What if Commercial-real-estate-linked CLO and CMBS stress widens spreads?
Deteriorating office and multifamily collateral pushes losses into commercial-mortgage securities and CRE-CLOs, widening structured-credit spreads; the securitized-CRE stress signals broader property-credit deterioration and dents risk.
The butterfly cascade
How this trigger trickles across markets, left → right — the root shock, its first‑order moves, then the ripple effects. Drag any node; tap a market for its real price history.
Resolution timeline — how this probability is moving
Our model's odds (electric blue) over time vs the market's (Polymarket, amber), from the past toward the 6–18 months horizon. Each dot is a real macro event that nudged the probability — green pushed it up, red pushed it down. Tap a dot for the source. Loading the probability audit trail…
What it would mean
If this plays out, it is a risk-off shock. Deteriorating office and multifamily collateral pushes losses into commercial-mortgage securities and CRE-CLOs, widening structured-credit spreads; the securitized-CRE stress signals broader property-credit deterioration and dents risk. The trigger decomposes into signed root‑shocks — Credit spreads ▲ · Recession signal ▲ · Risk appetite ▼ — which propagate through our causal graph to the markets below.