# Block 034 card queue — PUSHED + SYNCED 2026-10-06 (resolved)

Anki Desktop was down at close; started via terminal (DISPLAY=:0), AnkiConnect 6565 live. addNotes 5/5 (note IDs 1791286837306, 1791286837315, 1791286837322, 1791286837329, 1791286837336), sync ok, notesInfo verification 5/5. Original queue record: Deck: `Macro Study::Phase 1 — Components::Credit`
Tags: `macro-study phase-1 credit block-034 2026-10 session:2026-10-06`

1. **Front:** HY OAS pinned at 3.12% for two quarters while the credit impulse (net new credit growth) has been decelerating. What does the spread level fail to capture — and why can the impulse roll over with spreads unmoved?
   **Back:** Spread = survival price (expected default loss); impulse = flow of new credit funding growth. "Won't default" ≠ "won't borrow": the flow shrinks via demand (projects no longer clear the hurdle rate) or supply (lenders ration) with zero change in default risk. Index composition prices refinancing risk of the average issuer, not the economy's growth funding. Watch the second derivative: rollover needs no widening.

2. **Front:** Configuration: index HY 312bp, CCC−BB dispersion ~1215bp. Why does this configuration turn FAST rather than gradually? Name the sequencing.
   **Back:** Four ingredients: (1) low aggregate spread base (small moves read as large in %); (2) tail risk re-homed into a small illiquid corner — thin marginal CCC buyer after capital rotated up-quality; (3) first realized defaults → all sellers exit through the same liquid index door; (4) forced index rebalance selling (defaults/fallen angels mechanically ejected). Turn = gap, not bleed.

3. **Front:** HY OAS tightens 40bp, but the next SLOOS prints net EASING. What does this configuration say about the credit, and what do you watch?
   **Back:** Spread = bond-market sentiment; SLOOS = lending-channel capacity. Tight spread + easing standards = the bond market is doing all the funding work — narrow and fragile. SLOOS direction flips before index spreads in a genuine credit turn; read direction, not magnitude (net numbers are small, ±10%). Series: DRTSCILM (L&MM), DRTSCIS (small firms — stickier, lags in easing).

4. **Front:** Two months: S&P −10%, HY OAS +30bp (from 3.12%), next SLOOS still easing. What is the credit read, and what tells you when it crosses over into a credit event?
   **Back:** Growth scare, not credit turn: equities price earnings/valuation; credit prices solvency. +30bp on a 3.12 base is valuation/duration repricing, not distress; easing standards = capacity intact. Weight credit for cycle timing. Crossover tell: dispersion widening + SLOOS flipping to tightening in the same quarter before the index spread moves much — cash-flow pressure compounding into solvency.

5. **Front:** 2026-09-30 tape: HY OAS 3.12%, SLOOS L&MM 0.0% Q3 (8.1 Q2), SLOOS small-firm 1.8% (6.6 Q2), S&P 7,652, CCC−BB ~1215. The call, the caveat, and the first-turn indicator.
   **Back:** Confirming-with-caveat. Benign at aggregate (spreads, standards, equity tape all agree); caveat = loaded dispersion = tail solvency stress that can cascade fast (fast-turn sequencing). First-turn indicator: SLOOS direction (DRTSCILM/DRTSCIS); secondary: CCC−BB widening while the index stays pinned. (Readings vault-pinned — card tests the framework and the ranking, not the numbers.)