What if credit-card charge-offs surge past 2009 levels?
Card charge-offs spiking past 2009 levels as excess savings empty hits card-issuer banks (Synchrony, Capital One, Discover) and consumer-ABS directly — that issuer/ABS axis is the trade, HY the liquid expression. Rhymes with 2009, when charge-offs peaked near 10% and card-heavy banks led losses; also the 2023 normalization that pressured Synchrony/COF. Skeptical: charge-offs lag unemployment, so this is a slow-burn recession confirm, not a shock — the high-beta crypto cascade overstates the immediacy.
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 6–18 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. Card charge-offs spike past 2009 levels as the savings buffer empties, hammering card-issuer banks and consumer-ABS. The trigger decomposes into signed root‑shocks — Credit spreads ▲ · Recession signal ▲ — which propagate through our causal graph to the markets below.