Zero Signal – Credit Market: A Structural Fragility Analysis of the Single-Name CDS Market
Echoes from the Machine · Part III
Introduction: Zero Signal in the Credit Market
The Zero Signal framework describes a market state in which classical indicators signal calm while structural fragility is already building beneath the surface. The single-name CDS market is a textbook example.
At an aggregate level, 2021–2025 looks unremarkable: the market is growing, trading volume is rising, and the number of traded reference entities stays stable. This surface calm, however, conceals a fragility that standard models systematically miss — not because the data is missing, but because the models are looking for the wrong patterns.