The reality factor continues to go SOUTH into WIERD AND INCREDIBLE.....or NON credible
Pentagon Prepares a Futures Market on Terror Attacks
July 29, 2003
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.
nytimes.com
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