July 29, 2003


I'm having a hard time believing this isn't a hoax (since it's on the internet, it must be true), but apparently the geniuses in the Pentagon have decided to set up a futures market for terrorism.

Here's the $8 Million system in a nutshell:
"Traders" go online and buy futures in terrorist attacks (assignations, dirty bombs, chemicals, suicide bombers, etc...) for a fraction of a dollar, depending on the likelyhood of it taking place. If the event occurs, the shares go up to $1 each and the futures are sold for a nice little profit. I assume you will also be allowed to buy futures in terrorist attacks not occurring so they system will balance out.

Crazy, right? But the Pentagon provides this explanation:
futures trading had proven effective in predicting other events like oil prices, elections and movie ticket sales.

Now, I hate to be a pessimist, but movie ticket sales & elections are clearly influenced by those taking part in the future markets. This must mean that the Pentagon is truly expecting terrorists to use this system before carrying out an attack...

"The senators also suggested that terrorists could participate because the traders' identities will be unknown."

Now, I believe that terrorists are stupid, but are they really that stupid? Will they attempt to pick up their winnings in person? And even if the system truly was anonymous (and thusly could not be taxed), isn't this the equivalent of betting the US goverment that they can not stop your attack, even if you tell them about it?

Imagine the following scenario:
We have two U.S. cities, let's call them 'City A' and 'City B'. The market is extremely bullish that 'City A' will be attacked within the next month, but there is practically no market for an attack on 'City B'. The Pentagon receives information that both cities are possible targets. The Pentagon bets that 'City A' will not be attacked and that 'City B' will be, and then takes action to prevent 'City A' from being attacked while leaving 'City B' vulnerable. It will then be in position to collect a fortune in the market. Is this insider trading? Of course, we all know that the Pentagon always has the citizen's interests as it's top priority, so this is completely hypothetical...

Also, just noticed that Doc has a great post on this as well.

UPDATE: After reading my insightful post, the Pentagon has terminated the project. This should be taken as proof that the echelon of the U.S. Government is monitoring this blog closely. [12:16]  [ ]