real estate loans. If there's a liquid market dries up then all of the financial characteristics go haywire,. you can't price them, then they become non negotiable as collateral.