This concept, aside from the repulsiveness of the idea, has at least two fatal flaws.

Let's say I and many others are "bullish" on a terrorist event and the government uses this knowledge that something is likely to happen to prevent it from happening. I then lose my money, because the event didn't occur. Not good for me.

If the event actually happens and I have predicted it, what do you suppose will happen then? My guess is that my telephone will be tapped, I can expect a visit from the FBI, probable interrogation and possible imprisonment for having "terrorist ties." Not good for me.

So please explain to me exactly is the incentive for an investor to enter this market?

All but on of the quotes defending this project in the Wired story (including the one the PI parrots above) come from individuals who stand to make considerable personal financial gains should the project be funded. Look at your sources, people! And, in the case of the PI, look at your source's sources. The Wired story is truly awful journalism.

The Soviets would have loved this. A way to feed disinformation through thousands of sources, either by using agents as legitimate sources, or feeding lies to legitimate sources. For some reason, the Pentagon thinks the FSB or any other big organization wouldn't mess with the market in these days.

While war of any kind is always a lose/lose game, this one seems made for [and by] mischief-makers.

The concept has yet another fatal flaw, in that outcomes in other futures markets cannot generally be determined by the actions of any single investor. Terrorism, on the other hand, relies explicitly on the actions of one person or a small cabal.

DOWN WITH POINDEXTER

DOWN WITH BUSH

DOWN WITH ZIOINST TERRORISTS

The Terrorist Event Market is an excellent idea. It utilizes new information resources that haven't been fully tapped.

The point that everyone overlooks is that the PURPOSE of this is to PREDICT AND PREVENT terrorism.

The market would make terrorist events self correcting:
If a terrorist group or someone in the know, bets big on an event, the market will display this and the Government will react to up security in that particualar area.

If a trader is succesful in a prediction, then yes, there is the possiblity the FBI would investigate to see how that person knew of the event ahead of time. But if you are not a terrorist, then what are you worried about? Odds are only the 'big betters' are going to get anyones attention anyway.

The democrats who fight this idea are just feeding public ignorance in the hopes to gain politial power.

Once again the Democrats are showing us that their power is more important to them than the saftey of the people.

Talk about going to jail for insider trading!

If I win, not only do I go to jail, but I do not get a lawyer, because I am a terrorist.

Sounds like a real winner to me!

All people who win at cards are card counters,
just ask a casino...

This is pure insanity. Market ideologues treat life as a game whose purpose is power. The world as gameboard, the masses as pawns, the market as the solution to everything - ask no questions!

Nobody can promise ensure that there won't be insider trading. And since there would be huge sums to be made from correctly predicting terror attacks, we have every reason to believe there will be. Jeeziz, people, remember Enron, Adelphia, Tyco et. al., say nothing of the massively secret and dishonest Bush Admin!!!

Get serious!

Today we have corporate scandals to manipulate the stock prices. Tomorrow with PAM, we will have Terrorist Scandals. Imagine an investor actually hoping that a terrorist strike against America be carried out. And then imagine him helping some terrorist elements to actually carry it out so that he can make a huge sum. The Pentagon has gone nuts. There are some things that cannot be viewed through the prism of capitalism. Its a novel idea and sounds good on paper, but the Republicans in their frenzy to come up with something "fresh" have lost sight of the whole problem. Determined terrorists will find ways to circumvent the system and fanatics donot follow the law of economics. They canot be fit into a model of probabilities and predictability. It does not matter how accurate we can get in predicting and hence, stopping the attacks. What matters is when will we be able to stop attacks being planned against us in the first place. Because, once attacks stop being planned, the need to predict them vanishes. This is a political problem and will be solved only with politics. Bush has pushed us back a 100 years on the political front. And the Pentagon is trying to outdo him. Help us God.

You all are missing the point. The whole *goal* of an idea market such as this is to privatize (and marketize) the investigative process. This idea market is an implicit admission by the administration that they are just not up to the task of gathering terror intelligence - not only that, but they are not even up to the task of *hiring* someone to conduct terror intelligence. They think the private sector would be a much better at it, especially as a distributed effort. In this I agree. Certainly the real terrorists would not trade directly in these futures. But someone who thought they could get very good information on terrorist activities might, one way or another. The point is that it gathers information from many sources.

I expect that large investigatory firms might take up the process of monitoring worldwide terrorist activity and trading in these futures. If a such a firm made correct predicitions, they would profit from it and continue in their successful pursuits. If they didn't, then they would either go out of business or move on to more profitable ventures.

The great thing about this idea market is that it privatizes the investigatory process. Of course these private organizations will certainly still have to operate within the law - that's not the issue. The issue is the sheer incompetence of government, precisely because the the selective process for government organizations is very weak. Private organizations must be very competitive to stay alive. Government organizations must only give the impression of doing something useful or necessary and not attract attention to themselves. Even when they get in the worst of trouble, they only suffer a few minor managerial replacements - not wholesale destruction of the organization.

-Ansel F.

DARPA invented the Internet people. They know a good idea when they see one, and this was a good idea.

It's just too bad our government is run by a bunch of demagogues who spout off about things they don't even have any knowledge of...

The part i find most disturbing is how there is a site devoted to the middle east. I think this is outright racism and religious bigotry. We are so set on finding terrorist from the Middle E, that we forget about Ted Kazensckys out there, as well as tokyo subway terrorist, as well as other religious fanactics from christianity, hindism buddhism. Yes M.E. is whats in the news, but we should approach this from all fronts or not at all.

Surely some energetic internet entrepreneur will take up this idea. There will probably be a whole spate of terrorism betting parlors before you can say John Poindexter is a dangerous slug. All DARPA has to do is monitor the good ones. They get their info without having to man a website. I am not happy about this, but it answers the whiners who think it was a good idea. True privatization of government function. We know about this only because it depended on a public component. What slimy, disgusting plans are being hatched in secrecy by Poindexter and his band of maggots!

While the "whole *goal* of an idea market such as this" may be to "privatize (and marketize) the investigative process" this still fails to address the rather glaring flaw that if you are bullish on an event, this bullishness may then be used to alter the event.

Let's say I and many others are bullish on the assassination of Pakistan's president, Pervez Musharraf. Needless to say, with Pakistan's nuclear program, this would be a truly concerning outcome. Seeing this bullishness, the Defense Department would take all measures to prevent this assassination plot. But by preventing the assassination, all the "bullish" investors would lose their money.

So while the Futures Market on Terror helped the government to prevent this, the bullish investors would lose their investment. The more the United States succeeded on altering and preventing possible outcomes, the more the Futures Market on Terror would fail as a market, and the sooner it would collapse.

I like the idea. It's a smart use of economic knowledge.
The main point against it is that by purchasing a future, option or derivative the government will step in to prevent the event from occuring and thus the investor will lose by being right. This argument is specious. The wise investor will factor in gov. intervention and so will wager that the event will not happen vs. will happen as so many presume.

Entrepreneurs have already done it, and you can play at:
http://us.newsfutures.com/ with play money, or for real at www.tradesports.com

For this reason, the project was already out dated.

Besides, this line of research is not as far out as the Remote Viewing at Stanford Research Institute during the 70s. (Google Ed Dames and Ingo Swann)

Whether or not a futures market is a good way of predicting future events, a project like this should not be financed by taxpayer money. The money would be much better spent on fixing all the problems with the FBI and CIA.

To an MBA President, every problem must look like a market: schools, social security, air pollution, and now it seems, terror and chaos.

Going beyond the emotional reactions, I question the validity of the related data. Elections markets are engaged by registered voters, the Hollywood market has movie going enthusiasts as it's participants, and while the OJ futures pre-dict the weather, they actually post-dict the meteorological reports, and therfore do not truly predict anything. I'd be interested to see the success data of markets in which the participants are virtually unrelated to the questions (non-terrorists speculating on terrorism, etc...).

Frank has it right. There is something wrong with comparing the Hollywood Stock Exchange Foresight Exchange , and Iowa Electronic Markets, with DARPA's scheme. Thesw three markets are used to predict events that depend on mass activity. They are basically a survey of people who are intensley interested in such events and could be said to represent the masses that execute the events. This is fundamentally different from terrorist events which are planned and carried out by small groups who presumably would not be a large component of the market participants. Such a market would be useful in predicting IF there will be terrorist attacks and against whom but the sepcifics are very doubtful. I think that other methods of determining the likelihood of Anti American activity are well within the reach of traditional intelligence gathering.

Everyone, including DARPA, has missed the most important reason this "idea" would ultimately fail. If the point of this future's market is to gather intelligence about terrorist events, then the intelligence becomes exposed to the public. Once the enemy knows what you DO or DON'T know about their plans, they can act accordingly.

This idea of open intelligence exposes how warped and sheltered our best minds working on this problem truly are. It also communicates to the terrorists how far our Governement funded, in-the-box thinkers are from actually catching them.
Yikes.

We should expand the program to hospices and hospitals. There could be a wall devoted to showing the vitals of the dying. What fun it could be like a horse race. Or we could bet on who will get cancer since the WHO says we one in two will have cancer, we could bet on that. Doctors could use the speculations to decide who gets treatment.

I suggested its truly big idea.
, :)Great content to find another.