Le Metropole Cafe is a subscription site owned by GATA's Bill Murphy , aka: Midas.
Posted on Le Met yesterday (Snip)....
Hi Bill -
I understand that some of my Road to Roota followers were disappointed in my call that you deamed as "Way Out There" last week.
I admit that I have missed on timing (repeatedly) before but I don't think I did this time.
Last week this was my call:
"I continue to believe that next week will be the week that shakes the financial world at its foundation."
I believed it happened on Sunday evening.
Although it may not seem like it on the surface.. yet... I believe that the "temporary structural I-beam" that has supported our financial system for the past 8 months CRACKED on Sunday night with the bankruptcy of Capmark Financial. Capmark was THE ring leader in the Commercial Real Estate derivatives markets. Two days later GMAC declared they needed many more billions from the government. CIT will likely go down this weekend.
But the key to all this is that the Commercial Real Estate Derivative market is now IMPLODING. Everyone talks about the imploding Credit Default Swaps at AIG...which were bad but they are dwarfed by the derivatives related to Commercial Real Estate.....
....My call that this week will mark the END of the cabal will be proved out over the next few weeks/months.
The world changed this week…and most people have no idea.
Full Text is available in the public domain here.
If I had to cite one fundamental reason for the return of fear to the markets this past week...the Capmark bankruptcy announced on Sunday Oct 25 has the potential to set-off an implosion in commercial real estate derivatives , similar to the chain-reaction in credit default swaps that rippled through the financial sector following the government take-over of GSE's , Fannie Mae and Freddie Mac on Sept 7, 2008.
Chalk one-up for the Web Bot ?