What if a big US public pension is forced into a liquidity fire sale?
A public pension forced to sell liquid assets at a loss to meet benefit payments and capital calls is a denominator-effect forced-seller event that pressures public equities and credit while private marks lag. Rhymes with the 2022 'denominator effect,' when CalPERS-type funds were overweight illiquids and had to trim public books. Skeptic's note: this is slow-burn liquidity drag, not an acute crisis — the cascade's sharp risk-off overstates it; it's a persistent supply of public-market selling, not a crash.
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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 US public pension is forced to dump liquid assets at a loss to fund benefit payments and capital calls amid an illiquidity squeeze. The trigger decomposes into signed root‑shocks — Credit spreads ▲ · Financial conditions ▲ · Risk appetite ▼ — which propagate through our causal graph to the markets below.