# MENA Futures: DoD et al open futures markets on political & econ developments **URL:** \ **Category:** Great Debates\ **Created:** [July 29, 2003, 8:13am UTC](https://boards.straightdope.com/t/mena-futures-dod-et-al-open-futures-markets-on-political-econ-developments/191610 "2003-07-29T08:13:20Z")\ **Posts on this page:** 20\ **Page:** 2
**Author:** ![system](https://global.discourse-cdn.com/straightdope/original/2X/e/e489c3b7d8fce19c4b355dd4fc3f88cc39c34b87.png) [@system](https://boards.straightdope.com/u/system)\ **Post date:** [July 29, 2003, 3:12pm UTC](https://boards.straightdope.com/t/mena-futures-dod-et-al-open-futures-markets-on-political-econ-developments/191610/21 "2003-07-29T15:12:06Z")
Interesting that reference. I suspect a greater insight and utility comes not from one off individual events, but on futures on more complex, less crisis driven topics - and with a skew to expertise it might have more interesting results. ---
**Author:** ![Spoke](https://avatars.discourse-cdn.com/v4/letter/s/a88e57/32.png) [@Spoke](https://boards.straightdope.com/u/Spoke)\ **Post date:** [July 29, 2003, 3:16pm UTC](https://boards.straightdope.com/t/mena-futures-dod-et-al-open-futures-markets-on-political-econ-developments/191610/22 "2003-07-29T15:16:21Z")
What of the danger of self-fulfilling prophecy? Let’s say I’ve got a lot of money riding on a particular nasty event happening. What’s to prevent me from using my resources and contacts to…help things along? (Insider trading of a very ugly sort.) Could this market actually _give impetus_ to terrorist acts? Even if (in my scenario) authorities see a spike in the market and defeat the threat, they are using resources to battle a problem the market itself may have created. Perhaps I am missing something. If so, enlighten me. ---
**Author:** ![An\_Arky](https://avatars.discourse-cdn.com/v4/letter/a/87869e/32.png) [@An\_Arky](https://boards.straightdope.com/u/An_Arky)\ **Post date:** [July 29, 2003, 3:28pm UTC](https://boards.straightdope.com/t/mena-futures-dod-et-al-open-futures-markets-on-political-econ-developments/191610/23 "2003-07-29T15:28:00Z")
I haven’t read much about it, so I’m kind of shooting from the hip here, but I think that this is a red herring. I have no idea what for, though. ---
**Author:** ![David\_Simmons](https://avatars.discourse-cdn.com/v4/letter/d/9de053/32.png) [@David\_Simmons](https://boards.straightdope.com/u/David_Simmons)\ **Post date:** [July 29, 2003, 3:34pm UTC](https://boards.straightdope.com/t/mena-futures-dod-et-al-open-futures-markets-on-political-econ-developments/191610/24 "2003-07-29T15:34:42Z")
I don’t know about this. In theory futures trading in commodities tends to stabilize the production of them. That is, when futures prices begin to rise, producers increase production which they sell in advance on the futures market and vice versa when futures are low. It doesn’t always work but it seems to help. Where are the producers in this “futures” market? ---
**Author:** ![sailor](https://avatars.discourse-cdn.com/v4/letter/s/a587f6/32.png) [@sailor](https://boards.straightdope.com/u/sailor)\ **Post date:** [July 29, 2003, 3:48pm UTC](https://boards.straightdope.com/t/mena-futures-dod-et-al-open-futures-markets-on-political-econ-developments/191610/25 "2003-07-29T15:48:03Z")
I only read this article but this sounds like the stupidest idea yet from this Administration. Their are outdoing themselves every day. > [@](#): > > [http://www.cnn.com/2003/US/07/29/terrorist.market.ap/index.html](http://www.cnn.com/2003/US/07/29/terrorist.market.ap/index.html) > > Market called ‘unbelievably stupid’ > > The Pentagon views it as a potentially innovative way to get clues about terrorists’ plans: a public, stock market-style exchange where traders can profit by correctly predicting terror attacks or assassinations in the Middle East. But two Democratic senators say the program is useless, offensive and immoral. They are demanding that the program be stopped before investors start signing up Friday. > > “The idea of a federal betting parlor on atrocities and terrorism is ridiculous and it’s grotesque,” Sen. Ron Wyden, an Oregon Democrat, said Monday. > … > Traders would buy and sell futures contracts – just like energy traders do now in betting on the future price of oil. But the contracts in this case would be based on what might happen in the Middle East in terms of economics, civil and military affairs or specific events, such as terrorist attacks. Holders of a futures contract that came true would collect the proceeds of traders who put money into the market but predicted wrong. > > A graphic on the market’s Web page Monday 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 Middle East market, the graphic also included the possibility of a North Korea missile attack. > > That graphic apparently was removed from the Web site hours after the news conference in which Wyden and fellow Democratic Sen. Byron Dorgan of North Dakota criticized the market. > > Dorgan described the market as “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. Unbelievably stupid sums it up for me pretty nicely. ---
**Author:** ![erislover](https://avatars.discourse-cdn.com/v4/letter/e/71e660/32.png) [@erislover](https://boards.straightdope.com/u/erislover)\ **Post date:** [July 29, 2003, 3:51pm UTC](https://boards.straightdope.com/t/mena-futures-dod-et-al-open-futures-markets-on-political-econ-developments/191610/26 "2003-07-29T15:51:45Z")
> [@](#): > > \*Originally posted by spoke- \* > Could this market actually _give impetus_ to terrorist acts? > > Even if (in my scenario) authorities see a spike in the market and defeat the threat, they are using resources to battle a problem the market itself may have created. Perhaps, but note that when it gets to be such a point, the impetus behind the government to investigate will be large, which in turn would (as I understand it) cause the prices of the futures to drop since the probability of it happening starts to decrease. Because aggressive agencies can respond to the, shall we say, bubble, that might be just the element necessary to stop a bubble from popping in the worst way. ---
**Author:** ![hawthorne](https://avatars.discourse-cdn.com/v4/letter/h/c89c15/32.png) [@hawthorne](https://boards.straightdope.com/u/hawthorne)\ **Post date:** [July 29, 2003, 3:58pm UTC](https://boards.straightdope.com/t/mena-futures-dod-et-al-open-futures-markets-on-political-econ-developments/191610/27 "2003-07-29T15:58:09Z")
I know I should know this stuff, but I don’t: isn’t this a contingent market, not a futures market? ---
**Author:** ![AHunter3](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/ahunter3/32/368_2.png) [@AHunter3](https://boards.straightdope.com/u/AHunter3)\ **Post date:** [July 29, 2003, 3:58pm UTC](https://boards.straightdope.com/t/mena-futures-dod-et-al-open-futures-markets-on-political-econ-developments/191610/28 "2003-07-29T15:58:34Z")
If memory serves me correctly, there is at least a small but internationally distributed contingent that suspects that US Defense and other elements of the Administration were aware of the likelihood of the 9/11 attacks and that preventing them wasn’t high on their priority list. I would not think that playing “Gamesters of Triskellion” demonstrates the sophisticated handling of international concerns and awareness of appearances that… ::considers prior behavior of current administration:: Oh never mind. ---
**Author:** ![RTFirefly](https://avatars.discourse-cdn.com/v4/letter/r/c77e96/32.png) [@RTFirefly](https://boards.straightdope.com/u/RTFirefly)\ **Post date:** [July 29, 2003, 3:59pm UTC](https://boards.straightdope.com/t/mena-futures-dod-et-al-open-futures-markets-on-political-econ-developments/191610/29 "2003-07-29T15:59:08Z")
> [@](#): > > \*Originally posted by Collounsbury \* > **Well, in those ugly terms, yes it’s bad politics, which is why certain more lurid contracts will have to be off limits – e.g. futures on individuals’ lives has a whole slew of issues, including certain… moral hazard issues.** From the Washington Post story: > [@](#): > > 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 would be overthrown. It goes on to say that that graphic was apparently removed from the Web site within a few hours after Sens. Wyden and Dorgan had their news conference. But apparently Poindexter & Co. were actively entertaining the prospect of having such “lurid contracts” in play. My main reaction to this is just the incredibly mindboggling _stupidity_, in foreign policy terms, of these people being willing to run a gambling parlor _under the U.S. government imprimatur_ in which such bets could be placed. I bet a lot of U.S. ambassadors across the Middle East are going to be called in over the next day or so and asked to explain WTF the U.S. government is thinking here. I think there is information to be gained from such a market, once, ummm, _personalized_ outcomes are defined as out of bounds for trading, or similarly, outcomes specifically involving bloodshed (think of how families of US military would react to a betting line on how many soldiers get killed in Iraq in a given time period _:eek:_), but boy howdy, did these guys ever put their foot in it. And Tom DeLay says the _Democrats_ lack seriousness on foreign policy? Sheesh. ---
**Author:** ![pantom](https://avatars.discourse-cdn.com/v4/letter/p/34f0e0/32.png) [@pantom](https://boards.straightdope.com/u/pantom)\ **Post date:** [July 29, 2003, 4:00pm UTC](https://boards.straightdope.com/t/mena-futures-dod-et-al-open-futures-markets-on-political-econ-developments/191610/30 "2003-07-29T16:00:25Z")
The real world already has some of this, in the form of trading in gold and in U.S. Treasuries, both of which have a safe haven element attached to them. It’s what traders run to when things look uncertain/bad. Interestingly, gold bottomed in late winter 2001, or a little more than half a year before 9/11. As Yogi Berra once said, you can see a lot by looking. Chart attached (artificially constructed for illustration, don’t try trading off this chart): > **[$GOLD - Gold - Continuous Contract (EOD)](https://stockcharts.com/freecharts/pnf.php?chart=%24GOLD,PLPA%5BPA%5D%5BDD%5D%5BF%217%210.5%21%5D&pref=G)** > > Daily Point & Figure Chart So the issue of whether people are profiting from disaster is moot. Some already do, whether by accident or design. That’s life. DARPA has an excellent idea here, because when people have real money on the line, they start getting good at making predictions. There could be a lot of useful info in the trading patterns. ---
**Author:** ![pantom](https://avatars.discourse-cdn.com/v4/letter/p/34f0e0/32.png) [@pantom](https://boards.straightdope.com/u/pantom)\ **Post date:** [July 29, 2003, 4:03pm UTC](https://boards.straightdope.com/t/mena-futures-dod-et-al-open-futures-markets-on-political-econ-developments/191610/31 "2003-07-29T16:03:25Z")
Hmm, can’t seem to edit that link to get it to work. If interested, cutting & pasting into the browser address line will have to do for now. ---
**Author:** ![RTFirefly](https://avatars.discourse-cdn.com/v4/letter/r/c77e96/32.png) [@RTFirefly](https://boards.straightdope.com/u/RTFirefly)\ **Post date:** [July 29, 2003, 4:12pm UTC](https://boards.straightdope.com/t/mena-futures-dod-et-al-open-futures-markets-on-political-econ-developments/191610/32 "2003-07-29T16:12:36Z")
They’ve [cancelled the terrorism futures market](http://story.news.yahoo.com/news?tmpl=story&cid=542&e=2&u=/ap/terror_market). ---
**Author:** ![KidCharlemagne](https://avatars.discourse-cdn.com/v4/letter/k/ed8c4c/32.png) [@KidCharlemagne](https://boards.straightdope.com/u/KidCharlemagne)\ **Post date:** [July 29, 2003, 4:12pm UTC](https://boards.straightdope.com/t/mena-futures-dod-et-al-open-futures-markets-on-political-econ-developments/191610/33 "2003-07-29T16:12:44Z")
Retired futures trader and long time marketmaker in futures-style betting here: Leave it to the academicians to fuck up the practical application of everything. First off, it won’t provide the intelligence community with anything they don’t already know unless a terrorist is sufficiently stupid to bet on one of his own acts. Even in this case, the liquidity of the market would have to be deep enough to allow for a bet large enough to make it worth even taking the risk. The trader structured contracts idea is a disaster. There’s a reason that futures contracts are standardized and that’s so people don’t argue over the meaning of the terms. The contracts on their “indices” are fine but are also much less specific in exactly what they’re prediciting. One of the futures contracts they speak of is “Will the current Iraqi regime be in power at such and such a date?” - you need to define this in so many ways to make it bettable. What do you mean specifically by “regime?” What do you mean specifically by “in power?” The predicitive power of futures prices are dependent upon those with the best information participating in the pricing. This won’t be the case here. ---
**Author:** ![Spoke](https://avatars.discourse-cdn.com/v4/letter/s/a88e57/32.png) [@Spoke](https://boards.straightdope.com/u/Spoke)\ **Post date:** [July 29, 2003, 4:13pm UTC](https://boards.straightdope.com/t/mena-futures-dod-et-al-open-futures-markets-on-political-econ-developments/191610/34 "2003-07-29T16:13:21Z")
> [@](#): > > \*Originally posted by erislover \* > \*\*Perhaps, but note that when it gets to be such a point, the impetus behind the government to investigate will be large, which in turn would (as I understand it) cause the prices of the futures to drop since the probability of it happening starts to decrease. > > Because aggressive agencies can respond to the, shall we say, bubble, that might be just the element necessary to stop a bubble from popping in the worst way. \*\* Yes, but you’re missing the point: The agencies would be responding to a terrorist event _which the market itself created_. Remember the Chicago Black Sox. Now imagine how much worse market manipulation in the context of terrorism futures might be… ---
**Author:** ![Beryl\_Mooncalf\_1](https://avatars.discourse-cdn.com/v4/letter/b/9f8e36/32.png) [@Beryl\_Mooncalf\_1](https://boards.straightdope.com/u/Beryl_Mooncalf_1)\ **Post date:** [July 29, 2003, 4:19pm UTC](https://boards.straightdope.com/t/mena-futures-dod-et-al-open-futures-markets-on-political-econ-developments/191610/35 "2003-07-29T16:19:14Z")
Thanks December, for helping with Bayes. Pre-investors… Looking at the scheme, doesn’t it fail, as a viable investment, for the following reason. All Investment could be factored into information that relates to the probability of any event occirring. That is after all, what they are looking for -another means of predicting events. Would this be true then. -The more probable events (most investment activity) would generate higher interest. The higher interests would generate higher probabilitie scores for those events - which would generate more scrutiny, and if appropriate, - result in refocusing assets to prevent or reduce the probability of the event occurring. Isn’t this like betting on a race horse, but -not knowing that the horse is having 10 pounds of additional weight added to its back, each time a bet is cast on it? More bets would act to decrease the probability of the event? Bad Medicine? ---
**Author:** ![jjimm](https://avatars.discourse-cdn.com/v4/letter/j/ba8739/32.png) [@jjimm](https://boards.straightdope.com/u/jjimm)\ **Post date:** [July 29, 2003, 4:21pm UTC](https://boards.straightdope.com/t/mena-futures-dod-et-al-open-futures-markets-on-political-econ-developments/191610/36 "2003-07-29T16:21:43Z")
Ah well - it’s been [spiked](http://foxnews.com/story/0,2933,93190,00.html) anyway. ---
**Author:** ![jjimm](https://avatars.discourse-cdn.com/v4/letter/j/ba8739/32.png) [@jjimm](https://boards.straightdope.com/u/jjimm)\ **Post date:** [July 29, 2003, 4:24pm UTC](https://boards.straightdope.com/t/mena-futures-dod-et-al-open-futures-markets-on-political-econ-developments/191610/37 "2003-07-29T16:24:08Z")
Oops, didn’t see **RTFirefly’s** post. ---
**Author:** ![London\_Calling](https://avatars.discourse-cdn.com/v4/letter/l/49beb7/32.png) [@London\_Calling](https://boards.straightdope.com/u/London_Calling)\ **Post date:** [July 29, 2003, 4:28pm UTC](https://boards.straightdope.com/t/mena-futures-dod-et-al-open-futures-markets-on-political-econ-developments/191610/38 "2003-07-29T16:28:47Z")
I know it’s all (see above) off but wasn’t it oft-said, that OBL and the crew made a fortune on the markets post- 9/11 ? I never did follow that story much … . . .? ---
**Author:** ![jjimm](https://avatars.discourse-cdn.com/v4/letter/j/ba8739/32.png) [@jjimm](https://boards.straightdope.com/u/jjimm)\ **Post date:** [July 29, 2003, 4:40pm UTC](https://boards.straightdope.com/t/mena-futures-dod-et-al-open-futures-markets-on-political-econ-developments/191610/39 "2003-07-29T16:40:54Z")
IIRC, there were considerable unusual trades happening, which included selling short on airline stocks in the week(s) before the attacks, that were “being investigated”. I’ve heard nothing about this since. ---
**Author:** ![pantom](https://avatars.discourse-cdn.com/v4/letter/p/34f0e0/32.png) [@pantom](https://boards.straightdope.com/u/pantom)\ **Post date:** [July 29, 2003, 4:42pm UTC](https://boards.straightdope.com/t/mena-futures-dod-et-al-open-futures-markets-on-political-econ-developments/191610/40 "2003-07-29T16:42:33Z")
It’s probably laid out in the missing 28 pages of the 9/11 report. [Previous page](https://boards.straightdope.com/t/mena-futures-dod-et-al-open-futures-markets-on-political-econ-developments/191610.md?page=1) [Next page](https://boards.straightdope.com/t/mena-futures-dod-et-al-open-futures-markets-on-political-econ-developments/191610.md?page=3)