The word "recovery" has become meaningless amid a new wave of Covid-19 cases. New lockdown measures are causing a bigger hole into the economy, and we are helplessly seeing a recession getting worse by the day. At this point, the market is starting to realize that bulls are irrational, while bears might be well-positioned for what's to come. Although a blow to the economy caused by new restrictions is clear, what is not obvious is what will be the event that will cause the market to plummet. In 2007, the subprime mortgage crisis in the United States was the catalyst for a widespread global financial crisis. This year, a crisis will most likely develop from Commercial Mortgage-Backed Securities.
According to Trepp, CMBS delinquency and special servicing rates are catching up to the high levels we have seen during the Global Financial Crisis.