What if a Pemex bailout drags down Mexico's sovereign rating?
A $100bn Pemex bailout dragging the sovereign rating lifts Mexican CDS and MXN vol — a credit event whose oil leg is small and idiosyncratic, not a global Brent shock. Rhymes with Pemex's chronic 2019-20 downgrade saga that repeatedly threatened Mexico's IG line. The US is the key refiner/offtaker and Pemex's funding market; the forward risk is that absorbing Pemex onto the sovereign balance sheet finally collapses the entity-sovereign ratings distinction.
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. A mega-bailout of Pemex's $100bn debt drags the sovereign rating down, lifting Mexican CDS and peso volatility. The trigger decomposes into signed root‑shocks — Credit spreads ▲ · Oil supply risk ▼ — which propagate through our causal graph to the markets below.