What if a record hurricane season wipes out catastrophe bonds?
A cat-bond wipeout reprices insurance-linked securities and reinsurance capacity — the trade is wider ILS spreads, higher reinsurer rates (renewal hardening), and pressure on Florida-exposed carriers, NOT grain. The current roots map a hurricane to climate_supply, dragging in wheat/corn crop-stress that does not belong; hurricanes destroy property and ILS capital, not Midwest yields. Closest rhyme: Hurricane Ian (2022) and KCM 2017 (Harvey/Irma/Maria) which triggered ILS losses and a hard reinsurance market — Everest/RenRe re-rated, RYDEX/cat names sold.
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 record hurricane season triggers total loss on a wave of cat bonds, repricing the entire insurance-linked-securities market. The trigger decomposes into signed root‑shocks — Credit spreads ▲ · Financial conditions ▲ — which propagate through our causal graph to the markets below.