What if China severs Taiwan's undersea internet cables?
Cutting Taiwan's submarine cables is grey-zone isolation: TSMC and semis dip ~2% and VIX bids modestly, but it degrades comms, not fabs, so the equity hit is contained. Directly rhymes with the 2023 Matsu cable cuts and 2024-25 Baltic cable severings, which spooked headlines but barely moved indices. Transmission is mostly sentiment via the semi complex. Forward angle: repeated, deniable cable attacks are a coercion ratchet markets learn to shrug off, so each successive event has less beta.
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 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. China cuts Taiwan's submarine internet cables, isolating the island in a grey-zone coercion campaign. The trigger decomposes into signed root‑shocks — Geopolitical risk ▲ · Semiconductor supply risk ▲ — which propagate through our causal graph to the markets below.