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  • Okay, Now this is Stupid

    Pentagon's Futures Market Plan Condemned

    By KEN GUGGENHEIM
    WASHINGTON - The Pentagon is setting up a stock-market style system in which investors would bet on terror attacks, assassinations and other events in the Middle East. Defense officials hope to gain intelligence and useful predictions while investors who guessed right would win profits.

    Two Democratic senators demanded Monday the project be stopped before investors begin registering this week. "The idea of a federal betting parlor on atrocities and terrorism is ridiculous and it's grotesque," Sen. Ron Wyden, D-Ore., said.

    The Pentagon office overseeing the program, called the Policy Analysis Market, said it was part of a research effort "to investigate the broadest possible set of new ways to prevent terrorist attacks." It said there would be a re-evaluation before more money was committed.

    The market would work this way. Investors would buy and sell futures contracts _ essentially a series of predictions about what they believe might happen in the Mideast. Holders of a futures contract that came true would collect the proceeds of investors who put money into the market but predicted wrong.

    A graphic on the market's Web page showed hypothetical futures contracts in which investors could trade on the likelihood that Palestinian leader Yasser Arafat would be assassinated or Jordanian King Abdullah II would be overthrown.

    Although the Web site described the Policy Analysis Market as "a market in the future of the Middle East," the graphic also included the possibility of a North Korea missile attack.

    That graphic was apparently removed from the Web site hours after the news conference in which Wyden and fellow Democratic Sen. Byron Dorgan of North Dakota criticizing the market.

    Dorgan described it as useless, offensive and "unbelievably stupid."

    "Can you imagine if another country set up a betting parlor so that people could go in ... and bet on the assassination of an American political figure, or the overthrow of this institution or that institution?" he said.

    According to its Web site, the Policy Analysis Market would be a joint program of the Pentagon's Defense Advanced Research Projects Agency, known as DARPA, and two private companies: Net Exchange, a market technologies company, and the Economist Intelligence Unit, the business information arm of the publisher of The Economist magazine.

    DARPA has received strong criticism from Congress for its Terrorism Information Awareness program, a computerized surveillance program that has raised privacy concerns. Wyden said the Policy Analysis Market is under retired Adm. John Poindexter, the head of the Terrorism Information Awareness program and, in the 1980s, a key figure in the Iran-Contra scandal.

    In its statement Monday, DARPA said that markets offer efficient, effective and timely methods for collecting "dispersed and even hidden information. Futures markets have proven themselves to be good at predicting such things as elections results; they are often better than expert opinions."

    The description of the market on its Web site makes it appear similar to a computer-based commodities market. Contracts would be available based on economic health, civil stability, military disposition and U.S. economic and military involvement in Egypt, Iran, Iraq, Israel, Jordan, Saudi Arabia, Syria and Turkey.

    Contracts would also be available on "global economic and conflict indicators" and specific events, for example U.S. recognition of a Palestinian state.

    Traders who believe an event will occur can buy a futures contract. Those who believe the event is unlikely can try to sell a contract. The Web site does not address how much money investors would be likely to put into the market but says analysts would be motivated by the "prospect of profit and at pain of loss" to make accurate predictions.

    Registration would begin Friday with trading beginning Oct. 1. The market would initially be limited to 1,000 traders, increasing to at least 10,000 by Jan. 1.

    The Web site says government agencies will not be allowed to participate and will not have access to the identities or funds of traders.

    The market is a project of a DARPA division called FutureMAP, or "Futures Markets Applied to Prediction." FutureMAP is trying to develop programs that would allow the Defense Department to use market forces to predict future events, according to its Web site.

    "The rapid reaction of markets to knowledge held by only a few participants may provide an early warning system to avoid surprise," it said.

    It said the markets must offer "compensation that is ethically and legally satisfactory to all sectors involved, while remaining attractive enough to ensure full and continuous participation of individual parties."

    Dorgan and Wyden released a letter to Poindexter calling for an immediate end to the program. They noted a May 20 report to lawmakers that cited the possibility of using market forces to predict whether terrorists would attack Israel with biological weapons.

    "Surely such a threat should be met with intelligence gathering of the highest quality _ not by putting the question to individuals betting on an Internet Web site," they said.

    Wyden said $600,000 has been spent on the program so far and the Pentagon plans to spend an additional $149,000 this year. The Pentagon has requested $3 million for the program for next year and $5 million for the following year.

    Wyden said the Senate version of next year's defense spending bill would cut off money for the program, but the House version would fund it. The two versions will have to be reconciled.

    On the Net:

    Policy Analysis Market: www.policyanalysismarket.org

    DARPA's FutureMap Web site: http://www.darpa.mil/iao/FutureMap.htm
    http://www.dunnconnect.com/articles/...s124195-06.txt
    My first thought was this is a kind. My second thought was, if it isn't, I'm going to be rich. I could steal post here and use them to invest in the market.

    In the end, I concluded this is the dumbest ideal I've heard of in quite some time, and would not participate in such a market. The Middle East is *ucked for the foreseeable future. Iraq can become the safest place on Earth. It still won't stop the ongoing political, economic, and social turmoil that has made the sand run red with blood.

    A quick analysis of the Middle East would lead anyone to conclude that the safest bet is to invest in the near-to worse case scenarios.

    I would hope the Pentagon recalls this ideal. If it wants more independent resources, the money should be spent contracting political and military analysts from around the world, particularly the Middle East. Otherwise, terrorists, who are likely still in the US will invest in the market, then move it through their own actions.
    "As soon as men decide that all means are permitted to fight an evil, then their good becomes indistinguishable from the evil that they set out to destroy."-Christopher Dawson - The Judgement of Nations, 1942

  • #2
    What are the odds against Middle East peace? Sounds like a safe wager.
    "There is no great genius without some touch of madness."

    Seneca (5 BC - 65 AD)

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    • #3
      It is a shame they are scrapping the program. It was a brilliant idea.
      "Speaking here in my capacity as a polished, sophisticated European as well, it seems to me the laugh here is on the polished, sophisticated Europeans. They think Americans are fat, vulgar, greedy, stupid, ambitious and ignorant and so on. And they've taken as their own Michael Moore, as their representative American, someone who actually embodies all of those qualities." - Christopher Hitchens

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      • #4
        Please no more brillant ideas. The stock market is just another way to gamble. The idea that the market is always right has unfortunately been proven wrong on several occasions.

        For example I'd put my money against Arafat being assassinated. Why? Basically because he's lasted this long, I'd say the odds are pretty good he will survive. However this is no expert opinion, just the uninformed view of one investor.

        Of course the conflict of interest here are fairly obvious. Invest some money, do something bad, and take home a huge profit.
        Last edited by Chuck?; 30 Jul 03, 07:11.
        "There is no great genius without some touch of madness."

        Seneca (5 BC - 65 AD)

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        • #5
          Originally posted by kid kool
          It is a shame they are scrapping the program. It was a brilliant idea.
          Completely agree. There's a lot of research to show that collective predictions on future events are more accurate than individual one's. Too bad our Luddite Senators don't even bother wondering if it would be effective or not before condemning it.

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          • #6
            Originally posted by Tex

            There's a lot of research to show that collective predictions on future events are more accurate than individual one's.
            I agree in principle that this is true. However in reality this market could have a bad impact on policy. Prices for wars and terror attacks will be manipulated for various purposes, including changing public opinion and government policy.
            "There is no great genius without some touch of madness."

            Seneca (5 BC - 65 AD)

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            • #7
              The values would never get at high enough levels to really motivate somebody to malice for financial gain. It's more along the lines of attempting to motivate employees to think about the probability of potential threats on their free time rather than say a football pool.

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              • #8
                Originally posted by Tex
                The values would never get at high enough levels to really motivate somebody to malice for financial gain.
                Your faith in your fellow man is refreshing. I, on the other hand, would like to be in the market that wagers on how long it will take 'till some one manipulates the 'assassination and coup de tat' market.

                Ain't it neat how these markets multiply...
                And we are here as on a darkling plain
                Swept with confused alarms of struggle and flight,
                Where ignorant armies clash by night.


                Matthew Arnold

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                • #9
                  On a personal level I would love to dabble in a market where I could bet on wars and assassinations, terror attacks. Etc.
                  It's what Im interested in anyway.
                  I'm sure I could make money on this.

                  Like would I have betted on a major terrorist attack by Muslim fanatics in the USA in the year 2001 involving crashing a civilian airliner with hundreds on board into a major building in say Washington D.C. ?..... of course because the probability of it stood out like a sore thumb!

                  But would it be moral to make money from something like that? No way the whole idea stinks!
                  http://www.irelandinhistory.blogspot.ie/

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