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2003-07-29 Home Front
Pentagon’s Futures Market Plan Condemned
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Posted by tu3031 2003-07-29 10:46:50 AM|| || Front Page|| [11129 views since 2007-05-07]  Top

#1 It's actually not as bizarre as it sounds. Check out Instapundit for more info.
Posted by Spot  2003-7-29 10:58:07 AM||   2003-7-29 10:58:07 AM|| Front Page Top

#2 it makes a lot of sense. Markets tend to distill all the information available to investors. Thus oil markets, for example, tend to reflect info on the mideast political situation faster than any other public source. Unfortunately its not easy to tease out the political side of the oil market from, say, forecasts on summer driving in the US. Markets work precisely because the people speculating have money at stake, and thus an incentive to gather the best info available. The idea would be that we would let investors make side bets, and DoD would monitor the market to look for rumours and such they wouldnt otherwise hear about.

The real problem is the possible incentive for "insider trading" - what if terrorists place bets to make money off events they control? Or worse, what if they attempt to manipulate the markets to give false signals? Or what if states, even "friendly" states, attempt to manipulate the market. (Crown prince abdullah: if we spread the rumour that the israelis are going to assasinate arafat, that would sure distract from us, wouldnt it. Sharon: we know the Saudis are manipulating the market, we have no choice but to respond in kind, etc, etc.)
So its a VERY interesting theoretical idea, but i dont know it would work in practice.
Posted by liberalhawk 2003-7-29 11:12:29 AM||   2003-7-29 11:12:29 AM|| Front Page Top

#3 BTW, if you guys are surprised at me, this is one of the few domestic issues where i lean to the far right - the efficiency of financial markets.
Posted by liberalhawk 2003-7-29 11:13:49 AM||   2003-7-29 11:13:49 AM|| Front Page Top

#4 I agree that this would be a good idea if the market could be free of intervention, but the possibilities of manipulation are just too huge.

That said, I'm long calls on Arafat's assassination by 05.
Posted by mjh  2003-7-29 11:35:12 AM||   2003-7-29 11:35:12 AM|| Front Page Top

#5 I'm not surprised by you liberalhawk. I don't always agree with you but you are consistent and non-trollish.

The problem that I see with this futures market concept is that the entire purpose really is to predict terrorist activities and prevent them from happening. So if you prevent them, then how does everyone know that the market predicted this non-event?
Plus I agree that market manipulation will be a major problem.

An interesting intellectual exercise and maybe it will lead to something useful but I think $8 million over a few years is just a bit too much.
Posted by Kelvin Zero 2003-7-29 11:47:54 AM||   2003-7-29 11:47:54 AM|| Front Page Top

#6 I tend to agree with MJH and LH. The theory might be valid as a statistical model but what do you open yourself up for on that "insider trading" angle? That's why I consider it a bad idea. That said, I'll go long odds on Yasser taking a shower before '05.
Posted by tu3031 2003-7-29 12:03:25 PM||   2003-7-29 12:03:25 PM|| Front Page Top

#7 I'll stay small potatoes on this one:

I want a market that predicts the height of that friggin' pink paper in the stack of documents you see in every shot of Arafat at his desk.
Posted by Carl in NH 2003-7-29 12:16:24 PM||   2003-7-29 12:16:24 PM|| Front Page Top

#8 Latest news indicates it's been pulled, due to all the attacks the Pentagon got over the idea.
Al Guardian report.
Posted by Old Patriot  2003-7-29 1:25:54 PM|| [http://users.codenet.net/mweather/default.htm]  2003-7-29 1:25:54 PM|| Front Page Top

#9 Too weird. If Dimwit Johnny Jihad could go from Marin County to OBL's doorstep in a couple of years basically out of his parents' pocketbook, why the hell didn't CIA think about placing their own "American" looking agents in Afgh.? What about FBI's actions/deficiencies? Gumshoe work is how you get the goods on the bad folks.
Look, I like thinking out of the box, but, as others have said, theoretically-speaking, very fascinating, but practically? Please save the money and put it away in somebody's filing cabinet.
Posted by Michael 2003-7-29 1:51:14 PM||   2003-7-29 1:51:14 PM|| Front Page Top

#10 At least all of America's enemies would finally have an interest in learning how free markets work...
Posted by jason 2003-7-29 3:54:03 PM||   2003-7-29 3:54:03 PM|| Front Page Top

13:19 John
10:59 raptor
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