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.
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 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. 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. 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.
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 | Brent crude BRENTon Hyperliquid 📈 chart | Commodity | ▼ -1.8% hist -9.29–-0.57% · other way +1.98% (n=6) |
| 2 | WTI crude CLon Hyperliquid 📈 chart | Commodity | ▼ -1.5% hist -7.33–+0.45% · other way -2.04% (n=7) |
| 3 | Energy sector XLEon Hyperliquid 📈 chart | Equity | ▼ -1.1% hist -2.45–+0.43% · other way +0.33% (n=7) |
| 4 | United Airlines UAL 📈 chart | Equity | ▲ +0.9% hist -1.79–+4.75% · other way +28.59% (n=6) |
| 5 | ExxonMobil XOM 📈 chart | Equity | ▼ -0.8% hist -0.72–-0.15% · other way +1.11% (n=12) |
| 6 | Chevron CVX 📈 chart | Equity | ▼ -0.7% hist -1.43–+0.26% · other way -1.2% (n=12) |
| 7 | Delta DAL 📈 chart | Equity | ▲ +0.8% hist -0.87–+3.78% · other way +19.68% (n=6) |
| 8 | High-yield credit HYG 📈 chart | Rate | ▼ -0.6% hist -0.76–-0.01% · other way +0.47% (n=6) |
| 9 | Financials XLF 📈 chart | Equity | ▼ -0.4% hist -0.84–+0.12% · other way +2.72% (n=7) |
| 10 | JPMorgan JPM 📈 chart | Equity | ▼ -0.3% hist -0.58–+0.04% · other way +8.93% (n=9) |
| 11 | MicroStrategy MSTRon Hyperliquid 📈 chart | Equity | ▼ -0.3% hist -0.63–+0.87% · other way -7.41% (n=7) |
| 12 | Volatility (VIX) VIXon Hyperliquid 📈 chart | Vol | ▲ +0.2% hist -0.9–+2.09% · other way +5.96% (n=9) |
| 13 | S&P 500 SPXon Hyperliquid 📈 chart | Index | ▼ -0.2% hist -0.75–+0.24% · other way -0.98% (n=12) |
| 14 | 30y Treasury yield DGS30 📈 chart | Rate | ▼ -2bp hist -16.77–+3.89% · other way +19.8% (n=10) |
Probable recommendation
Why we may diverge from history
Trust the cascade long DAL; history's -6% comes from 2020 oil-war and demand-shock windows, whereas a Pemex bailout that weakens oil-linked Mexico lowers jet-fuel costs for US carriers.
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 |
|---|---|---|---|---|---|---|
| BRENT BRENT | SHORT | -6.4% · 5d -2.9% | 87% | 33 | 0.65 | ✓ matches cascade |
| CL CL | SHORT | -5.5% · 5d -3.1% | 77% | 36 | 0.42 | ✓ matches cascade |
| Bitcoin BTC | SHORT | -4.3% · 5d -5.4% | 72% | 20 | 0.37 | · |
| 30y yield DGS30 | SHORT | -14bp · 5d -2bp | 64% | 40 | 0.26 | ✓ matches cascade |
| High-yield credit HYG | SHORT | -0.5% · 5d -0.1% | 63% | 34 | 0.23 | ✓ matches cascade |
| DAL DAL | LONG | +3.1% · 5d -0.6% ↺ fades | 61% | 34 | 0.22 | ✓ matches cascade |
| JPM JPM | SHORT | -0.4% · 5d -1.4% | 62% | 40 | 0.21 | ✓ matches cascade |
| 10y yield DGS10 | SHORT | -16bp · 5d -4bp | 61% | 40 | 0.21 | ✓ matches cascade |
| Gold XAU | LONG | +0.8% · 5d -0.2% ↺ fades | 59% | 36 | 0.16 | ✓ matches cascade |
| US dollar DXY | LONG | +0.6% · 5d +0.3% | 58% | 40 | 0.15 | · |
| XLF XLF | SHORT | -0.6% · 5d -1.1% | 57% | 36 | 0.14 | ✓ matches cascade |
| XLE XLE | SHORT | -1.8% · 5d -1.8% | 56% | 36 | 0.10 | ✓ matches cascade |
| UAL UAL | LONG | +4.2% · 5d -1.4% ↺ fades | 49% | 35 | 0.00 | ✓ matches cascade |
| XOM XOM | SHORT | -0.2% · 5d -0.9% | 46% | 40 | 0.00 | ✓ matches cascade |
Why this probability
Pemex support recurring and rating pressure persistent; over 18mo a bailout-linked downgrade is likelier. A base‑rate‑anchored prior, continuously scored against what actually happens — not a forecast.