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More details - it seems the Nixon disgraced & convicted Chief of Staff, John Poindexter, is in charge of the Pentagon-sponsored 'terrorism betting-pool.' San Diego Union-Tribune http://tinyurl.com/ie93 July 29, 2003 A San Diego company is working with the Pentagon on a futures market that would allow anonymous speculators to bet on assassinations and terrorist attacks. The online market, which is set for a trial launch on Friday, is meant to help the government predict political and economic events in eight Middle East countries. Traders would buy contracts that would pay off if, for example, the Jordanian government were overthrown in the fourth quarter of 2004. Two senators who revealed the plan yesterday called it "wasteful" and "repugnant." "The American people want the federal government to use its resources enhancing our security, not gambling on it," said Sen. Ron Wyden, D-Ore. Hours after Wyden and Sen. Byron Dorgan, D-N.D., expressed outrage about the idea, the Pentagon said it would "continue to re-evaluate the technical promise of the program before committing additional funds beyond fiscal year 2003." The idea, called the Policy Analysis Market, is being developed by Net Exchange, a San Diego consulting firm that has created market systems for such companies as Sears, Roebuck and Co. The market will be managed by the Pentagon's Defense Advanced Research Projects Agency, known as DARPA. Charles Polk, president of Net Exchange, said it should be regarded as little more than an analytical tool. "It has a good chance of providing an interesting and independent source of information that policy analysts and policy makers can assess as they will," Polk said. "I don't think anybody will make any major winnings." In gathering information and pooling opinions, the market is billed as an alternative to committees, polls or experts' surveys. It would operate somewhat like the Chicago Mercantile Exchange, only instead of corn and beef, traders would place bets on variables such as the economic health of Turkey in the second quarter of 2004. The idea of using an online futures market to predict political events is not new. Professors at the University of Iowa have run an electronic futures market since 1988 that aims to predict the popular vote in presidential elections. Various Web sites, such as Tradesports.com, have used futures market-like mechanisms to enable people to bet on questions such as whether Saddam Hussein will be alive a month from now. Wyden explained it this way: "For instance, you may think early on that Prime Minister X is going to be assassinated, so you buy the futures contracts for five cents each. As more people begin to think the person's going to be assassinated, the cost of the contract could go up to 50 cents. "The payoff if he's assassinated is a dollar per future. So if it comes to pass, and those who bought at 5 cents make 95 cents. Those who bought at 50 cents make 50 cents." ** The senators also suggested that terrorists themselves could take part because the identities of the traders will be unknown. ** "This appears to encourage terrorists to participate, either to profit from their terrorist activities or to bet against them in order to mislead U.S. intelligence authorities." The Pentagon, in defending the program, said that such futures trading has proven effective in predicting events such as oil prices, elections and movie theater box office. "Research indicates that markets are extremely efficient, effective and timely aggregators of dispersed and even hidden information," said a Pentagon statement. "Futures markets have proven themselves to be good at predicting such things as election results; they are often better than expert opinions." Polk said his six-person company was one of a number of firms to bid on the project and was awarded a DARPA contract in summer 2001. Net Exchange first proposed a broader market that included more variables and a larger geographic area, Polk said, but revised its plan to focus on the Middle East after the Sept. 11 attacks. Net Exchange received an initial $100,000 for the project through DARPA's Small Business Innovation Research Program, Polk said, and has been awarded a $750,000 contract to complete the second phase. Traders can register for the Policy Analysis Market starting Friday, and trading will start two months later. The trial will at first be limited to 100 participants who will be credited $100 with which to trade. The trial is intended more to catch bugs in Net Exchange's system than it is to predict a rebel coup. A broader public launch is planned for January. Polk said traders will have to deposit between $200 and $1,000 and he suggested graduate students and think-tank researchers will be likely participants. The initiative has become the latest problem for DARPA, a Pentagon operation that has ran into controversy for the Terrorism Information Office, a sweeping electronic surveillance plan once described as a way of forestalling terrorism by tapping into computer databases to collect medical, travel and credit records as well as financial data. Worried about the reach of the electronic surveillance program, Congress earlier this year prohibited what was then called the Total Information Awareness program from being used against Americans. Its name was later changed to the Terrorism Information Awareness program. The senators who revealed the market program said it fell under the control of Adm. John M. Poindexter, a former top national security adviser under President Ronald Reagan. Poindexter was convicted of lying to Congress about weapons sales to Iran and illegal aid to Nicaraguan rebels, but the conviction was later reversed on the grounds that he had been given immunity for testimony in which he lied. The market's Web site says it will focus initially on the economic, civil, and military futures of Egypt, Jordan, Iran, Iraq, Israel, Saudi Arabia, Syria and Turkey and the impact of U.S. involvement with each. The value of the contracts will be based on data developed by the Economist Intelligence Unit, which is an arm of The Economist Group, which publishes the Economist magazine. Net Exchange was founded in San Diego in 1994 by a team of researchers from the California Institute of Technology. Polk received his Ph.D. from Caltech in 1993 and John Ledyard, the company's chairman and chief executive, is a professor of economics at the university and chairman of the Division of the Humanities and Social Sciences. Net Exchange generates about $1 million in revenue each year, Polk said, most of it coming from private sector contracts. Net Exchange also built the ACE Emissions market for trading emissions in the Los Angeles Basin, in addition to BondConnect, a system for trading bond portfolios. ----- Original Message ----- From: "Saibal Mitra" <smitra@zonnet.nl> Cc: <casi-discuss@lists.casi.org.uk> Sent: Tuesday, July 29, 2003 9:17 AM Subject: Re: [casi] "Invest in Mideast futures" It seems that a lot of money could be made by terrorists if this goes ahead. Quoting ppg <ppg@nyc.rr.com>: > Re: PAM > > London Times, July 29 > > Fury over bets on terror project > > The Pentagon is setting up a commodity market-style trading system in > which > investors would be able to bet on political and economic events in the > Middle East. This would include the likelihood of assassinations and > terrorist attacks. But two Democratic senators said they wanted the > project > stopped before investors began registering this week. > > > ----- Original Message ----- > From: "ppg" <ppg@nyc.rr.com> > To: <casi-discuss@lists.casi.org.uk> > Sent: Monday, July 28, 2003 10:51 PM > Subject: [casi] "Invest in Mideast futures" > > > > Look around this site- seems PAM is a sophisticated program for Mideast > war > profiteers.. > http://www.policyanalysismarket.org/pam_concept.htm > "Concept Overview > > Analysts often use prices from various markets as indicators of potential > events. The use of petroleum futures contract prices by analysts of the > Middle East is a classic example. The Policy Analysis Market (PAM) refines > this approach by trading futures contracts that deal with underlying > fundamentals of relevance to the Middle East. Initially, PAM will focus on > the economic, civil, and military futures of Egypt, Jordan, Iran, Iraq, > Israel, Saudi Arabia, Syria, and Turkey and the impact of U.S. involvement > with each. > > [Click here for a summary of PAM futures contracts] > > The contracts traded on PAM will be based on objective data and observable > events. These contracts will be valuable because traders who are > registered > with PAM will use their money to acquire contracts. A PAM trader who > believes that the price of a specific futures contract under-predicts the > future status of the issue on which it is based can attempt to profit from > his belief by buying the contract. The converse holds for a trader who > believes the price is an over-prediction - she can be a seller of the > contract. This price discovery process, with the prospect of profit and at > pain of loss, is at the core of a market's predictive power. > > The issues represented by PAM contracts may be interrelated; for example, > the economic health of a country may affect civil stability in the country > and the disposition of one country's military may affect the disposition > of > another country's military. The trading process at the heart of PAM allows > traders to structure combinations of futures contracts. Such combinations > represent predictions about interrelated issues that the trader has > knowledge of and thus may be able to make money on through PAM. Trading > these trader-structured derivatives results in a substantial refinement in > predictive power. ... > ... Trader registration will open on August 1, 2003..." > > Surf the site. > (Remember the 'South Sea Bubble'?) > > > Read the MSNBC news story: > http://www.msnbc.com/news/945269.asp?0sl=-22 > Can a 'terror futures market' work? > Defense Dept. project aims to let 'investors' bet on events > > > > > > > > > > > > > _______________________________________________ > Sent via the discussion list of the Campaign Against Sanctions on Iraq. > To unsubscribe, visit > http://lists.casi.org.uk/mailman/listinfo/casi-discuss > To contact the list manager, email casi-discuss- admin@lists.casi.org.uk > All postings are archived on CASI's website: http://www.casi.org.uk > > > _______________________________________________ > Sent via the discussion list of the Campaign Against Sanctions on Iraq. > To unsubscribe, visit > http://lists.casi.org.uk/mailman/listinfo/casi-discuss > To contact the list manager, email casi-discuss- admin@lists.casi.org.uk > All postings are archived on CASI's website: http://www.casi.org.uk > -- _____________________________________________________________________ 2x sneller ADSL met Zon Breedband Family. In combinatie met ZonTel nu voor maar 29 euro per maand. Bestel nu op www.zonnet.nl/breedband Bovendien met gratis modem en geen aansluitkosten! _______________________________________________ Sent via the discussion list of the Campaign Against Sanctions on Iraq. To unsubscribe, visit http://lists.casi.org.uk/mailman/listinfo/casi-discuss To contact the list manager, email casi-discuss-admin@lists.casi.org.uk All postings are archived on CASI's website: http://www.casi.org.uk _______________________________________________ Sent via the discussion list of the Campaign Against Sanctions on Iraq. To unsubscribe, visit http://lists.casi.org.uk/mailman/listinfo/casi-discuss To contact the list manager, email casi-discuss-admin@lists.casi.org.uk All postings are archived on CASI's website: http://www.casi.org.uk