A Lull After the Storm, But the Snowball Keeps Rolling
Today, it was reported that **"Alliance Western Bank (fictional),"** a mid-sized U.S. regional bank, is in serious financial crisis due to expanding losses related to commercial real estate (CRE) loans and subprime auto loans. As a result, the bank's stock price plummeted by more than 70% and trading was halted.
This is the very situation we have been warning about in our "Domino Scenario." It is definitive proof that the credit event of a single company's collapse (Tricolor) has finally spread to the U.S. financial system itself, particularly the vulnerable regional banking sector.
In response to this news, the credit market has completely frozen. The high-yield bond spread (HY OAS) showed an abnormal widening of +85bp from the previous day, the largest increase since the Lehman shock. The market is no longer pricing in individual corporate risk, but the risk of the entire system.
After yesterday's violent fluctuations, today's market has begun to move toward collapse with a clear direction.
The situation has reached "Gate-A (Caution)" in the "Snowball Monitoring System."
The MOVE index has exceeded 130, and the HY OAS is widening at a pace far exceeding +150bp per week. While this signifies a transition to the "Caution" stage according to the protocol, the reality is far more serious. A concrete event, a regional bank failure, occurred sooner than the sequence we had anticipated (T-13 to T-10).
The snowball is now growing at a speed that is obvious to everyone. The next focus will be on the U.S. Treasury's short-term bond auctions to be held over the weekend and the spread of concerns about chain-reaction failures to other regional banks.
The War-Room hereby **officially designates the monitoring level as "Gate-A"** and upgrades the status of THP-7 from WATCH(🟡) to **ALERT(🔶)**. All personnel are to begin preparations for the next stage in accordance with the protocol.