I’m a bit confused by this comment. Is the claim that you can’t profit from taking out a loan that you have to pay back in 2040? The fact that you get money now and have to pay it back at a time when hypothetically money no longer matters seems like profit to me. If Omega whispers the truth into my ear that in 2040 there will be foom, then that’s guaranteed profit.
Nobody will give you an unsecured loan to fund consumption or donations with most of the money not due for 15+ years; most people in our society who would borrow on such terms would default. (You can get close with some types of student loan, so if there’s education that you’d experience as intrinsically-valued consumption or be able to rapidly apply to philanthropic ends then this post suggests you should perhaps be more willing to borrow to fund it than you would be otherwise, but your personal upside there is pretty limited.)
It might be challenging to borrow (though I’m not sure), but there seem to be plenty of sophisticated entities that should be selling off their bonds and aren’t. The top-level comment does cut into the gains from shorting (as the OP concedes), but I think it’s right that there are borrowing-esque things to do.
The reason sophisticated entities like e.g. hedge funds hold bonds isn’t so they can collect a cash flow 10 years from now. It’s because they think bond prices will go up tomorrow, or next year.
The big entities that hold bonds for the future cash flows are e.g. pension funds. It would be very surprising and (I think) borderline illegal if the pension funds ever started reasoning, “I guess I don’t need to worry about cash flows after 2045, since the world will probably end before then. So I’ll just hold shorter-term assets.”
I think this adds up to, no big investors can directly profit from the final outcome here. Though as everyone seems to agree, anyone could profit by being short bonds (or underweight bonds) while the market started to price in substantial probability of AGI.
If you’re in charge of investing decisions for a pension fund or sovereign wealth fund or similar, you likely can’t personally derive any benefit from having the fund sell off its bonds and other long-term assets now. You might do this in your personal account but the impact will be small.
For government bonds in particular it also seems relevant that I think most are held by entities that are effectively required to hold them for some reason (e.g. bank capital requirements, pension fund regulations) or otherwise oddly insensitive to their low ROI compared to alternatives. See also the “equity premium puzzle”.
I don’t know whether I defend Yudkowsky’s view (I only skimmed), but:
The “profit” in the scenario you describe doesn’t seem sufficient to move the market (as small investors), because it isn’t “profit” that you can keep growing and reinvesting (snowballing) until your Special Insights (TM) fix the market;
If you end up with a scenario where 2040 arrives and it’s Utopia, then there may not be any serious incentive to care, whereas there would be downside risks if it doesn’t occur: if you’re right, cool, you lived slightly better for 20 years out of a 1,000,000,000-year life of happiness; if you’re wrong you might be in so much debt you can’t pay medical bills/whatever, and die before actual AGI date.
I’m not confident you could get massive loans with no collateral and no business model or whatnot to repay the loans come 2040.
I’m a bit confused by this comment. Is the claim that you can’t profit from taking out a loan that you have to pay back in 2040? The fact that you get money now and have to pay it back at a time when hypothetically money no longer matters seems like profit to me. If Omega whispers the truth into my ear that in 2040 there will be foom, then that’s guaranteed profit.
Nobody will give you an unsecured loan to fund consumption or donations with most of the money not due for 15+ years; most people in our society who would borrow on such terms would default. (You can get close with some types of student loan, so if there’s education that you’d experience as intrinsically-valued consumption or be able to rapidly apply to philanthropic ends then this post suggests you should perhaps be more willing to borrow to fund it than you would be otherwise, but your personal upside there is pretty limited.)
It might be challenging to borrow (though I’m not sure), but there seem to be plenty of sophisticated entities that should be selling off their bonds and aren’t. The top-level comment does cut into the gains from shorting (as the OP concedes), but I think it’s right that there are borrowing-esque things to do.
The reason sophisticated entities like e.g. hedge funds hold bonds isn’t so they can collect a cash flow 10 years from now. It’s because they think bond prices will go up tomorrow, or next year.
The big entities that hold bonds for the future cash flows are e.g. pension funds. It would be very surprising and (I think) borderline illegal if the pension funds ever started reasoning, “I guess I don’t need to worry about cash flows after 2045, since the world will probably end before then. So I’ll just hold shorter-term assets.”
I think this adds up to, no big investors can directly profit from the final outcome here. Though as everyone seems to agree, anyone could profit by being short bonds (or underweight bonds) while the market started to price in substantial probability of AGI.
If you’re in charge of investing decisions for a pension fund or sovereign wealth fund or similar, you likely can’t personally derive any benefit from having the fund sell off its bonds and other long-term assets now. You might do this in your personal account but the impact will be small.
For government bonds in particular it also seems relevant that I think most are held by entities that are effectively required to hold them for some reason (e.g. bank capital requirements, pension fund regulations) or otherwise oddly insensitive to their low ROI compared to alternatives. See also the “equity premium puzzle”.
I don’t know whether I defend Yudkowsky’s view (I only skimmed), but:
The “profit” in the scenario you describe doesn’t seem sufficient to move the market (as small investors), because it isn’t “profit” that you can keep growing and reinvesting (snowballing) until your Special Insights (TM) fix the market;
If you end up with a scenario where 2040 arrives and it’s Utopia, then there may not be any serious incentive to care, whereas there would be downside risks if it doesn’t occur: if you’re right, cool, you lived slightly better for 20 years out of a 1,000,000,000-year life of happiness; if you’re wrong you might be in so much debt you can’t pay medical bills/whatever, and die before actual AGI date.
I’m not confident you could get massive loans with no collateral and no business model or whatnot to repay the loans come 2040.