What if a downgrade sparks a run on a top-five life insurer?
A downgrade-driven annuity run forces fire-sales of illiquid private credit, so the real transmission is into private-credit marks and BDC NAVs, with HY the liquid hedge. This rhymes with Executive Life (1991) and AIG (2008) — asset-liability mismatch, not a deposit run — where forced selling cratered the names' paper. Forward angle: today's stressed asset is opaque PE-originated private credit, harder to mark than 2008 RMBS, so contagion shows up as redemption gates before it shows in HY spreads.
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 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. Policyholders surrender annuities en masse at a top-five life insurer after a downgrade, forcing fire-sales of illiquid private credit. The trigger decomposes into signed root‑shocks — Credit spreads ▲ · Financial conditions ▲ — which propagate through our causal graph to the markets below.