What if India diverts the Indus and chokes Pakistan's water?
A physical Chenab diversion is a slow-burn casus belli, not a same-day equity shock; the cleaner trade is long downside rupee/PKR and a regional risk premium, not selling Nvidia. Rhymes with the post-Pulwama/Balakot 2019 standoff, where the Nifty wobbled <2% and recovered within weeks while INR softened. Transmission runs Pakistan-side: an agrarian economy losing irrigation water faces a food-import and FX-reserve crunch, pressuring the IMF program — the equity-vol cascade here is overstated.
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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 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. Loading the probability audit trail…
What it would mean
If this plays out, it is a risk-off shock. With the treaty in abeyance, India breaks ground on Chenab canal diversion and storage, physically curtailing cross-border flows to Pakistan. The trigger decomposes into signed root‑shocks — Geopolitical risk ▲ · Climate/crop supply ▲ — which propagate through our causal graph to the markets below.