What if a shadow-bank collapse seizes up India's credit?
An IL&FS-style NBFC collapse freezes India's non-bank credit, choking auto and SME lending: short Indian financials and global HY, with the MSTR/crypto legs being noise rather than signal — this is a domestic liquidity event. Directly rhymes with the 2018 IL&FS default, which froze NBFC funding, spiked spreads and forced an RBI liquidity response without global contagion. Transmission stays onshore via the bank-NBFC nexus. Forward: a larger, more interconnected NBFC sector than 2018 raises the systemic-spillover bar.
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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. A large NBFC collapse echoing IL&FS freezes India's non-bank credit, choking auto and SME lending and denting GDP. The trigger decomposes into signed root‑shocks — Credit spreads ▲ · Financial conditions ▲ · Growth surprise ▼ — which propagate through our causal graph to the markets below.