What if China's tier-three ghost cities see prices halve?
A 50% tier-3 price collapse destroys the local-government land-sale revenue model and household wealth simultaneously, a slow-burn demand sink rather than an acute credit event — hence the muted copper/AUD beta and China-internet drag. Closest analogue is the grinding 2014-15 China property destock that fed the August-2015 'Black Monday' growth scare. Transmission: weaker China import demand hits Australian miners and Korean/German exporters. Forward angle: LGFV refinancing, not developer bonds, is the fault line this cycle, so watch onshore credit spreads over offshore HY.
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 1–3 years 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. Empty third-tier Chinese cities see prices fall 50%, wiping household wealth and crushing local-government land revenue. The trigger decomposes into signed root‑shocks — China growth ▼ · Recession signal ▲ · Risk appetite ▼ — 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 | MicroStrategy MSTRon Hyperliquid 📈 chart | Equity | ▼ -1.5% hist -2.68–+2.71% · other way +23.21% (n=12) |
| 2 | Solana SOLon Hyperliquid 📈 chart | Crypto | ▼ -1.4% hist -17.64–+8.67% · other way -2.36% (n=12) |
| 3 | Hyperliquid (HYPE) HYPEon Hyperliquid | Crypto | ▼ -1.1% model prior · unmeasured |
| 4 | Nasdaq 100 NDXon Hyperliquid 📈 chart | Index | ▼ -1.1% hist -1.66–+0.07% · other way -0.31% (n=12) |
| 5 | Freeport (copper) FCX 📈 chart | Equity | ▼ -1.2% hist -3.98–+1.33% · other way +0.86% (n=12) |
| 6 | Ether ETHon Hyperliquid 📈 chart | Crypto | ▼ -1.0% hist -12.91–+6.08% · other way +3.62% (n=12) |
| 7 | Copper XCUon Hyperliquid 📈 chart | Commodity | ▼ -1.0% hist -1.26–-0.07% · other way +3.0% (n=12) |
| 8 | Volatility (VIX) VIXon Hyperliquid 📈 chart | Vol | ▲ +0.9% hist -3.81–+2.01% · other way +2.35% (n=12) |
| 9 | Bitcoin BTCon Hyperliquid 📈 chart | Crypto | ▼ -0.8% hist -6.01–+3.12% · other way +4.72% (n=12) |
| 10 | China internet KWEBon Hyperliquid 📈 chart | Equity | ▼ -0.9% hist -2.7–+0.91% · other way -0.3% (n=12) |
| 11 | Aussie dollar AUD 📈 chart | FX | ▼ -0.8% hist -1.12–+0.05% · other way -0.93% (n=12) |
| 12 | Alibaba BABAon Hyperliquid 📈 chart | Equity | ▼ -0.8% hist -0.88–-0.16% · other way -2.98% (n=12) |
| 13 | S&P 500 SPXon Hyperliquid 📈 chart | Index | ▼ -0.6% hist -0.66–+0.35% · other way +0.52% (n=12) |
| 14 | Semiconductors SMHon Hyperliquid 📈 chart | Equity | ▼ -0.6% hist -0.43–-0.22% · other way +2.49% (n=12) |
Probable recommendation
Why we may diverge from history
Trust the cascade: VIX's -9.3% reflects analogues (DeepSeek, Didi) that weren't vol events, but a tier-3 China property collapse wiping land revenue is precisely a vol-spike — discount the contaminated mean.
Historical precedent — what analogous events actually did
Across 19 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 |
|---|---|---|---|---|---|---|
| SOL SOL | SHORT | -16.8% · 5d -22.6% | 78% | 9 | 0.41 | ✓ matches cascade |
| ETH ETH | SHORT | -12.2% · 5d -12.0% | 73% | 11 | 0.38 | ✓ matches cascade |
| XPT XPT | SHORT | -1.5% · 5d -0.1% | 73% | 15 | 0.37 | ✓ matches cascade |
| NVDA NVDA | SHORT | -3.8% · 5d -2.1% | 73% | 15 | 0.35 | ✓ matches cascade |
| US dollar DXY | LONG | +0.6% · 5d -0.1% ↺ fades | 68% | 19 | 0.32 | · |
| MU MU | SHORT | -7.0% · 5d -4.8% | 68% | 19 | 0.30 | ✓ matches cascade |
| Volatility VIX | SHORT | -4.0% · 5d +5.0% ↺ fades | 65% | 17 | 0.24 | ⚠ differs |
| High-yield credit HYG | SHORT | -0.3% · 5d +0.1% ↺ fades | 67% | 15 | 0.23 | ✓ matches cascade |
| KR200 KR200 | SHORT | -2.1% · 5d -2.3% | 65% | 17 | 0.22 | ✓ matches cascade |
| TSM TSM | LONG | +1.7% · 5d -1.1% ↺ fades | 62% | 16 | 0.19 | ⚠ differs |
| XLE XLE | SHORT | -0.0% · 5d -2.6% | 60% | 15 | 0.19 | ✓ matches cascade |
| MSTR MSTR | LONG | +3.8% · 5d -6.0% ↺ fades | 60% | 15 | 0.17 | ⚠ differs |
| SMH SMH | LONG | +0.0% · 5d -0.3% ↺ fades | 60% | 15 | 0.17 | ⚠ differs |
| CL CL | SHORT | -2.1% · 5d -2.5% | 60% | 15 | 0.17 | ✓ matches cascade |
Why this probability
Tier-3 prices already grinding lower; a clean 50% drop in 1-3yr still less than even. A base‑rate‑anchored prior, continuously scored against what actually happens — not a forecast.