What if one mega-hurricane wipes out a swath of catastrophe bonds?
A mega-hurricane wiping out cat-bond principal vaporizes ILS-fund capital and reinsurance capacity, hardening property rates — a sector-contained insurance shock, not a grain-supply event. Rhymes with Hurricane Ian (2022), which triggered cat-bond losses and a hard 2023 reinsurance renewal. The roots wrongly pull in climate_supply, dragging wheat/corn crop-stress into a wind/insurance event — a hurricane does not lift grains; the correct map is a credit/risk shock plus geopolitical/no-ag.
Every number ships with its receipt — the odds, the range, the precedents, and a public grade at Reality Check. The statistical machinery that produces it is proprietary.
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 0–6 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. A single mega-hurricane triggers principal losses across a swath of catastrophe bonds, vaporizing ILS-fund capital and reinsurance capacity. The trigger decomposes into signed root‑shocks — Credit spreads ▲ · Risk appetite ▼ · Financial conditions ▲ — which propagate through our causal graph to the markets below.