A city of big ideas and tiny minds: Buchanan defends Poindexter's use of futures markets terrorism

WorldNetDaily.com ^ | Thursday, August 7, 2003 | Pat Buchanan

[WoofDog123]

"Wouldn't it be akin to people without access to meteorlogical data being better at predicting the weather than professional weathermen? "

This is not a comprehensive response, but some random thoughts...

Money (greed and fear) motivates and moves the market (whatever kind of market)...so having a tradeable market in war/terrorism risk would provide a venue for information from ALL OVER THE WORLD to be traded on, not just what fbi/dia/cia manage to put together. There would certainly be information leakage from the US intelligence agencies as well, which the market might price in more comprehensively than the beauracracies manage to do.

Suppose the KGB (or better yet, some red chinese intel)picks up info on some stuff that might be being planned....contacts in the market may know about this before the KGB has a chance to process and *consider* sharing the info with the US, since the source will undoubtably be paid. The market will reflect the new info before the americans have a prayer of finding out about it through channels.

From a domestic political view, this isn't going to happen, and the first time the market was right would cause all kinds of class-warfare recriminations, but I am not sure it is a bad idea, as far as its predictive value goes.

[ordinaryguy]

Insider trading, if my understanding is correct, is legal in the commodities futures markets.

I believe the Commodity Futures Modernization Act of 2000 put an end to that.

I should clarify myself, however, before someone else does. There is such a thing as legal insider trading. I was, of couse, simplisticly referring to the illegal variety. It seems more than absurd to imagine an active CIA operative filing for a trading window for purchasing terrorism futures against a specific target.

[Age of Reason]

Seems to me, if the terrorists realized such market fluctuations would put their targets on alert, then those terrorists would change their plans.

[xzins]

As I understand it, it was an opportunity for a mass of people in different settings to cast their vote for where terrorist activity might take place.

While I'm unsure if an exchange of money had been built into the design, I can think of other items of exchange such as points or simple prestige that could have been an incentive for reasoned participation.

If you imagine a college basketball poll at the beginning of a season, then you can imagine how INACCURATE such a "market" might be. (One reporter one vote. Perhaps in the "terror poll" it would be "one government office one vote.") At the same time, in the basketball poll, there's a clear ability to put likely winners in the upper levels of the poll.

I think it's an imaginative idea that was worth further tinkering and test marketing.

Imagine Army, Navy, AF, Marines, Coast Guard, Border Patrol, CIA, FBI, State Deptmt, Commerce, Air, Transportation, etc. down to sublevels each having a vote they can cast in the poll of "where the next terror act will occur."

There's no telling what kind of info someone from Commerce might bump into that would determine their vote. That info would accompany the vote as the rationale. Others would be able to read it and incorporate it into their analyses.

It seemed an interesting way to forecast as well as an interesting way to bring otherwise overlooked information to the discussion.

[eno_]

Hillary's gains are easy to explain. It's called a "straddle." (Ewwwwww, gross mental image.)

In a straddle, you make a bunch of trades. You sort the winning bets from the losers. You then write person A's name on the winning bets, and person B's name on the losing bets. They settle their accounts with the broker, and the result is person B gives person A $X without directly giving them the money.

In Hillary's case, the cattle futures windfal was almost certainly a bribe disguised using a straddle. Straddles are now illegal. They might not have been when Hillary benefited from one, but bribes and bribe-taking have always been illegal, no matter how you pass the money.