It's a very disorienting thing to have one's professional acquaintances be right about substantially everything except that their insistence that the moon is made of raspberry jam, but for what it is worth, people really did say "raspberry jam!" and Preston really did say "No." https://twitter.com/prestonjbyrne/status/1063520896470667271 …
I mean this is probably taking the absurdity too literally, but in the example of someone believing the moon is made of jam, removal of the moon-sized jam supply from the market would tend to increase the price of jam (if any sophisticated participant believed it to be real).
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The trade that people were usually literally suggesting was "Just short them!" but the venues for shorting them exposed anyone doing business there to such ridiculous levels of counterparty risk that most future worldstates where I was proven correct would result in losing money.
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Definitely counterparty risk is something I hadn’t considered. I was modeling more trading on a centrally cleared exchange, but of course I was dragging in too much with that. Removal of the jam supply is less convincing as the jam’s only current utility is there’s a moon of it.
End of conversation
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