I keep seeing people argue that getting the unit price up first is how you solve the coverage problem. Reprice, then absorb the liabilities. It sounds right. I held something close to that view for a while, honestly. But I think it gets the sequence backwards, and the sequence is the whole thing. If you run coverage math while the denominator is still intact, any numerator you assign turns into a debt sink. The system doesn't stabilize at a price, it just demands the next reprice to stay ahead of the margin calls. You end up chasing a moving floor. The collateral never lands because there's nothing for it to land against. Tier-one coverage is density divided by unfunded liabilities, so a huge denominator doesn't just require a high unit price, it requires a continuously rising one, which means you haven't assigned a value at all. What changes the picture is what happens to the denominator before repricing. Extinguishment isn't a payment in the normal sense. Debt can't cancel debt through a transfer. What it actually looks like is netting first, then compression, then reclassification: maturities shifted to perpetual non-interest obligations, coupons zeroed out, the remaining claims rebooked off balance sheet. The liability doesn't disappear, it gets restructured into something that no longer generates margin pressure. Once enough of the denominator has been processed that way, a stable density can actually be assigned, because the collateral isn't being asked to run faster than the obligations it's backing. I might be wrong about how far the denominator compression has to go before a stable price can hold. That's a real uncertainty in the argument. But the directional claim I can't get past: repricing before extinguishment doesn't solve the coverage problem, it just capitalizes it. You end up with a very expensive debt sink.