Regarding the second point about how EAs (or anyone else) might exploit an inefficiency in this space, I think it’s tricky just because the amount of other risks that inform the pricing of long-dated bonds. Many of these (climate, demographics, geopolitics, populism etc..) could wipe out any short (or especially leveraged short) position before TAI is realised.
As noted in my other comment I expect for someone with high-conviction views on short TAI timelines there are bets that are:
Much higher in expected returns
Less capital intensive
Less susceptible to other risks
Examples of these bets are broadly discussed elsewhere but often are related to long/short equity bets on disrupting/disrupted companies and companies part of the supply chain (semiconductors design/fab/tooling, datacentre, data aggregators, communications etc..)
I think perhaps at best short long-dated bonds could form part of a short-timelines TAI bet in order to hedge against long positions elsewhere/maintain neutrality against other factors rather than the core position. It feels likely there are considerably better options for someone taking such a bet (as you allude to in the opportunities for future work)
Great post
Regarding the second point about how EAs (or anyone else) might exploit an inefficiency in this space, I think it’s tricky just because the amount of other risks that inform the pricing of long-dated bonds. Many of these (climate, demographics, geopolitics, populism etc..) could wipe out any short (or especially leveraged short) position before TAI is realised.
As noted in my other comment I expect for someone with high-conviction views on short TAI timelines there are bets that are:
Much higher in expected returns
Less capital intensive
Less susceptible to other risks
Examples of these bets are broadly discussed elsewhere but often are related to long/short equity bets on disrupting/disrupted companies and companies part of the supply chain (semiconductors design/fab/tooling, datacentre, data aggregators, communications etc..)
I think perhaps at best short long-dated bonds could form part of a short-timelines TAI bet in order to hedge against long positions elsewhere/maintain neutrality against other factors rather than the core position. It feels likely there are considerably better options for someone taking such a bet (as you allude to in the opportunities for future work)
Ignore the short position: you could just underweight these assets relative to global market portfolio.