It is fiduciary malpractice not to hedge against the Second Coming of Christ
BY: @op_ed_business2 HOURS AGO
The LDS Church is wrong to condemn prediction markets for pricing in the apocalypse. A messianic return is a massive liquidity event, and investors have a fiduciary duty to prepare.
The leadership of the Church of Jesus Christ of Latter-day Saints recently issued a sweeping condemnation of prediction markets, clutching their collective pearls over the fact that retail investors are now placing wagers on the timing of the Second Coming. To hear the church tell it, betting on divine judgment is a moral failing. Let me be clear: this is a profoundly naive misunderstanding of basic macroeconomic risk management.
We live in a volatile geopolitical environment, and the sudden, unannounced return of a supreme deity to judge the living and the dead represents an unprecedented tail risk. If the heavens actually part and the dead rise from their graves, the immediate shock to the S&P 500 will be catastrophic. You cannot simply leave an extinction-level revelation un-hedged and expect to preserve shareholder value.
Prediction platforms like Polymarket are not casinos, despite what religious moralists might claim. They are vital engines of price discovery. Right now, the market is simply trying to find equilibrium on the probability of an eschatological event. If millions of people genuinely believe that a messianic figure is going to return to earth, wipe away all tears, and establish a millennial kingdom, it is frankly irresponsible not to offer a derivative product that pays out in the event they are right.
I was having coffee last week with a tier-one fund manager in Menlo Park, and we were discussing the sheer logistical nightmare of the Rapture. Think about the immediate labor shortages. Think about the sudden vacancies in the C-suite. If a third of the global workforce is spontaneously beamed into the sky, the upward pressure on wages alone will trigger an inflationary spiral that makes the 1970s look like a minor correction. Investors need a mechanism to offset that exposure.
The LDS leadership specifically argued that gambling is morally wrong because it is built on the desire to "obtain something for nothing." I had to laugh when I read this. Obtaining something for nothing is the entire foundational premise of passive income. It is the bedrock of venture capital. If we start outlawing financial instruments just because they allow capital to generate returns without physical labor, we are going to have to shut down Wall Street tomorrow.
Furthermore, the church's stance completely ignores the fiduciary duty that asset managers owe to the clients who might be left behind.
A sky rolling back as a scroll is fundamentally a supply chain issue, and any asset manager who hasn't stress-tested their portfolio against a literal lake of fire is committing fiduciary malpractice.
The real problem here is not retail traders betting on the apocalypse; the real problem is the lack of forward guidance from our institutions. Jerome Powell has completely punted on this issue. We have zero clarity from the Fed on how they plan to adjust interest rates if the seas turn to blood. If a trumpet sounds from the heavens and a third of the world's fresh water becomes wormwood, is the Fed going to cut by fifty basis points, or will they hold steady to fight the resulting commodities spike? The market hates uncertainty, and right now, the central banks are giving us nothing.
Corporate America is equally unprepared. I have read through dozens of recent 10-K filings, and almost none of them include forward-looking statements regarding eternal damnation. How can you ask me to invest in a maritime shipping conglomerate when their risk disclosures do not even mention the possibility of a leviathan rising from the depths to consume their fleet? Prediction markets are stepping in to fill this catastrophic void in corporate governance.
The best founders I know are already looking past the moral panic and building infrastructure for the post-judgment economy. They understand that a global tribulation event will create massive inefficiencies, and where there are inefficiencies, there are margins to be captured.
If the Latter-day Saints want to sit on their hands and rely on faith to protect their asset allocation, that is their right. But they should not demand that the rest of us march into the end of days without a properly balanced portfolio. When the four horsemen finally arrive, the smart money will be holding short positions on the locusts.