This is a really good point. Any assessment of risk entails certain larger assumptions about the world, many of which often turn out to be mere guesses. Consi

This is a really good point. Any assessment of risk entails certain larger assumptions about the world, many of which often turn out to be mere guesses. Consider all the prices that are set to their current levels b/c nobody expects the collapse of the US political system to occur. Yet there is a nonzero probability that it will occur. On one hand this seems like an absurd example, yet it exemplifies the kind of blind spot we are prone to when assessing risk. We generally address all the risks we can directly control, then classify the rest as "systemic" which essentially means that we are not able to compute them so we're going to ignore them. Yet many systems which we assume to be stable or predictable (governments, companies, markets, weather patterns, social trends, etc.) have unexpected aberrations now and then which can have very significant consequences. Since these tend to impact most companies equally, the market will converge on an equilibrium where no firms do anything to hedge against these things. Do you want to pay extra bank fees so that your bank can hedge against the collapse of the US currency for your checking account? Probably not. Do you want to triple your hosting costs to hedge against a massive US power grid failure? Probably not. The same applies to asteroid risk and sudden ice age risk. On the other hand, if you have lots of money saved, you may wish to hedge against the collapse of one currency or another, and if your business would end if you suffered a few hours of downtime, you might want to invest in massive amounts of redundancy. Every morning when we all commute to work we risk death. Some exposure to systemic risk is considered acceptable, and part of the character of any person or business is the kind of risk exposure we tolerate day to day. A doctor working in an AIDS clinic risks needle sticks and HIV, a startup doubling its users each month risks downtime but also risks a cash flow crisis.