What if China's hidden-debt swap program fails to keep pace with rolling maturities?
The central debt-swap program to refinance LGFV liabilities into local-government bonds proves insufficient versus rolling maturities, forcing either monetization or disorderly regional defaults.
how we built this number — every step
The class rate is measured from our dated, sourced event library (decade-normalized Poisson — the full table is public at base_rates.json). The variant’s share within its class is the analyst’s editorial call, published so you can audit it. A wider range means thinner precedent. Full recipe: methodology · scored at Reality Check.
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 (gold) over time vs the crowd's (Polymarket, blue), from the past toward the 1–3 years 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. The gold path is an illustrative reconstruction anchored to today's estimate — real dated events, not a live re-estimate history.
What it would mean
If this plays out, it is a risk-off shock. The central debt-swap program to refinance LGFV liabilities into local-government bonds proves insufficient versus rolling maturities, forcing either monetization or disorderly regional defaults. The trigger decomposes into signed root‑shocks — China growth ▼ · China stimulus ▼ · Credit spreads ▲ · Financial conditions ▲ — which propagate through our causal graph to the markets below.
If it happens — the markets it would move
Biggest moves first. Projected moves are cascade-model priors; hist A–B% = what comparable past events actually did (measured abnormal returns), and model prior · unmeasured marks markets with no analogue backing yet. Tap any market for its price history.
| Market | Class | Projected move | |
|---|---|---|---|
| 1 | Freeport (copper) FCX 📈 chart | Equity | ▼ -0.9% hist -2.84–+0.6% · other way -0.01% (n=12) |
| 2 | Copper XCUon Hyperliquid 📈 chart | Commodity | ▼ -0.7% hist -2.0–+0.34% · other way +1.57% (n=12) |
| 3 | China internet KWEBon Hyperliquid 📈 chart | Equity | ▼ -0.7% hist -0.5–+0.16% · other way -0.26% (n=11) |
| 4 | Alibaba BABAon Hyperliquid 📈 chart | Equity | ▼ -0.6% hist -1.54–+2.24% · other way -3.17% (n=11) |
| 5 | MicroStrategy MSTRon Hyperliquid 📈 chart | Equity | ▼ -0.6% hist -1.0–+1.16% · other way +25.2% (n=12) |
| 6 | High-yield credit HYG 📈 chart | Rate | ▼ -0.5% hist -0.74–-0.01% · other way -0.24% (n=12) |
| 7 | Aussie dollar AUD 📈 chart | FX | ▼ -0.4% hist -0.7–+0.04% · other way -1.69% (n=12) |
| 8 | Volatility (VIX) VIXon Hyperliquid 📈 chart | Vol | ▲ +0.3% hist -0.2–+0.88% · other way -3.79% (n=12) |
| 9 | Financials XLF 📈 chart | Equity | ▼ -0.4% hist -0.78–+0.09% · other way -0.19% (n=12) |
| 10 | Bitcoin BTCon Hyperliquid 📈 chart | Crypto | ▼ -0.3% hist -5.23–+1.82% · other way +5.1% (n=11) |
| 11 | Solana SOLon Hyperliquid 📈 chart | Crypto | ▼ -0.4% hist -19.22–+4.85% · other way -2.51% (n=11) |
| 12 | Chinese yuan CNY 📈 chart | FX | ▼ -0.3% hist -0.38–-0.02% · other way -0.59% (n=12) |
| 13 | JPMorgan JPM 📈 chart | Equity | ▼ -0.3% hist -0.84–+0.15% · other way +1.7% (n=12) |
| 14 | Ether ETHon Hyperliquid 📈 chart | Crypto | ▼ -0.3% hist -7.92–+2.9% · other way +3.69% (n=11) |
Probable recommendation
Historical precedent — what analogous events actually did
Across 40 analogous events (overlap‑weighted), as abnormal returns — market beta stripped, so it's the event's own effect, not the market backdrop. Shown at 20 days (persistent) and 5 days (immediate); ↺ fades = the two horizons disagree. Confidence = consistency × sample × significance.
| Asset | History says | Abnormal (20d · 5d) | Hit | n | Confidence | vs cascade |
|---|---|---|---|---|---|---|
| SOL SOL | SHORT | -16.8% · 5d -17.3% | 81% | 15 | 0.45 | ✓ matches cascade |
| ETH ETH | SHORT | -7.3% · 5d -7.9% | 66% | 17 | 0.27 | ✓ matches cascade |
| High-yield credit HYG | SHORT | -0.5% · 5d -0.0% | 66% | 35 | 0.25 | ✓ matches cascade |
| US dollar DXY | LONG | +0.5% · 5d -0.2% ↺ fades | 62% | 40 | 0.21 | · |
| XLF XLF | SHORT | -0.6% · 5d -1.3% | 61% | 37 | 0.20 | ✓ matches cascade |
| SPX SPX | LONG | +0.5% · 5d +0.3% | 60% | 40 | 0.18 | ⚠ differs |
| XCU XCU | SHORT | -1.5% · 5d -1.6% | 60% | 37 | 0.17 | ✓ matches cascade |
| JPM JPM | SHORT | -0.6% · 5d -1.7% | 60% | 40 | 0.17 | ✓ matches cascade |
| FCX FCX | SHORT | -2.2% · 5d -2.1% | 58% | 39 | 0.15 | ✓ matches cascade |
| Bitcoin BTC | SHORT | -4.7% · 5d -4.0% | 58% | 21 | 0.13 | ✓ matches cascade |
| KWEB KWEB | LONG | +0.4% · 5d -1.5% ↺ fades | 55% | 23 | 0.10 | ⚠ differs |
| AUD AUD | SHORT | -0.4% · 5d -0.0% | 55% | 36 | 0.09 | ✓ matches cascade |
| COIN COIN | LONG | +3.3% · 5d +0.6% | 55% | 14 | 0.09 | ⚠ differs |
| NDX NDX | SHORT | -0.6% · 5d -1.5% | 54% | 40 | 0.06 | ✓ matches cascade |