The Wisdom of Clocks

It is seven o’clock on a Monday evening in Dublin and I am finalising this piece with the tabs still open — Kalshi’s Fed markets repricing the September decision after Friday’s ugly July jobs print, and an AP wire from last week reporting that a federal judge has let Utah enforce its anti-gambling laws against the very same exchange, a ruling that landed on 5 August, the same day Morgan Stanley published the report this piece is about.

Mauboussin and Callahan’s The Wisdom of Crowds in Markets ate my weekend — a mug of tea went cold twice on Saturday morning — and I want to be honest about why: somewhere around page twenty-three it hands you, almost in passing, the thing I have been circling since I wrote in February that prediction markets are truth compressors.

What's Truth Worth?

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Feb 25

"Not everything that counts can be counted, and not everything that can be counted counts." — attributed to William Bruce Cameron

The report’s framework is Surowiecki’s, tidied for practitioners: crowds are wise when three conditions hold — cognitive diversity, an aggregation mechanism, and incentives — and mad when one of them breaks.

My reading, after …