NYU Stern researcher @NateWitkin questions why cyber insurance rates keep falling if AI cyber risk is accelerating:

“Insurance rates for cyber risk declined by about 4% globally in Q2 of this year, and that’s actually the 12th consecutive quarter in which they’ve declined. This is very valuable signal that implies that at a minimum you shouldn’t overindex on the Hugging Face incident.”

“This is a plea for level headedness, but I think it would be helpful for safety folks to engage with these numbers just ’cause this is an avenue of criticism from folks like me and to an extent folks like Tyler.”

“Why are these numbers not moving? Is it because people are underestimating capabilities? Are they not taking the problem even as close to as seriously as they should or is it something else?”

Here is the link with video.  File under “Questions that are all too rarely asked.”

I am happy to admit that the answers here are far from obvious, and that I am myself expecting prices to rise somewhat.

I will continue to note that there are a remarkable number of ways, seen among other places on Twitter, to rephrase and to rationalize the statement: “I have the most remarkable and important and true macro risk story in the world to tell you.  Unfortunately, it does not correlate with any observed asset market prices.”

The post Insurance price sentences to ponder appeared first on Marginal REVOLUTION.

       

Comments

• In reply to anon. He doesn't need to. Like probably 95% of ... by Wayfaring Stranger
• In reply to hash872. ” aggressively dumb” I wouldn't ... by Wayfaring Stranger
• In reply to hash872. John O’Neill and Richard Clarke in the ... by hash872
• In reply to hash872. True, but if the conclusion is “we ... by Josh
• Most company compromises are non destructive, and the amount ... by Bob
• Plus 10 more...

Related Stories

• How are the market valuations for the U.S: insurers doing?
• Share price numbers for the Hugging Face incident
• Short Videos, Big Self-Control Problems

 

2. Do children grow continuously, or grow in fits and starts?

3. It remains my view that Ferrante is the husband and wife team.

4. Essay on Olaf Stapledon.

5. “US annual interest expense is up to a record 18.5% of federal government revenue. This is officially above the previous record of 18.4% set in 1991. This percentage has more than QUADRUPLED over the last 4 years as interest expenditures on public debt skyrocketed.”  Link.

6. Statistical meddling at the Census Bureau.

The post Sunday assorted links appeared first on Marginal REVOLUTION.

       

Comments

• In reply to ElsieT. So the definition can be change as you ... by Harun
• In reply to SJ. A Confederacy of Dunces was likely a ... by HM
• In reply to SJ. That is one of the great immortal comic ... by Stephen Covell
• In reply to Dismalist. Elsie, you gotta distinguish between ... by Dismalist
• In reply to Y81. If unity is a goal unto itself, it could be ... by Dismalist
• Plus 10 more...

 

The landscape itself is like noting else in the Americas.  The altiplano is flat in the way that only vast geological formations can be flat, not the flatness of a plain that was once a sea, but the flatness of a plateau that was raised bodily by tectonic forces millions of years ago and then scoured by ten thousand years of wind and ice into the extraordinary emptiness it presents today.  The horizon in every direction is uninterrupted.  The sky is immense, a dome of blue so saturated at this altitude that photographs rarely convey it accurately, because the camera’s sensor cannot process a blue that contains no haze, no moisture, no atmospheric diffffusion between the sun and the surface.

And:

Arriving at El Alto International Airport (which sits on the altiplano above the city at forty-one hundred meters, making it the highest international airport in the world), you step off the plane into air so thin that the simple act of carrying your luggage to the terminal produces a shortness of breath that is mildly alarming if you have never experienced it and completely normal if you have.  The airport itself is unremarkable.  What happens next is not.  You get into a taxi or bus and the driver takes you to the edge of the antiplano, and then the city appears, not gradually but all at once, a cascade of buildings and lights and terracotta roofs pouring down the walls of a canyon so steep and so deep that the bottom is invisible from the rim.  La Paz does not reveal itself slowly.  It drops away beneath you like a held breath released.

Recommended, and yes Cochabamba is an amazing food city.

The post *Why Not Bolivia?* appeared first on Marginal REVOLUTION.

       

Comments

• unboliviable by Not Trampis
• In reply to Etalon d'Silomar. Yes. I was surprised to see ... by Larry Siegel
• In reply to Heedless. Are English majors poor writers? Which ... by HM
• In reply to &. I nominate: walls of a canyon so steep and so ... by Pshrnk
• I met with Polar Venezuela in 1980s and they employed Bolivians ... by What remains of German influence
• Plus 10 more...

Related Stories

• My excellent Conversation with Luke Burgis
• Mein Ingeborg Bachmann Studium
• My excellent Conversation with Michael Moritz

 

I study how short-form design amplifies self-control problems in digital media. Short units repeatedly renew temptation that lasts longer than each unit, turning local temptation into sustained overconsumption. Using microdata from a U.S. short-drama platform, I exploit a nonlinear top-up menu to infer viewing plans and show that paying users watch 82.1% more than intended. Structural estimates imply an average temptation horizon of 11.2 minutes, short relative to the full drama but long relative to one-minute episodes. Counterfactuals show that larger decision units, default limits, and breaks improve long-run welfare. A short-video calibration highlights the broader welfare relevance.

That is from Renjie Bao of Princeton University.  I believe a Princeton job market candidate?  Via Quan Le.

The post Short Videos, Big Self-Control Problems appeared first on Marginal REVOLUTION.

       

Comments

• In reply to rsm. Survivorship bias by JFA
• In reply to mkt42. That’s why I only get the snickers ice ... by JFA
• In reply to MikeP. Personally I find the proliferation of ... by Wayfaring Stranger
• From the fans' perspective, baseball games operate on the same ... by Benjamin Cole
• In reply to MikeP. 800-325-3535 by Dismalist
• Plus 10 more...

Related Stories

• How are the market valuations for the U.S: insurers doing?
• Shout it from the rooftops (of the data centers)
• The Kalshi Citizen Debt Forecast (CDF)

 

2. China word of the day.

3. “People Keep Sneaking Into New York City Sewers. No One Knows Why.” (NYT)

4. Yiyang Zhuge has postponed her recording session with CWT, in case you will be wondering why the episode does not show up soon.

5. Who was the most consequential emperor in Chinese history?

6. Are science fiction films becoming more optimistic?

7. Ruxandra on clinical trials as the main obstacle (NYT).

8. The trend in U.S. cyberinsurance prices since 2020.

9. Fermat’s Last Theorem, the number of links cannot keep up with the world.

The post Saturday assorted links appeared first on Marginal REVOLUTION.

       

Comments

• In reply to M. Like, I'm not sure how we can bemoan that ... by M
• In reply to M. Well, Sure, you're the one that said they ... by M
• In reply to M. “It was almost certainly much more ... by Sure
• # 7. Ruxandra on clinical trials as the main obstacle (NYT). ... by MikeP
• In reply to Wayfaring Stranger. 🙂 In ESOP, your risk is ... by Kaz Stanczak
• Plus 10 more...

 

Prediction markets offer a new market-based approach to measuring macroeconomic expectations in real-time. We evaluate the accuracy of prediction market-implied forecasts from Kalshi, the largest federally regulated prediction market overseen by the CFTC. We compare Kalshi with more traditional survey and market-implied forecasts, examine how expectations respond to macroeconomic and financial news, and how policy signals are interpreted by market participants. Our results suggest that Kalshi markets provide a high-frequency, continuously updated, distributionally rich benchmark that is valuable to both researchers and policymakers.

Kalshi gives one example of how this data might be used, the Citizen Debt Forecast (CDF). The CBO forecasts the future debt path but it updates only twice a year and is limited to a legislative baseline even when most observers expect, for example, taxes to increase or spending to be cut. The Kalshi CDF updates continuously and can build in market expectations about future legislative changes.

The Kalshi forecast, as seen below, is slightly more optimistic than the CBO forecast but I don’t read too much into that. The larger issue is how prediction market data can be integrated into a wide variety of forecasts.

The post The Kalshi Citizen Debt Forecast (CDF) appeared first on Marginal REVOLUTION.

       

Comments

• In reply to Devin. Is the regulated sports betting, where the ... by Anonymous
• If you show CBO projections from the 1980s do they shade 40% ... by rsm
• In reply to Devin. Yes lmao, perhaps the real brain drain is ... by Crusader
• In reply to dmcharette. Maybe… the State is more likely to ... by Gilligan
• Tangential thought: When people are addicted to state ... by dmcharette
• Plus 8 more...

Related Stories

• How are the market valuations for the U.S: insurers doing?
• Real GDP Per Capita and the Standard of Living
• The College Wage Premium in the Generative AI Era

 

And so I have been looking into Bachmann more.  Her volume of letters with Max Frisch, her lover and the leading Swiss novelist of his time, is the best “letters book” I know.  After four hundred pages, with another 180 or so to go, I still am not bored.  It is called “Wir haben es nicht gut gemacht.” Der Briefwechsel.  (This November coming out in English…and probably the letters work well in English?)  Overall, it is remarkable how many ups and downs a relationship can have and persist.  It works best to read only a few of the letters at a time, so that the story does not go by too quickly.  One sees connections between the letters and the unfolding of Malina.

She also has letters volumes with Paul Celan and Henze, those are in my pile too.  (She and Henze were just friends.)  And just this year there was a wonderful new biography of Bachmann, namely Dieter Burdorf’s Dieses unruhige Ich: Ingeborg Bachmann.  I have started that.

There is a movie of Malina, an opera too, and a biopic about Bachmann and Frisch.  I have heard Max Frisch’s Montauk is partly about the Frisch-Bachman relationship as well.  And we haven’t even gotten yet to Volker Schlondorff, have we?

Bachmann has poetry in German, and a new edition of her short stories is coming out this fall in English.

It is wonderful to discover something/someone so new and unexpected.  And as I get older and know more, it happens less frequently than it used to.

I will continue with this.  Amazing (and charming) how many words people can spill about “stuff”!

The post Mein Ingeborg Bachmann Studium appeared first on Marginal REVOLUTION.

       

Comments

• https://www.amazon.de/-/en/Malina-Ingeborg-Bachmann/dp/351837... by sumadartson
• In reply to Moral Panic. 😊 Yes—it’s in my toolkit, but ... by Kaz Stanczak
• In reply to JFA. The 19th century novels by women are highly ... by Kalalalar
• In reply to Wayfaring Stranger. No worries. I had to double ... by JFA
• In reply to Kaz Stanczak. If you are not afraid to bail on a ... by Moral Panic
• Plus 10 more...

Related Stories

• My excellent Conversation with Michael Moritz
• *Why Not Bolivia?*
• Astra, doing poetry

 

Internal documents reviewed by the FT show that three days earlier, behind the walls of Vaduz Castle, Europe’s wealthiest ruling dynasty had quietly approved an overhaul that strengthens the authority of a prince who already wields extraordinary power over his 42,000 citizens, while reducing some of the rights and checks exercised by his relatives in the Princely House of Liechtenstein.

Even before the changes, Prince Alois could veto legislation, dismiss the government, dissolve parliament, appoint judges and reject laws approved by referendum. In June, the Catholic prince said he would veto a citizens’ initiative to legalise abortion during the first 12 weeks of pregnancy, even if voters backed it…

The latest changes to the House Law go far beyond succession. According to internal documents, the prince gains greater discretion over who belongs to the dynasty and explicit authority to set rules on family names, titles and coats of arms. The Family Council, a body of relatives that oversees dynastic affairs, will expand from three to five members but loses an important check: the prince will no longer need its consent for pardons, only to consult it…

The reforms were approved not by parliament or the public, but by members of the dynasty itself.

Here is more from Paul Caruana Galizia at the FT.

The post Is Lichtenstein an actual monarchy? appeared first on Marginal REVOLUTION.

       

Comments

• In reply to Marie. Yes, I remember that story. by Steve Griffin
• In reply to Patrick. WTF? As Wolfgang Pauli reportedly said: ... by Bill Allen
• In reply to dearieme. Not until the U.S. Military takes care ... by Bill Allen
• In reply to dearieme. Remember “the Mouse that Roared”! by Dismalist
• In reply to dearieme. Bank of America by Excursive
• Plus 10 more...

Related Stories

• How are the market valuations for the U.S: insurers doing?
• Real GDP Per Capita and the Standard of Living
• Shout it from the rooftops (of the data centers)

 

U.S. insurance stocks have been doing quite well since the beginning of May 2026, and they have materially outperformed the overall market. I’m using the May 1 close through the September 3 close so that we compare complete trading days; these are price changes, excluding dividends.

The cleanest broad measure is the iShares U.S. Insurance ETF (IAK), which covers U.S. life, property and casualty insurers. It rose from $132.01 on May 1 to $147.87 on September 3: +12.0%. An alternative, more equal-weighted measure, the SPDR S&P Insurance ETF (KIE), rose from $56.79 to $64.80: +14.1%.

For comparison, the S&P 500 ETF (SPY) went from $720.65 to $773.17 over the same period, +7.3%. So insurers have beaten the market by roughly 5–7 percentage points in four months.

That is from GPT Pro.  Here is my earlier post on numbers and market valuations.  Do any market prices reflect a realistic chance of very bad outcomes from advanced AI?

Here is advice on how to short those shares.

The post How are the market valuations for the U.S: insurers doing? appeared first on Marginal REVOLUTION.

       

Comments

• Tyler has forgotten the first rule of forecasting: “Never ... by Drew
• In reply to Sure. This is one of the most serious objections, ... by L1
• If we were to find something that fell short of the S&P 500 by ... by Saccharine analysis
• In reply to rsm. No. The risk is that the markets will ... by Sure
• There is a reflexivity additionally to AI development, where ... by Francis Quinn
• Plus 10 more...

Related Stories

• Real GDP Per Capita and the Standard of Living
• Shout it from the rooftops (of the data centers)
• Share price numbers for the Hugging Face incident

 

2. Gloria Steinem, RIP (NYT).

3. Henry Oliver on Finding Emily.

4. Solve for the Russian family squabble equilibrium (short video).

5. New Fuchsia Dunlop book due out October 20.

6. The O-Ring model, restated for AI.

7. Joshua Saxe on AI safety.

8. The pig kidney worked (NYT).

The post Friday assorted links appeared first on Marginal REVOLUTION.

       

Comments

• In reply to Kaz Stanczak. A lot of men talk about finding a ... by Jamie_NYC
• In reply to M. This is a pretty common criticism of the ... by M
• In reply to Cyrus. Yes, I think that's the core challenge you ... by M
• 4. Russian musicologists who find themselves in a heated ... by Jumfrey Tuckins, President of Texas
• 1. “Viktor Emil Frankl (Austrian German: [ˈfraŋkl̩]; 26 ... by Mort Main
• Plus 10 more...

 

The post Real GDP Per Capita and the Standard of Living appeared first on Marginal REVOLUTION.

       

Comments

• In reply to Debt, debt, debt. There has been zero effort to ... by Thomas L Hutcheson
• Appreciate the effort and the sentiment but IMO students should ... by Wayfaring Stranger
• One of the greats! I make my kids watch it. by Panderer
• In reply to rayward. Yes, the real issue now seems to be, as ... by Debt, debt, debt
• If happiness stays constant, do the things that mainstream ... by rsm
• Plus 3 more...

Related Stories

• How are the market valuations for the U.S: insurers doing?
• The College Wage Premium in the Generative AI Era
• The Kalshi Citizen Debt Forecast (CDF)

 

Data-center investment has become one of the largest capital-expenditure cycles in financial markets, with U.S. hyperscalers expected to deploy roughly $700 billion in 2026. This investment boom has raised concerns that large computing loads impose external costs on households through higher electricity prices. Using a 50-state panel for 2021-2024, we find no statistically significant evidence that data-center presence, installed capacity, or capacity expansion predicts residential electricity-price inflation across extensive-margin, intensive-margin, fixed-effects, and timing specifications. We propose an energyinternalization mechanism: hyperscalers can partially internalize incremental electricity demand through contracted or dedicated generation, including solar and wind energy. Consequently, gross datacenter electricity consumption need not translate one-for-one into net pressure on residential electricity supply. The findings suggest that the extraordinary AI capital-investment cycle has not, thus far, produced a detectable residential electricity-price externality.

Here is the article by Yosef Bonaparte, via the excellent Kevin Lewis.

The post Shout it from the rooftops (of the data centers) appeared first on Marginal REVOLUTION.

       

Comments

• In reply to Wayfaring Stranger. You do this thing called ... by QB
• In reply to Wayfaring Stranger. Wow. Absolutely stunning. ... by abitoftruth
• My house uses 2 kilowatts per day. The data center uses 10,000 ... by Mort Main
• Not so much data centres, as centres of de-noetisation. by Joseph Ferguson
• In reply to Wayfaring Stranger. It's not so much that past ... by Joseph Ferguson
• Plus 10 more...

Related Stories

• How are the market valuations for the U.S: insurers doing?
• Short Videos, Big Self-Control Problems
• Real GDP Per Capita and the Standard of Living

 

…major publicly traded cybersecurity firms lost roughly $65–80 billion, or about 8–10% of their combined value, in the days following disclosure of the Hugging Face/OpenAI incident; by early September they had recovered roughly $58 billion, representing about 70–90% of that drawdown, depending on whether July 15 or July 20 is used as the pre-event baseline.

That is from GPT Pro, there is more at the link.  As a very rough approximation, say you dismiss the price bounceback altogether as either random or due to good earnings reports.  You have “the value of previous cybersecurity efforts” falling by eight to ten percent.  I take that to be very broadly consistent with some of the estimates discussed in my previous post on the numbers.

In any case that is a significant sum.  But do note that if the AI models were on the verge of doing truly terrible things to us, the market might estimate the value of our cyberprotection of falling more than eight to ten percent?

More generally, perhaps these numbers could be used to discipline the discussion a bit?  Or will I read long lists of reasons why they show us nothing, in that case try coming up with some other market price-based indicators of AI risk?  Vix will not do it for you, not these days.  I see many metaphors and insinuations and random anecdotes of AI terror, not numbers.  Maybe you think your ideas about AI risk are so important that no market prices can reflect them?  (If you really believe that, does it mean you would not be worried, and would not cite the numbers, if the value of those companies fell by ninety percent?)

I am sure others can improve on what I am putting forward, and furthermore we should track the continuing progress of these share values over time, especially if other AI hack attacks surface.

Overall I am extremely skeptical of arguments that essentially take the form of “what I am concerned about is too big and too important to show up in any market prices.”  Pick your market prices!

The post Share price numbers for the Hugging Face incident appeared first on Marginal REVOLUTION.

       

Comments

• In reply to Long Time Trader. I'm also a portfolio manager at ... by Another long time trader
• In reply to Long Time Trader. Tyler's whole worldview seems ... by Anoniemoose
• In reply to RAD. I'm not interested in punishing bad ... by Curt F.
• In reply to rayward. we are past the point of no return: AI ... by RAD
• In reply to Curt F.. Kevin Roose and Casey Newton spent a ... by RAD
• Plus 10 more...

Related Stories

• How are the market valuations for the U.S: insurers doing?
• Insurance price sentences to ponder
• Real GDP Per Capita and the Standard of Living

 

TC: “Now a short poem in the style of the very best Rilke, in German:”

Die Hand im Schlaf

Nun liegt sie offen. Alles, was sie hielt,
ist in die eigne Schwere heimgekehrt.
Nur eine kleine Höhlung bleibt, als hätte
ein Vogel hier geruht und sie gelehrt,
auch das Entwichene noch zu umgeben,
behutsam, ohne Wunsch nach Wiederkehr.

The post Astra, doing poetry appeared first on Marginal REVOLUTION.

       

Comments

• In reply to Aretino. Thanks for sharing that! Neat thought. by Norman Quick
• In reply to Bill. Yeah, I actually kind of like that poem. by mkt42
• In reply to LivelyClock. Bob Dylan in his book The Philosophy ... by Aretino
• What is the sound of one hand letting go by Kieran
• I asked Gemini for a Burns poem. I got this farrago: The ... by dearieme
• Plus 10 more...

Related Stories

• Short Videos, Big Self-Control Problems
• Mein Ingeborg Bachmann Studium
• How are the market valuations for the U.S: insurers doing?

 

Wall Street banks are pushing large law firms to cut fees, arguing that the business model that has enriched top lawyers for decades is not sustainable in an era of AI.

Morgan Stanley and Citigroup have told major law firms they want to set up new payment arrangements that would save them money, the banks’ in-house lawyers told the FT…

“If the number of hours they’re working on a matter has come down because of AI . . . our expectation is for costs to come down significantly per transaction,” Adam Meshel, global head of legal at Citigroup, told the FT.

He said the bank had started asking law firms to bid for work, explaining during the bidding process how much they were saving using AI…

The ability to complete tasks more quickly could mark “a fundamental altering of the revenue foundation for these mega firms”, he said.

Here is the full FT piece by Kaye Wiggins and Joshua Franklin.  I have been predicting exactly this in many of my talks…

The post And it begins…(a good start…) appeared first on Marginal REVOLUTION.

       

Comments

• In reply to FE. The judges need AI to read all the motions ... by Randall Parker
• Question to any economists here. Will push by the banks, if ... by AMIK
• In reply to Wayfaring Stranger. Competitors outside of the ... by A lawyer
• In reply to Informed observer. Plus, there is a bit of ... by Gilligan
• In reply to rayward. Worse, who is up at 2:30 AM reviewing ... by Gilligan
• Plus 10 more...

Related Stories

• Short Videos, Big Self-Control Problems
• How are the market valuations for the U.S: insurers doing?
• Shout it from the rooftops (of the data centers)