What if a second global yen-carry unwind hits?
A synchronized carry unwind dumping MXN, INR and US tech together is a pure deleveraging cascade: short the highest-beta funded longs (SOL, ETH, Nasdaq) and the carry EMs against a surging yen. This is the Aug-2024 unwind generalized across the carry book, where peso and tech sold in lockstep as JPY shorts covered. Transmission is mechanical via prime-broker margin, not fundamentals. Forward angle: a faster, more crowded crypto-as-carry-vehicle channel than 2024 means crypto leads the drawdown this time.
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 Imminent 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 sudden yen surge forces leveraged funds to dump Mexican peso, Indian rupee and US tech in a synchronized deleveraging. The trigger decomposes into signed root‑shocks — FX carry appetite ▼ · Financial conditions ▲ · Risk appetite ▼ — which propagate through our causal graph to the markets below.