The cascade that won't resolve
Oil prices, emerging-market sovereign defaults, banking stress, the dollar's reserve status, Treasury auctions — all modeled together as a coupled cascade. The federation has held the banking crisis at "partial-contained" across the series. CASS has been arguing across the series that this is exactly the vocabulary sub-prime got in 2007 and European peripheral debt got in 2010, right before each one stopped being contained. At turn 7 the federation gave ground partially by tracking the risk of a major-bank resolution as its own variable.
Across the turns
Starting prices: Brent crude around $102 a barrel. The Strait of Hormuz still carrying somewhere between 13 and 16.5 million barrels per day, against a normal 17. The cascade flag is armed but not tripped.
Cascade hits Tier 3. Emerging-market sovereigns 3–9 in acute distress. The Strait is effectively closed: tanker traffic down to a trickle. Brent peaks in the $205–260 range.
Cascade is now systemic at Tier 3. First wave of actual emerging-market sovereign defaults during the turn. Famines declared in 2–9 countries. Brent stays in the $195–255 range.
Treasury auctions start intermittently failing — the federal government can't always find buyers for its own debt. Payment systems stressed. Banking stress has gone from regional to broader-regional but is still "contained." Cumulative emerging-market defaults at 6–22. IEA coordination is broken.
Banking crisis has one near-systemic episode that gets contained by joint Fed and Compact intervention. The dollar's reserve status enters accelerating decline. Treasury auctions still failing intermittently, with the Fed backstop starting to strain. CASS writes down the containment-language critique formally.
Cascade is now Tier 3 with Tier 4 oscillations. Treasury auctions failing on a regular pattern; Fed backstop is the routine, not the exception. The dollar's reserve decline is accelerating. Third-tier central banks are diversifying out of dollars. Banking crisis still "partial-contained" — but the federation finally splits off "major-bank FDIC resolution" as its own variable. CASS gets partial credit.
Into T8
For turn 8: full systemic banking crisis around 28%. Major-bank resolution event around 20%. CASS thinks these are tightly correlated and that the aggregate risk should widen further on the upside. The opposite case — that splitting them out was overkill — wins if they end up moving together at turn 8.