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Pentagon Lets You Bid on Terrorism?
Elysdir writes "DARPA is creating an idea futures market, the Policy Analysis Market, to try to predict events in the Middle East. See Bloomberg article for more info." Read this article. I mean it. This is amazing.
Update: 07/29 14:45 GMT by J : The
NYT story
claims "The White House also altered the Web site so that the potential events ... that were visible earlier in the day ... could no longer be seen," but those example images are still being served:
Jordanian overthrow,
bidding on assassinations,
cool graphics... Update: 07/29 16:44 GMT by M : Looks like the publicity was too much.
perhaps the /. paranoia bug has rubbed off me a bit too much, but what are the chances that your "bets" could be used against you in the war on terrorism?
you hit three or four correct terrorist acts and the next thing you know you're in an orange jumpsuit overlooking guantanamo bay.
Mike
You just nailed one of a major benefits of this system.
.
At the very least, this system would provide statisticians with a massive, currently relevant pool of opinions on the likelihood of any particular kind of terrorist attack occurring. The statisticians may not find anything, but honestly, for the price of running a single secure website, they're gathering an insane amount of valuable data.
That's at the very least. If it does just what it is intended to, and no more. At best . .
At best, it is a honeypot. If something major is in the works, like 9/11, what are the odds that someone, somewhere along the line wouldn't have placed some serious bets? Maybe not the terrorist himself, but what about his family? The people he stayed with in the US? Not everyone involved is going to be a Q'ran-thumping martyr. This scheme plays the self-interest of individual terrorists against the greater secrecy of terrorist proceedings, and it has the potential to be extremely revealing in that respect, simply as a massive, relatively cheap method of adding to ordinary intelligence information.
I mean, honestly, I know it sucks that they might tap your phone because of a $1,000 bet, but if you were just some guy exercising free speech, and proclaimed to the world that you would bet anyone $1,000 that there would be a major biological attack in Israel within the next week, and it got bandied about in a newspaper, your phone would be fuckin' tapped. Nothing happens, they intrude your life a little, and realize you're a crank or a nut or just a weirdo, and they leave you alone. It sucks, but at least this is something you can avoid and expect -- I mean, you do know who is running this thing, right?
Check out this site (german only, sorry). It describes a similar system, Wahlstreet, which was used to predict voter opinion during the 2002 Bundestag elections in Germany. People traded shares of the parties taking part in elections.
The idea of these types of markets is that stock trading does in fact give a really good image of people's opinion. After all, it is about YOUR money if you voice your opinion.
The results of the Wahlstreet project support this theory: The final poll results were consistent with the election results. In fact, Wahlstreet scored second place in a comparison of the difference between election and survey results of this and some other (conventional) survey institutions.
So here's my problem: If I invest and the government uses my "vote" that something will happen to prevent it from happening, I lose my money, because the event didn't occur.
If the event actually happens and I have predicted it, I get my phones tapped, a visit from the FBI, probable interrogation and possible imprisionment for having "terrorist ties." What exactly is the incentive for an investor to enter this market?
Head down, go to sleep to the rhythm of the war drums...
I'm only going to say this once, but I'm going to say it loudly.
You sure as fuck weren't watching the implied volatility and put/call ratios on airlines the week before 9/11.
If you don't know what that sentence means, you need to do some research. A lot more research. The story has since been picked up by conspiracy theorists, and the signal-to-noise ratio is pretty much nil. Dig back to September and October 2001, and read the financial press instead. You can find a lot of good starting points in the comments of this Slashdot article.
For the record, I believe (on circumstancial evidence - namely the rapidity with which the story was buried, leaving only conspiracy theorists to increase the noise-to-signal ratio,) that the SEC did the Right Thing - turned their conclusions over to other organizations who could ensure that the Right Thing (namely, outside of SEC jurisdiction) would eventually get done.
Also for the record, as I don't have a need to know, I can only hope that my speculation outlined above is correct. I do look forward to finding out when it's all declassified some decades hence. Gonna make for some damn interesting reading.