The trigger as a blended decline

If every last sale falls by the same fraction, the book that meets the trigger is the trigger itself. The fraction is 1 − $2,655,090.67 ÷ $6,032,795 = 1 − 0.4401 = 0.5599, which is 55.99 percent. That is the headroom percentage from lesson 1, inverted from a remainder into a decline. A uniform 55.99 percent drop takes $6,032,795 to $2,655,090.67 and puts LTV at 70 percent by construction.

The single-name conversions returned negatives because they asked one row to do work the residual had already done. The blended conversion asks every row to do the same proportional work, and the work that remains is exactly the residual of the whole book over the trigger. Headroom of 55.99 percent and a blended breach-decline of 55.99 percent are one number facing two directions.

They part company the moment the decline is not uniform. A 55.99 percent drop in Calder alone, as lesson 14 showed, does not reach the trigger at all. A 55.99 percent drop in the government fund alone does not either. The blended figure is the equal-weight-in-value path. Any other mix of last-sale changes has a different book, and therefore a different distance to $2,655,090.67.

Headroom as a percentage and the uniform decline to the trigger are the same quotient. Naming them twice is naming the remainder and then the drop that consumes it.