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

[JohnHuang2]

Thursday, August 7, 2003

Quote of the Day by Arthur Wildfire! March

[Numbers Guy]

Perhaps it's because of Buchanan's rep as a paleo that I find this column a bit surprising. He's right on target. Markets reflect information, and that information can be highly useful.

[.cnI redruM]

This has to be the first time in years PJB has been in favor of anything being traded freely.

[Camerican]

There is one major flaw in the DARPA futures market for terrorism. Speculators on how weather patterns will affect wheat or soy bean crops HAVE NO CONTROL OVER THE WEATHER. Ergo, the best they can do is speculate and form some sort of majority consensus.

With a terrorism futures market, it would not be that hard for misguided individuals - whether Islamic fanatics, other political militants or just plain greedy and underhanded ba$tards (yes, even potential beltway members) to manipulate the actual events on which the futures market speculates. Don't like how reality is meeting with your speculative predictions? Just go plant a car bomb at the Empire State Building. Voila. This is the reason that the terrorism futures market is so flawed as a concept.

[ordinaryguy]

Suppose all the anti-terror experts at CIA, Pentagon, NSA and State, active and retired, had been in a betting pool

Is Pat suggesting that active officials would be allowed to participate in this sort of gambling?

Not only could that be an excellent example of the whole loose lips thing, but it seems to me that they would be engaging in insider trading. Insider trading makes for lousy markets, which is why it is outlawed on the US securities exchanges.

[Eric in the Ozarks]

You just nailed it.
The terror stock market or what ever they wanted to call it was a stupid, senseless idea.

[Dr Warmoose]

...to manipulate the actual events on which the futures market speculates....This is the reason that the terrorism futures market is so flawed as a concept.

I highly doubt this. The FBI would have the names, bank accounts and addresses of the "winners".

Here is where you should spend your focus: FBI agents and analyists don't make that much money, and their money is not contingent on being correct, it is a matter of just showing up for work until retirement. Where the money is made is in the speculation. Let's say that an FBI agent, with all of their resources had a good feel to where the action might be, to simply report to his superiors might result in an "Atta-Boy", and that is pretty much it. So there is no real incentive, other than work ethic and partriotism (which we have no guarentee). But how about if that information slipped to a speculator? How much would that information be worth? Now we have security leaks within the FBI as more and more high level agents with many people under them turning in good information, passes this stuff to the highest private bidder - who may or may not be a friend of this country. IOW, we have institutionalized espionage.

Also look at this problem. You have a new garden industry of anaylsts who are speculating on the next terrorist strike. How does one do that? By collecting as much information on national weak-points and critical services. Some of the best and brightest minds in this nation will be spending their productive hours deliberately seeking the best bridge to blow up, the best electrical facility to dismantle, the best pipeline to sever. They will calculate how easy and how low-tech a terrorist would have to be, and they would be constructing all sorts of scripts on how to systematically destroy this nation. Before any money is placed on a terrorist future, there would be a priceless wealth of information exploiting the most vulnerable strike-points in this nation, complete with data on how bad the damage would be. This information would be priceless to terrorists, and could be delivered to them on a DVD.

Scared yet?

[steve-b]

There is one major flaw in the DARPA futures market for terrorism. Speculators on how weather patterns will affect wheat or soy bean crops HAVE NO CONTROL OVER THE WEATHER. Ergo, the best they can do is speculate and form some sort of majority consensus.
With a terrorism futures market, it would not be that hard for misguided individuals - whether Islamic fanatics, other political militants or just plain greedy and underhanded ba$tards (yes, even potential beltway members) to manipulate the actual events on which the futures market speculates.

No more calls; we have a winner.

[steve-b]

The FBI would have the names, bank accounts and addresses of the "winners".

Guess wrong, lose your money. Guess correctly, and be investigated by the FBI.

Gee, I just can't wait to get in on the ground floor....

[xzins]

It's been a while since Pat's been right about anything, what with his tirades against people groups, but he's right about this one.

Poindexter had a new idea. The politicians were small minded.

Poindexter, a genius...of the hard-working variety, should have been left to his tinkering.

[Dr Warmoose]

Guess wrong, lose your money. Guess correctly, and be investigated by the FBI.

And here is the best part. Because of the [un]Patriot Act, the FBI can ransack your house, your business, loot the data from your computer (all of it, including personal stuff you don't want people to see), tap your phones, read your mail and God only knows what else - without ever having any legal obligation to tell you that they have you under surveillance. Now they have your database of information and contacts and no longer need you. In fact they don't want to actually have to pay you for the tip, so it will be in their best interests, both professionally (in that an amatuer showed up the pros) and economically (that payoff could underwrite a training junket in the Carribean). With all of this information, they can haul you off to Gitmo and suspend habeas-corpus, deny you legal assistance and trump up a case of you being a dangerous terrorist, without ever giving you time, your money, or legal counsel to form a defense.

[steve-b]

True, the cheap moral posturing and piling-on was distasteful. Worse, it was damaging in that it reinforces the bureaucratic tendency to avoid rocking the boat lest you be singled out as the next target.

It was a bad idea that should have been shot down on its real flaws (see several posts on this thread) rather than simply hooted down by grandstanding politicians.

[eno_]

Yeah, but playing this market would be fun anyway.

I've ripped Poindexter over TIA, and he deserves it. But this futures market is not invasive or coercive. It is entirely voluntary. And it is known to be an effective technique for sythesizing individual knowledge into a whole.

I have strong complaints about a lot of what the government does. I have no complaints about the Terror Market.

[WoofDog123]

"There is one major flaw in the DARPA futures market for terrorism. Speculators on how weather patterns will affect wheat or soy bean crops HAVE NO CONTROL OVER THE WEATHER. Ergo, the best they can do is speculate and form some sort of majority consensus. "

How about the crude oil futures markets? Insiders there certainly do have influence over the future price of the commodity.

[WoofDog123]

"Not only could that be an excellent example of the whole loose lips thing, but it seems to me that they would be engaging in insider trading. Insider trading makes for lousy markets, which is why it is outlawed on the US securities exchanges."

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

It is illegal in the equity-based markets (i.e. stocks, stock options, stock futures), and I am not sure about the treasury markets (I assume it is illegal).

[WoofDog123]

"Ah, that explains why Hillary turned 1000 dollars in chicken futures into of 1,000 dollars per dollar invested"

The irony of the cattle-futures payoff is that the party paying the bribe most likely received a tax-deductible loss.

[Age of Reason]

I don't understand why this could be such a good idea:

How can this "market" be more accurate than the predictions of government people who would be privy to the latest secret intelligence on terrroist activity?

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

can anyone elighten me?

[Age of Reason]

It's been a while since Pat's been right about anything

From what I've heard of Pat, he's been more right about more things than any other public figure.

[Age of Reason]

he's right about this one

Despite our inverse appreciation of Pat's ideas, please see my post number 18, above, then please enlighten me as to why this terror futures market might be a good predictor.

(I'm not being sarcastic--I really want to understand what I am misssing about the thinking behind it).