What if Pakistan's IMF programme collapses?
Islamabad breaking its IMF deal with reserves under $4bn forces a disorderly rupee devaluation and default scramble — but Pakistan is a frontier sovereign with negligible global financial linkage, so the broad Nasdaq/VIX cascade overstates spillover. The trade is local: short PKR and Pakistan dollar bonds; global risk barely notices. Rhymes with Pakistan's own 2018-19 and 2022-23 near-default episodes, resolved by IMF and Gulf/Chinese deposits. Forward: rollover dependence on Saudi/UAE/China deposits, not markets, is the true solvency variable.
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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 0–6 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. Islamabad breaks its IMF deal amid reserves under $4bn, forcing a disorderly rupee devaluation and external-default scramble. The trigger decomposes into signed root‑shocks — Credit spreads ▲ · Geopolitical risk ▲ · Risk appetite ▼ — which propagate through our causal graph to the markets below.