What if Germany's top court blocks an ECB bond program?
Karlsruhe blocking an ECB bond scheme mid-crisis removes the backstop precisely when it is needed — periphery spreads gap and you sell BTPs/OATs and EU banks; the crypto-led cascade understates the sovereign mechanism. Rhymes with the 2020 German Constitutional Court PSPP ruling that briefly threatened QE legality before a workaround. Transmission: loss of the OMT/TPI-style shield widens every periphery sovereign; Bunds bid violently. Forward angle: unlike 2020's procedural fix, a hard 'unconstitutional' ruling would leave the ECB without a credible bazooka, the genuine tail here.
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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. Karlsruhe rules a bond scheme breaches the constitution, freezing OMT-style backstops mid-crisis. The trigger decomposes into signed root‑shocks — Credit spreads ▲ · Financial conditions ▲ · Risk appetite ▼ — which propagate through our causal graph to the markets below.