In our opinion, the past few months have seen the full flowering of the international credit and liquidity contraction. For decades, and particularly since the beginning of the millennium, low interest rates have fueled enormous gains in real estate, globally, with equity market indices also benefitting. Much of these gains were built on the risk prone and unstable base of massive leverage, as evidenced by the growth of the credit default swap market to a total value of US$45 trillion. This is more than five times the total of the US government bond market.