You can now bet on terrorists and world calamities!
By maddy
According to sources from Washington the Associated Press today reported that the Pentagon is setting up an online stock-market style system or what some could call an online futures trading market. Interestingly what is traded here is not company stocks or commodities but conspiracy information, rumours in which anonymous speculators would bet on forecasting terrorist attacks, assassinations and coups and other 'Nostradamic events'. Hypothetical futures contracts in which investors could trade may range from the likelihood that Palestinian leader Yasser Arafat would be assassinated or Jordanian King Abdullah II would be overthrown, a nuclear missile attack by North Korea or a biological attack on Israel.

So how does this work? Firstly, traders would register would deposit money into an account similar to a stock account and win or lose money based on predicting events. Investors would buy and sell futures contracts -- essentially a series of predictions about what they believe might happen in the Middle East. Holders of a futures contract that came true would collect the proceeds of investors who predicted wrong. For instance 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. 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.

Defence officials hope to gain intelligence and useful predictions while investors who guessed right would win profits. Two Democratic senators demanded Monday the project be stopped before investors begin registering this week. 'The idea of a federal betting parlour on atrocities and terrorism is ridiculous and it's grotesque,' Senator. Ron Wyden, D-Ore., said.

Policy Analysis Market is the Pentagon office which currently oversees the program. The Policy Analysis Market would be a joint program of the Pentagon's Defence Advanced Research Projects Agency, known as DARPA, and two private companies: Net Exchange, a market technologies company, and The Economist Intelligence Unit, the information arm of The Economist magazine. It said there would be a re-evaluation before more money was committed.

Not surprisingly, the website has its share of critics. DARPA has received strong criticism from Congress for its Terrorism Information Awareness program, a computerized surveillance program that has raised privacy concerns. Wyden said the Policy Analysis Market is under retired Adm. John Poindexter, the head of the Terrorism Information Awareness program a key figure in the 1980's Iran-Contra scandal. 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 (news - web sites)'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 parlour 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?'

The Pentagon defends its venture as a new way of predicting events and part of its search for the 'broadest possible set of new ways to prevent terrorist attacks.' 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. It also added that 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 Defence 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.'

'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.

Critics like 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.

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