What if a glut of senior housing impairs healthcare REITs?
The clean chain is healthcare-REIT cap-rate widening feeding HY credit: occupancy misses + wage inflation impair NOI, lifting HYG spreads and pressuring REIT-heavy financials. Rhymes with 2007-08 senior-housing/REIT distress (HCP/HCN drawdowns of 30-50% as occupancy and labor bit). Idiosyncratic and slow-burn, not systemic; the modest 0.3/0.4 roots are right-sized — trade it as a single-sector credit short (short health-REIT names / long CDX-HY), not a market-wide risk-off.
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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 1–3 years 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. Overbuilt assisted-living and memory-care facilities face occupancy shortfalls and labor-cost squeeze, impairing healthcare REITs. The trigger decomposes into signed root‑shocks — Credit spreads ▲ · Recession signal ▲ — which propagate through our causal graph to the markets below.