Defense Dept. taking bets

[CaptainBubba]

http://www.thewbalchannel.com/news/2363276/detail.html

Defense Dept. Program Taking Terror Bets
Program Models 'Futures' Markets

POSTED: 3:20 p.m. EDT July 28, 2003

A new Department of Defense program allows traders to bet on the likelihood of future terrorist attacks.

The department's "Defense Advanced Research Project Agency" designed what it calls the "The Policy Analysis Market."


BETTING ON TERROR
Policy Analysis Market
How To Fight Terror?
Would You Bet On Terror Attacks?


The program works much like the financial markets where traders buy and sell "futures" based on the possibility of a specific event in the Middle East, 11 News reported.


Some of the examples listed on the agency's Web site include the assassination of Palestinian leader Yassar Arafat and a missile attack by North Korea. Bidders would profit if the events for which they hold futures occur.

Defense officials said the market-based system is highly accurate when assessing such things as political and civil stability, economic health and military disposition of Middle East countries.

Participants would only have to pick a username and password to participate and the agency said it won't have access to their identities or funds.

But critics said this allows terrorists who are planning an attack to profit on the assault or even make false bets to mislead authorities.

Members of Congress said the market idea is not only wasteful, but repugnant.

"I think this is unbelievably stupid. That is a gentle thing to say about a program that is so devoid of value," Sen. Byron Dorgan, D-North Dakota, said. "It combines the worst of all our values in my judgment. It's a tragic waste of taxpayer money. It will be totally offensive to almost everyone."

"[The] idea of a federal betting parlor on atrocities and terrorism is ridicules and grotesque," Sen. Ron Wyden, D-Oregon, said. "The bizarre plan we are describing today is a waste of taxpayer money and it needs to stop immediately. The program's intent is clear: the federal government is encouraging people to bet on and make money from atrocities and terrorist attacks."

Registration for the site begins Friday and will be limited to the first 1,000 traders. Actual trading will begin Sept. 1 and the Department of Defense plans to open the site to 10,000 traders by Jan. 1, 2004.

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Wow.

[Jeanette X]

What if terrorist sympathisers who know when attacks will happen bet?

[The One and Only...]

What if terrorist sympathisers who know when attacks will happen bet?

Probably nothing, since you won't know that they were terrorist sympathisers. I also imagine there is a cap to the amount you can bid.

This sounds like it is horribly wrong, but yet something positive at the same time... SO. MUCH. CONFUSION.

[Big Papa Goat]

I bet there are some sick bastards who would bet on a date and then commit a terrorist act on that date just to make money. This entire idea is repugnant.

[Zhukov]

What if terrorist sympathisers who know when attacks will happen bet?


Obviously this would be unfair play. It's like football players betting on their own game - it should not be tolerated. I am sure that there will be rules and guidelines exempting terrorists or those in the know from taking part.

Someone should start a bet on when terrorist attacks wont happen. That way it's not repugnant.

[mburbank]

Here's a somewhat more detailed article from the NYT.


Pentagon Prepares a Futures Market on Terror Attacks
By CARL HULSE

WASHINGTON, July 28 — The Pentagon office that proposed spying electronically on Americans to monitor potential terrorists has a new experiment. It is an online futures trading market, disclosed today by critics, in which anonymous speculators would bet on forecasting terrorist attacks, assassinations and coups.

Traders bullish on a biological attack on Israel or bearish on the chances of a North Korean missile strike would have the opportunity to bet on the likelihood of such events on a new Internet site established by the Defense Advanced Research Projects Agency.

The Pentagon called its latest idea a new way of predicting events and part of its search for the "broadest possible set of new ways to prevent terrorist attacks." Two Democratic senators who reported the plan called it morally repugnant and grotesque. The senators said the program fell under the control of Adm. John M. Poindexter, President Ronald Reagan's national security adviser.

One of the two senators, Byron L. Dorgan of North Dakota, said the idea seemed so preposterous that he had trouble persuading people it was not a hoax. "Can you imagine," Mr. Dorgan asked, "if another country set up a betting parlor so that people could go in — and is sponsored by the government itself — people could go in and bet on the assassination of an American political figure?"

After Mr. Dorgan and his fellow critic, Ron Wyden of Oregon, spoke out, the Pentagon sought to play down the importance of a program for which the Bush administration has sought $8 million through 2005. The White House also altered the Web site so that the potential events to be considered by the market that were visible earlier in the day at www.policyanalysismarket.org could no longer be seen.

But by that time, Republican officials in the Senate were privately shaking their heads over the planned trading. One top aide said he hoped that the Pentagon had a good explanation for it.

The Pentagon, in defending the program, said such futures trading had proven effective in predicting other events like oil prices, elections and movie ticket sales.

"Research indicates that markets are extremely efficient, effective and timely aggregators of dispersed and even hidden information," the Defense Department said in a statement. "Futures markets have proven themselves to be good at predicting such things as elections results; they are often better than expert opinions."

According to descriptions given to Congress, available at the Web site and provided by the two senators, traders who register would deposit money into an account similar to a stock account and win or lose money based on predicting events.

"For instance," Mr. Wyden said, "you may think early on that Prime Minister X is going to be assassinated. So you buy the futures contracts for 5 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 $1 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 could participate because the traders' identities 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," they said in a letter to Admiral Poindexter, the director of the Terrorism Information Awareness Office, which the opponents said had developed the idea.

The initiative, called the Policy Analysis Market, is to begin registering up to 1,000 traders on Friday. It is the latest problem for the advanced projects agency, or Darpa, a Pentagon unit that has run into controversy for the Terrorism Information Office. Admiral Poindexter once described a sweeping electronic surveillance plan as a way of forestalling terrorism by tapping into computer databases to collect medical, travel, credit and financial records.

Worried about the reach of the program, Congress this year prohibited what was called the Total Information Awareness program from being used against Americans. Its name was changed to the Terrorism Information Awareness program.

This month, the Senate agreed to block all spending on the program. The House did not. Mr. Wyden said he hoped that the new disclosure about the trading program would be the death blow for Admiral Poindexter's plan.

The Pentagon did not provide details of the program like how much money participants would have to deposit in accounts. Trading is to begin on Oct. 1, with the number of participants initially limited to 1,000 and possibly expanding to 10,000 by Jan. 1.

"Involvement in this group prediction process should prove engaging and may prove profitable," the Web site said.

The overview of the plan said the market would focus on the economic, civil and military futures of Egypt, Jordan, Iran, Iraq, Israel, Saudi Arabia, Syria and Turkey and the consequences of United States involvement with those nations. The creators of the market envision other trappings of existing markets like derivatives.

In a statement, Darpa said the trading idea was "currently a small research program that faces a number of major technical challenges and uncertainties."

"Chief among these," the agency said, "are: Can the market survive and will people continue to participate when U.S. authorities use it to prevent terrorist attacks? Can futures markets be manipulated by adversaries?"

Mr. Dorgan and Mr. Wyden called for an immediate end to the project and said they would use its existence to justify cutting off financial support for the overall effort. In the letter to Admiral Poindexter, they called the initiative a "wasteful and absurd" use of tax dollars.

"The American people want the federal government to use its resources enhancing our security, not gambling on it," the letter said.



This is the kind of creative thinking you get when you give a convicted felon like Poindexter a Pentagon agency to play with.