…OK…I know everyone’s meant to get today more or less off…at least in terms of not having to contend with anything I couldn’t find the time to try to cram into a comment…but…while I have & plan to continue to make a habit of not making a habit of it…the one that I tried to stick at a placeholder for too late to think anyone really saw it yesterday hooked me…&…well…it’s like this?
BAAAAAAABE BABE BABE BABE WAKE UP THEY’RE RECREATING THE 2008 FINANCIAL CRISIS FROM FIRST PRINCIPLES
…& warzel seems to be less of “a right charlie”…in the sense long-ago cockneys heard a silent surname to [berk(e) or hunt – not sure that’s the distinction between a right charlie & a proper charlie but it would be sort of pleasing if it were?]…so much as a charlie who can be right & seems to try to be even about stuff he doesn’t want to be…& the replies to his post about the polymarket thing are…maybe…some value of an indicative read…so…because it’s a morbidly fascinating sort of a rabbit hole to me…I’m not sure there’s a correct route through it to make the whole thing make the maximal amount of sense to the most people but not be boring if you know all of it going in…but…in some semblance of a coherent order
“The public policy case”
[insert dril racist dial tweet]
…here goes nothing?
as someone who works in tech I think it is incredibly important to game out the possible negative uses of your product and guard against them before releasing itif the main use cases for your tech are negative you should not release it at all
…but…give or take the suggestions about things like leavitt leaving it abruptly at the timestamp that pays out on a polymarket…the polymarket stuff isn’t about what happens while a camera is pointing at the principals…so
finance & accounting are both methods of storytelling with numbers.
ideally those stories with number are supposed to be factual reporting, but they don’t have to be.
when stories with numbers become fictional, we tend to call them fraud.
…ish…this is broadly the concept of an audit…so…if you happen to have been born into a fortune reaped at the expense of the taxpayers your family has striven in all ways available to it at all times to avoid as far as possible being…& you structure your holdings so “creatively” that one of those would make it clear to anyone who did that sort of thing with any diligence that you were crooked AF…then the game as you understand it is to not be the squeaky wheel…or the tallest nail…or whatever it is in the metaphor that makes it untenable to not get popped for the audit you can’t pass…out of all the people who can get audited…&…it’s harder to audit one person from your family than it would be to audit potentially several dozen extended families that don’t have enough for that to be complicated…in…lots of ways…but if you claim to be president…twice…& act like you’re the second coming…your…derivatives…trade different…you know…as a random “for instance”
Economics is called "the dismal science" for a reason.
Kinda? That was definitely part of it, but I’ve read Carlyle’s paper and while it is very anti abolition, he also talks a lot about Malthusian economists predicting that cyclical famine was just inevitable, and that’s a big part of why he called it dismal.
I mean a derivatives market works because you’re actually buying and selling options.
I’m guessing Polymarket is like a market where you can buy calls/puts but not sell, so the low long risk isn’t balanced by the uncapped loss risk on the short side.
…I don’t know how it works exactly because I don’t use the platforms…but…from what people who have seem to have said to me…I think you can cash out a position before the market resolves which side of the wager pays out…but…there are ways that betting & trading are both functionally & mechanically different in broadly the ways that make the last part true…you can’t as I understand it lose more that you bet on polymarket so your loss risk is capped…but…lots of people made the observation that it’s illustrating basically this bit of that one
…&…maybe it is…but…like…you can be online for lots of reasons…you might even have to be for work…or be on it because being up on the latest is what pays your bills…but…lots of people are on it in their downtime…& even if you never heard of opportunity cost…you get the benefits of a side-gig…&/or -hustle…so…polymarket…in some ways…is attractive to people who see it as a neat way to personally monetize being excessively online…they’d be the guy our guy wants to have his people short anything they touched because they’re a gigantic piece of shit in the clip…but…they don’t have to be…they can be someone doing basically the same thing they do when they “have a flutter” on the grand national & spend the rest of the year campaigning for the ethical treatment of horses…but…if you think all those people are suckers…well…then it might seem a different sort of interesting?
A friend (really; not me) who is a serious mathematician and software engineer has been delving in to prediction markets for a decade or more, as a hobby. Apparently the easy money is betting against very improbable outcomes that people desperately want to happen. This looks like a slam-dunk example
…there is a seemingly decent reason to think there is a function that allows for the truth being something that tends to coalesce if you ask a big enough sample of people the question
The "collective intelligence" effect where aggregated guesses are more reliable an individual ones is pretty well proven.The problem is getting people to take it seriously, and it turns out that rewarding people who guess best is not the best way to do it. (Seriously! I saw someone link a paper.)
…but…the devil is in the details & the details are about the implementation…& as implemented…you have a system…& once you have a system people will look for how to game the game
This is groundbreaking stuff. I feel lucky to be alive to witness such amazing advancement
…it-always-was.gif…yadda yadda…same old same old…different day…& so on & so forth…but also
Basically a free (almost) 5% return. Markets are known to get wonky at very high and low percentages below the risk-free rate of return. Without looking, I'd bet there are huge limit orders open at 5%. Working as expected, if you understand how the markets work.
The odds of Jesus returning have lowered since but yes. But I imagine there is a small chance that they say he returned on some insane technicality and you'll lose??? Idk, I don't trust it
The reason it's not 0% is the time value of money.If you assume there is a 100% chance Jesus doesn't come back, you should earn the risk free return.The price of the bet should be the same as zero coupon bond with the same end date. They should both approach 100 as maturity approaches
the return at that point is going to be basically 0% though. the only reason it’s 5% now is because of people pumping it for the derivative market that ends on the 17th I think?
…that’s the “bet those odds make it over 5% before then” thing where it says the derivative part
1 group of people has a bet, that they probably bought at around .01/share, and that bet will pay $1/share if this “will Jesus return” bet gets over 5%. So they are paying .05/share (or around that) to drive this price up and win their other bet. Gambling arbitrage, basically
…&…when you look at it like a way to say you’re clever because you can break the law without breaking the law & that will turn you a tidy profit…it…seems like it wouldn’t pass the audit
wait, so you're telling me that if 51% of people placed bets that the moon was made of green cheese we couldn't use that to fund a Moon Cheese Extraction appropriations bill?
…but…elon…pretty much has been doing that to the tune of getting to have people say with a straight face he’s the wealthiest human to have ever existed…if you factor out the stuff in the complicated version of the equation you use to arrive at that…like…that is an entirely closer to accurate description of how that works than I’m comfortable with everyone being so comfortable with?
I’m tired, Charlie. Between learning there is a derivative market for online betting to seeing people say they joined the Patriot Front telegram server to get “cool posters” for their favorite hoi4 mod…I’m just ready for the week to be over.
…but…what’s a derivative market if not an object lesson in second-order effects & emergent properties of complex systems?
That would inevitably be followed by a derivative market betting on the volatility of the primary market. Derivative that, I dare you.
…&…look…snark is fun…& from time to time some mixture of insightful or delightful or enlightening…but…while we live in a world that has the relationship this one does to particular species of numbers…at some point some things that are legit funny…stop being funny…unless you have the right kind of transmission to shift to a darker comedy gearing
"Will the people who created the second market ever be found guilty of fraud, market manipulation, or other crime?" And then watch people in the DoJ's office invest heavily in it and pursue that result to turn a nice profit. It would turn public prosecution into private prosecution.
nah, that's crypto. This is like the Black Sox scandal, except people are gambling on how many gamblers lose money gambling on the gambling on whether the gamblers would get caught bribing the players to throw the games.
Time to go invent the ABS (Apocalypse-Backed Security), which bundles Polymarket bets on second coming / apocalypse scenarios for various major world religions and cults; assuming one of them is right, the aggregate must be +EV!Could do a mezzanine tranche; just Scientology-level cults; no majors.
…now…I guess I would feel like a fraud if I closed out with any of the many bible verses you could pitch at that point like a mic drop moment in a rap battle where you are beloved by god almighty & your opponent has a smiting due for all the moneylending in the temple…even if I’d argue the guy who had a table-flipping crashout about that wouldn’t be so quick to say I didn’t get to go chapter & verse if I felt like it on account of he made that shit open source & it runs fine on aethist or agnostic OS platforms…but…how about this instead…there was a popular book about a “dice man” who chose to bind themselves to determining all manner of outcomes that required them to make a decision that you could express as a choice based on the value of the next roll of their dice…&…some people thought that was cool…but…they would in a lot of cases not be the same people who would think it was the same sort of cool to base those decisions on a horoscope…because astrology is all woo woo nonsense…but it’s rock & roll for how you roll to be all about the roll of the dice…so…those aren’t the same, man
…ok…but…say it’s not astrology…say it’s faith…then…maybe it isn’t christian…so…maybe your tool of divination isn’t astrology…maybe it’s runes…or tarot…maybe you shake the pot of stalks the old fashioned way…or you roll dice…or flip (a) coin(s)…so you know which hexagram to consult in the i-ching
…plenty of people have derived all sorts of utility from all of that stuff…some have even profited from them in various ways & some of those ways even seem like they might not be morally suspect…& if enough people all agree to live like there’s a rule the fake it ’til you make it effect can make that rule act like a thing that is true
…but…it’s also true that the stuff that makes the i-ching thing work…or the runes or the tarot or the horoscope…is the same stuff that makes the “cold reading” stuff that’s so terrifying when derren brown does it like it’s so easy it’s not even worth being other than casual about…work
…& when you ask an LLM a question…underneath all that…you’re doing the i-ching thing
…& that’s not to say you shouldn’t be allowed to or that it can’t work for you to do that…but…if you do it but you think you’re asking the smartest entity that ever existed that knows things because its a thing that can do that & it does that with the entirety of the collected knowledge & musings of all the humanity there’s ever been…you are making a sequence of category errors that are potentially of enormous consequence in terms of your misapprehensions about the output when you then take that & apply it to what- or why-ever you consulted that oracle in the first place
…so…on that basis…it’s probably good that I’m not a religious sort…or I might be feeling compelled to suggest that it ought in some fashion to be an actionable offense of some sort for polymarket to be a tool of the devil that is an affront to god & his great & terrible creation that we might need to do something about before he goes one better on the table flipping & does the full on flood style unilateral theistic crashout?
…be nice if that was the people’s house…&…they banked it in good works & sound infrastructure instead of letting it get looted by pirates while the lunatics claim nobody can claim they aren’t running the asylum & actually it’s the sane people who are crazy in ways that ought to get them locked up or thrown away
…sorry…guess I’m too salty to make up for by putting something sweet in the coffee this morning?
The House always wins.
…be nice if that was the people’s house…&…they banked it in good works & sound infrastructure instead of letting it get looted by pirates while the lunatics claim nobody can claim they aren’t running the asylum & actually it’s the sane people who are crazy in ways that ought to get them locked up or thrown away
…sorry…guess I’m too salty to make up for by putting something sweet in the coffee this morning?
I guess the good news is the tech industry is hellbent on destroying itself.
The bad news is they’re gonna take the world economy with them.
Well … you win some and you lose some.