Doom doesn’t imply that everyone believes in doom before it happens.
Do you think that the evidence for doom will be more obvious than the evidence for atheism, while the world is not yet destroyed?
It’s quite possible for doom to happen, and most people to have no clue beyond one article with a picture of red glowing eyed robots.
If everyone does believe in doom, there might be a bit of spending on consumption. But there will also be lots of riots, lots of lynching and burning down data centers and stuff like that.
In this bizarre hypothetical where everyone believes doom is coming soon and starts enjoying their money while they can, then society is starting to fall apart, and the price of luxuries is through the roof. Your opportunities to enjoy the money will be limited.
Rob Miles also makes the point that if you expect people to accurately model the incoming doom, you should have a low p(doom). At the very least, worlds in which humanity is switched-on enough (and the AI takeover is slow enough) for both markets to crash and the world to have enough social order for your bet to come through are much more likely to survive.
If enough people are selling assets to buy cocaine for the market to crash, either the AI takeover is remarkably slow indeed (comparable to a normal human-human war) or public opinion is so doomy pre-takeover that there would be enough political will to “assertively” shut down the datacenters.
I think the idea is that short position pays off up-front, and then you don’t need to worry about the loan if everyone’s dead.
If by paying off you mean this bet actually working I think you’re right though. It seems more likely that the stock market would go up in the short term, forcing you to cover at a higher price and losing a bunch of money. And if the market stays flat, you’ll still lose money on interest payments unless doom is coming this year.
Also, in this case you want to actually spend the money before the world ends. So actually losing money on interests payments isn’t the real problem, the real problem is that if you actually enjoy the money you risk losing everything and being bankrupt/in debtors prison for the last two years before the world ends. There’s almost no situation in which you can be so sure of not needing to pay the money back that you can actually spend it risk-free.
I think the riskiest short-ish thing that is even remotely reasonable is taking out a 30-year mortgage and paying just the minimum amount each year, such that the balance never decreases. Worst case you just end up with no house after 30 years, but not in crippling debt, and move back into the nearest rat group house.
I don’t understand why you would short the market if your P(Doom) is high. I think most Dooms don’t involve shorts paying off?
Theoretically, if everybody starts to believe in doom, they sell their assets to spend on consumption, so market crashes and shorts pay off.
Problems with that.
Doom doesn’t imply that everyone believes in doom before it happens.
Do you think that the evidence for doom will be more obvious than the evidence for atheism, while the world is not yet destroyed?
It’s quite possible for doom to happen, and most people to have no clue beyond one article with a picture of red glowing eyed robots.
If everyone does believe in doom, there might be a bit of spending on consumption. But there will also be lots of riots, lots of lynching and burning down data centers and stuff like that.
In this bizarre hypothetical where everyone believes doom is coming soon and starts enjoying their money while they can, then society is starting to fall apart, and the price of luxuries is through the roof. Your opportunities to enjoy the money will be limited.
I agree with your point! That’s why I started with the word “theoretically”.
Rob Miles also makes the point that if you expect people to accurately model the incoming doom, you should have a low p(doom). At the very least, worlds in which humanity is switched-on enough (and the AI takeover is slow enough) for both markets to crash and the world to have enough social order for your bet to come through are much more likely to survive. If enough people are selling assets to buy cocaine for the market to crash, either the AI takeover is remarkably slow indeed (comparable to a normal human-human war) or public opinion is so doomy pre-takeover that there would be enough political will to “assertively” shut down the datacenters.
I think the idea is that short position pays off up-front, and then you don’t need to worry about the loan if everyone’s dead.
If by paying off you mean this bet actually working I think you’re right though. It seems more likely that the stock market would go up in the short term, forcing you to cover at a higher price and losing a bunch of money. And if the market stays flat, you’ll still lose money on interest payments unless doom is coming this year.
Also, in this case you want to actually spend the money before the world ends. So actually losing money on interests payments isn’t the real problem, the real problem is that if you actually enjoy the money you risk losing everything and being bankrupt/in debtors prison for the last two years before the world ends. There’s almost no situation in which you can be so sure of not needing to pay the money back that you can actually spend it risk-free. I think the riskiest short-ish thing that is even remotely reasonable is taking out a 30-year mortgage and paying just the minimum amount each year, such that the balance never decreases. Worst case you just end up with no house after 30 years, but not in crippling debt, and move back into the nearest rat group house.