There are some comments here critical of the article (calling it insane, asking how dare people ask how to make a profit off of WWIII), but they seem to be misunderstanding it entirely.
This isn't an article about how to make money off of WWIII, and it goes out of its way to "of course place financial damage a long way down the list of horrors."
The article is actually about how the degree of current political instability that could lead to a WWIII-type situation isn't reflected in current markets at all, and so raises the important question:
1) Are markets correct, and there isn't really any risk of WWIII right now? Is it all unwarranted fear and hype?
2) Or is there a real risk of WWIII, but markets are bad at predicting geopolitical disruption of that potential magnitude?
The article then concludes that the second position is more likely -- don't use a lack of market movement to underestimate the potential for global war, as if it were an accurate prediction market. Because in an actual nuclear war, financial markets cease to mean anything at all.
Metaculus hasn't moved at all. There's some recent comments debating why this is, and some posting reasons to think the market should move upwards.
My guess is this is some evidence for no WWIII, though metaculus can easily be assumed to be at least 10% off at any given moment, given that it's play money and relies on the interest of it's users. And they might not be interested in using their play money on long-term predictions.
The needle has moved on nuclear detonation by 2050:
I'm no geopolitics expert, there might be a reason why nukes went up but not WWIII. Or it might just be that nukes has one-third the activity and so is more moveable. Not sure which of the two to take more seriously.
> 1) Are markets correct, and there isn't really any risk of WWWIII right now? Is it all unwarranted fear and hype?
This should be compared to more recent events (since markets change, trade changes, and with current markets, with stock ownership lasting milliseconds, things are drastically different).
How did markets act before the 2008 crisis? Did they predict it (in hindsight at last), or was it "great" until "whoops" and "taxpayers help"?
Anybody within hundreds of miles of New York, London, Frankfurt, and Shanghai would be dead. That's just 4 h-bombs, and thousands would be exploded. Get a grip man, any war between any two nuclear powers simply cannot be priced into markets. Surely to determine a market price for anything presupposes the existence of the market.
Nukes are powerful but not that powerful, most modern nukes are under a megaton because more power does not scale well in regards to more destruction, instead we moved to multiple smaller warheads.
According to nukemap[1] a Russian SS25 with a 880kt yield would devastate NYC city but not much more.
Furthermore, a good argument can be made that a counterforce strike (a strike aimed mostly at military objectives and command and control infrstracture) is more probable than a countervalue strike (a strike targeting large cities and economic and industrial centers).
[1] https://nuclearsecrecy.com/nukemap/?&kt=800&lat=40.72422&lng...
This line of thinking terrifies me. Nuclear war between major powers would be the end of the world as we know it, full stop. Russia and China know that if they launch a nuke at New York the response will be overwhelming, so their only shot at surviving retaliation would be to hope that a first strike can be definitive.
They are never launching four nukes at American cities. If they launch at all it will be hundreds. At that point, the destruction will be so immense that most people outside of the blast zones will be in for an awfully rough time for whatever remains of their lifetime.
Oh just to be clear, I fully agree. I brought up the counterforce vs countervalue topic because I thought it was an interesting way to further the discussion. But I have to admit that the arguments in favor of "they would only target our silos and major bases" never really convinced me. I just wanted to point out that nuclear weapons aren't that powerful and can't destroy an area hundreds of miles in diameter. The real danger as you said is that major powers have huge stockpiles and can basically afford to blanket an entire continent with warheads. Which mean guaranteed game over for both parties.
I guess it's at least in part caused by the fact the article is behind a paywall and people read the title only.
> Because in an actual nuclear war, financial markets cease to mean anything at all.
I think this is a false dichotomy. Both US and Russia/Soviet Union believe (or at minimum believed at some points) that a limited nuclear war is possible without triggering all-out exchange. In such a scenario, the markets would crash, but likely survive.
You're right. Understanding how a WW3 would affect investors is of utmost importance. Who cares about death, destruction, radiation and stuff. The most important thing is protecting the investments.
Society that wants it's elderly and war veterans to live on something without having to work. An average "investor" is an ordinary person with a savings and a pension. Professional investors mostly manage their money.
The author actually discusses exactly that point at the very bottom of the article but apparently, in their frenzied, dopamine seeking rush to post uninformed kneejerk reactions, many here did not bother to read that far. And that's despite the article being rather short.
I was responding to the discussion, and I consider my response more informed then the rest of it.
I get the feeling you're mostly upset because someone had the gall to question your priorities/perspective; otherwise there would be no need to attack and try to insult me.
Understanding financial implications of this isn’t the same as trying to profit from it. With something this catastrophic you aren’t really likely to anyways. But considering it & preparing to at least remain solvent somehow isn’t necessarily a bad/immoral thing to do
> Do you really imagine the stock market will be a thing after the shit hits the fan?
Yes.
> What part of 'sticks and stones' did you not understand?
I don't believe in the 'sticks and stones' part. Even if I did, it's not something I have to concern myself with—if I do, everything becomes futile anyway.
WW3 doesn't have to mean the end for all civilization.
Despite the headline, this article is not about profits to investors. It's asking if markets are good at predicting future wars. Research suggests they aren't.
Markets were flying high right up until the start of WW1, despite the underlying tensions growing for years before hand. This means we could be closer to a future war than the current market suggests.
Of all post-nuclear-apocalypse stories I've seen or read, I think the movie Threads (1984) (https://www.youtube.com/watch?v=vgT4Y30DkaA) does the best job hammering home just how miserable and hopeless life will be for everyone except a tiny fraction of lucky and privileged survivors.
Maybe those are the people who will still be worrying about investments after WW3...
Most of us will be at home fighting about whether it should really be called WWIII, while only an unlucky few fight the actual war. Global capital will soldier on.
There's different possible outcomes of course, but I believe only in the absolute worst case (dozens of nukes across Europe and North America) do the banks stop caring who owns Amazon, even if Amazon is manufacturing attack quadcopters.
Societies have failed to develop industrial scale investing for centuries. E.g. the Ottoman Empire and its successor states, due to high levels of endemic corruption. A societal trust/faith breakdown may indeed bring an end to investing as we know it. The countdown for the crumbling of the spiritual foundations of Western Civilization continues apace.
Depends on the outcome of WW3:
is it going to be a MAD (Mutually Annihilated Destruction)outcome where only losers survive or is there a single clear winner with the sole reset button.
Empirical from the past 2 world wars, opportunities abound from destructions; but only up to a point; push beyond its tipping point of MAD, the Ecclesiastical meaningless, everything is meaningless would come to past.
Even in a WWIII scenario, there would be some form of economy. The composition of the GDP would drastically change. But there would still be demand for food and clothing and of course military goods etc. All these require capital for which investors will collect part of the profits.
So I think a diversified portfolio would still be valid. Even if the stock markets would be closed for years, I could sleep well as some of my companies will go bankrupt and others will have much higher profits.
The composition of GDP wouldn't change, it would disappear. The demand for clothing and food would be defined by violence, not by markets. (Although you could argue that markets are the same kind of violence, but in a very abstracted form.)
In case of a major total war, any participant in the conflict would very likely quickly switch to a war economy, in practice a centrally planned economy.
I'm sure there would still be ample opportunity for profiteering before the nuclear holocaust for the dedicated individual, but personally the return of investment would be the last of my worries.
Couldn't this easily be solved with a WW3 prediction market? Why try to find proxies for such an event when one could speculate on the outcome directly? It's simply a more efficient market.
> Couldn't this easily be solved with a WW3 prediction market? Why try to find proxies for such an event when one could speculate on the outcome directly? It's simply a more efficient market.
Deep OTM calls on VIX (ETF ticker $UVXY) would be something similar to that. If WW3 happens, VIX will skyrocket.
Furthest expiry available as of today for $UVXY options is Jan 16, 2026.
I think a prediction market would suffer from the same problem as regular markets: if everyone dies in a fiery nuclear conflagration, nobody's going to collect on either side.
By definition, a prediction market doesn't work if one side is betting on the prediction market ceasing to exist.
If we get to WW3, It all depends on how well the Soviet Union's massive nuclear arms stockpile has held up under 30+ years without maintenance. If more than 1% work, there won't be a world economy. If more than 10% work, we're back down to the few handfuls of survivors who luck out with regards to fallout, etc.
However, if the US isn't willing to wait long enough to find out, and launch the US stockpile first... it's game over.
Not to nitpick your word choice, but taking you literally:
WWIII isn't synonymous with nuclear armageddon, and not just contingent on Russia's stockpile. To give an example:
China invades Taiwan, but all three conflicts remain frozen like Ukraine. Death tolls reach the hundreds of thousands, smaller regional conflicts emerge, more stuff is happening than the news can cover. But 95% of people are living their lives as normal, fighting online about whether this should be called WWIII instead of actually fighting in WWIII. The economy becomes weirder, but no worse than during Covid, shortages emerge and disappear as global capital continues to operate.
Or a more dire example:
An avalanche of wars break out, only grifters deny it's WWIII. Pakistan becomes completely overrun and drops a warning nuke, feeling as though it has nothing to lose. Fearing normalization of nukes, most world leaders shift to focusing on preventing this, planning a conventional retaliation of Pakistan alongside threats of totally annihilating it Pakistan if it launches another.
That said, the tail risk absolutely exists and should be our primary concern, given that billions dead is much much worse than millions.
It seems as if China's modernized and growing nuclear arsenal would be more relevant. Also, unstable states with working nuclear weapons such as India, Pakistan, and Israel.
There had been rumors about doomsday devices in the past. But even without that, second and third order effects should be counted too. At least for big or widespread enough events, because we live in a complex system.
Yeah, even the infamous concept of nuclear winter is a very uncertain hypothetical scenario. In popular imagination, an all-out nuclear war is civilization-destroying, but that's again far from certain. Contra-intuitively, these are not necessarily good news.
I think that thousands of MRVs hitting targets around the world is bound to throw enough stuff into the stratosphere to disrupt agriculture, and push cancer rates through the roof for survivors.
As for pandemics, Fauci's deadly toy was just stupidity at work(take a "safe" organism, and make it deadly, but do it in a BSL2 lab, instead of a BSL4 lab), not some grand plan. A planned release of something deliberately deadly would decimate humanity before the mutations hit.
There is a very delicate balance between how easily a virus spreads and how well it kills.
The best spreading virus has you running around joyfully coughing in everyone's face (like common cold). The best killers die out, because you can't really infect anyone when you're dead (like Ebola).
Maybe a virus can be truly airborne (not in aerosols, which do hit the floor or dry out), have a very delayed onset, such that if infects billions and then kills... But we haven't seen this in nature so I'm not really expecting us human to create something so advanced and complex in its behavior.
This article is insane, there's no other word for it. If anybody even survived WWIII, it would be to a life which was not even worth living.
There wouldn't be anything like investors after WWIII. To all those billionaires building bunkers: what, exactly, are you going use to pay your guards with, which is more valuable than what they are guarding? How are you even going to get to your bunker? Call an Uber?
Speculations as to what this would mean to your portfolio indicate a mentality so far out of touch with reality that as to be indistinguishable from the ravings of a lunatic.
I feel like you didn't read the article. The article is not about profits or millionaires building bunkers. This is about whether markets are good at predicting a future war. Looking at WWI and WWII suggest they aren't, and we could be a lot closer to WWIII than current market stability suggests.
Sure seems like the powers that be want this to turn into something much bigger. A lot of saber rattling and egging on coming from capital. Their unicorns are all spent, so I guess their next target is profiting off large swaths of the world population dying?
This isn't an article about how to make money off of WWIII, and it goes out of its way to "of course place financial damage a long way down the list of horrors."
The article is actually about how the degree of current political instability that could lead to a WWIII-type situation isn't reflected in current markets at all, and so raises the important question:
1) Are markets correct, and there isn't really any risk of WWIII right now? Is it all unwarranted fear and hype?
2) Or is there a real risk of WWIII, but markets are bad at predicting geopolitical disruption of that potential magnitude?
The article then concludes that the second position is more likely -- don't use a lack of market movement to underestimate the potential for global war, as if it were an accurate prediction market. Because in an actual nuclear war, financial markets cease to mean anything at all.