[MicroBalrog]

http://www.thewbalchannel.com/news/2363276/detail.html

Defense Dept. Program Taking Terror Bets
Program Models 'Futures' Markets

POSTED: 3:20 p.m. EDT July 28, 2003

A new Department of Defense program allows traders to bet on the likelihood of future terrorist attacks.

The department's "Defense Advanced Research Project Agency" designed what it calls the "The Policy Analysis Market."




The program works much like the financial markets where traders buy and sell "futures" based on the possibility of a specific event in the Middle East, 11 News reported.


Some of the examples listed on the agency's Web site include the assassination of Palestinian leader Yassar Arafat and a missile attack by North Korea. Bidders would profit if the events for which they hold futures occur.

Defense officials said the market-based system is highly accurate when assessing such things as political and civil stability, economic health and military disposition of Middle East countries.

Participants would only have to pick a username and password to participate and the agency said it won't have access to their identities or funds.

But critics said this allows terrorists who are planning an attack to profit on the assault or even make false bets to mislead authorities.

Members of Congress said the market idea is not only wasteful, but repugnant.

"I think this is unbelievably stupid. That is a gentle thing to say about a program that is so devoid of value," Sen. Byron Dorgan, D-North Dakota, said. "It combines the worst of all our values in my judgment. It's a tragic waste of taxpayer money. It will be totally offensive to almost everyone."

"[The] idea of a federal betting parlor on atrocities and terrorism is ridicules and grotesque," Sen. Ron Wyden, D-Oregon, said. "The bizarre plan we are describing today is a waste of taxpayer money and it needs to stop immediately. The program's intent is clear: the federal government is encouraging people to bet on and make money from atrocities and terrorist attacks."

Registration for the site begins Friday and will be limited to the first 1,000 traders. Actual trading will begin Sept. 1 and the Department of Defense plans to open the site to 10,000 traders by Jan. 1, 2004.

[Malone LaVeigh]

I read elsewhere that John Poindexter is associated with this sick idea. Why am I not surprised?

[Justin]

Poindexter...ah yes, the convicted felon.

[Jeff White]

This is just too weird. Seems like it would be an easy market to manipulate. Good way for a terrorist group to fund future operations. What is going on in this country? :banghead:


Pentagon's Futures Market Plan Condemned
Mon Jul 28, 9:52 PM ET

By KEN GUGGENHEIM, Associated Press Writer

WASHINGTON - The Pentagon (news - web sites) is setting up a stock-market style system in which investors would bet on terror attacks, assassinations and other events in the Middle East. Defense 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 parlor on atrocities and terrorism is ridiculous and it's grotesque," Sen. Ron Wyden (news, bio, voting record), D-Ore., said.

The Pentagon office overseeing the program, called the Policy Analysis Market, said it was part of a research effort "to investigate the broadest possible set of new ways to prevent terrorist attacks." It said there would be a re-evaluation before more money was committed.

The market would work this way. Investors would buy and sell futures contracts — essentially a series of predictions about what they believe might happen in the Mideast. Holder of a futures contract that came true would collect the proceeds of investors who put money into the market but predicted wrong.

A graphic on the market's Web page showed hypothetical futures contracts in which investors could trade on the likelihood that Palestinian leader Yasser Arafat (news - web sites) would be assassinated or Jordanian King Abdullah II would be overthrown.

Although the Web site described the Policy Analysis Market as "a market in the future of the Middle East," the graphic also included the possibility of a North Korea (news - web sites) missile attack.

That graphic was apparently removed from the Web site hours after the news conference in which Wyden and fellow Democratic Sen. Byron Dorgan (news, bio, voting record) of North Dakota criticizing the market.

Dorgan described it as useless, offensive and "unbelievably stupid."

"Can you imagine if another country set up a betting parlor so that people could go in ... and bet on the assassination of an American political figure, or the overthrow of this institution or that institution?" he said.

According to its Web site, the Policy Analysis Market would be a joint program of the Pentagon's Defense Advanced Research Projects Agency, known as DARPA, and two private companies: Net Exchange, a market technologies company, and the Economist Intelligence Unit, the business information arm of the publisher of The Economist magazine.

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 and, in the 1980s, a key figure in the Iran-Contra scandal.

In its statement Monday, DARPA said that markets offer efficient, effective and timely methods for collecting "dispersed and even hidden information. Futures markets have proven themselves to be good at predicting such things as elections results; they are often better than expert opinions."

The description of the market on its Web site makes it appear similar to a computer-based commodities market. Contracts would be available based on economic health, civil stability, military disposition and U.S. economic and military involvement in Egypt, Iran, Iraq (news - web sites), Israel, Jordan, Saudi Arabia, Syria and Turkey.

Contracts would also be available on "global economic and conflict indicators" and specific events, for example U.S. recognition of a Palestinian state.

Traders who believe an event will occur can buy a futures contract. Those who believe the event is unlikely can try to sell a contract. The Web site does not address how much money investors would be likely to put into the market but says analysts would be motivated by the "prospect of profit and at pain of loss" to make accurate predictions.

Registration would begin Friday with trading beginning Oct. 1. The market would initially be limited to 1,000 traders, increasing to at least 10,000 by Jan. 1.

The Web site says government agencies will not be allowed to participate and will not have access to the identities or funds of traders.

The market is a project of a DARPA division called FutureMAP, or "Futures Markets Applied to Prediction." FutureMAP is trying to develop programs that would allow the Defense Department to use market forces to predict future events, according to its Web site.

"The rapid reaction of markets to knowledge held by only a few participants may provide an early warning system to avoid surprise," it said.

It said the markets must offer "compensation that is ethically and legally satisfactory to all sectors involved, while remaining attractive enough to ensure full and continuous participation of individual parties."

Dorgan and Wyden released a letter to Poindexter calling for an immediate end to the program. They noted a May 20 report to lawmakers that cited the possibility of using market forces to predict whether terrorists would attack Israel with biological weapons.

"Surely such a threat should be met with intelligence gathering of the highest quality — not by putting the question to individuals betting on an Internet Web site," they said.

Wyden said $600,000 has been spent on the program so far and the Pentagon plans to spend an additional $149,000 this year. The Pentagon has requested $3 million for the program for next year and $5 million for the following year.

Wyden said the Senate version of next year's defense spending bill would cut off money for the program, but the House version would fund it. The two versions will have to be reconciled.

___

On the Net:

Policy Analysis Market: www.policyanalysismarket.org

DARPA's FutureMap Web site: http://www.darpa.mil/iao/FutureMap.htm

[NukemJim]

This may not be as strange as it sounds. I have read of similar proposals in fiction, I am surprised the goverment is willing to try it.

As far as terrorists profiting from their acticivities I think the goverment would like that, the gov would be sure to give somone who make a lot of money on this a close look.

If its stupid and it works it's not stupid. Let the goverment give it a try.


NukemJim

[Shawn Dodson]

Good example of thinking outside the box, in my opinion.

[Waitone]

John Poindexter // data mining // TIA // terror futures

The man is a highly intelligent, well-educated, superbly sponsored idiot. Whoever is keeping this clown in his job needs to get scuffed up.

I can understand the need to look at random event theory in any number of manifestations, but to set up a terror futures pit is idiocy.

The clown should have quietly contracted the Chicago futures board to run a silent futures game and collected his data that way. To put the federales anywhere near such a bone-headed concept is beyond terminal stupidty.

BTW, we already have a terror futures market. It is calll the Dow, and S&P. Millions of financial decisions build in a terror premium.

[Correia]

I don't think it is weird at all.

Look at it this way. Remember right after 9-11 when all of us were disgusted that so many regular folks had predicted that kind of attack? Using a program like this opens up the .gov to all sorts of new and interesting ideas and theories. Regular people (who think enough of their idea to put some money on it) get to put themselves in the bad guy's shoes and say "I know what I would do."

Sounds like they are trying to harness the predictive powers of capitalism. Beats a bunch of guys locked into the government mindset making decisions from inside of cubicles. I don't think we should rely on this more than any of our traditional and proven methods, but it can't hurt to take a look.

My first hint that it might be a decent program is that the vast majority of the negative bleeting I have heard about this has come from the Democrats. :)

[Justin]

You'll note that my qualms with this particular bit of governmental boondogglry (I just made that word up) has more to do with the particular numbskull in charge, as well as the fact that it's a gov't program.

I guarantee you that this would stand on its own as a corporate internet betting site, and to tell you the truth, I'd rather that people spent their own out-of-pocket money on something like this than making it a gov't program.

[Cosmoline]

This sounds like a brilliant idea. Certainly far less offensive than the Patriot Act.

[Zundfolge]

I'm thinking this thing will be a great way for terrorists to raise money.

Just picture it ...


Terrorist 1:"Hey Abdul, when are we going to bomb that shopping mall?"

Terrorist 2:"Thursday ... right after lunch . Why do you ask?"

Terrorist 1: "I'm on the government's web site placing my bets. Odds are 5 to 1 that there will be a terrorist attack at noon on Thursday. If we put it off until early evening the odds increase to 8 to 1."

Terrorist 2: "Well then we'll have to do dinner early ... no fun blowing up infidels on an empty stomach."

[Crimper-D]

Are you SURE this is'nt some kind of Liberal Agitprop???

If this thing is real, the DOD is in _Serious_ need of an Oversight Review from the GAO. :cuss: :rolleyes:

[Seeker]

Has this come up yet today?
Sounds pretty laissez faire - not what I would expect from DARPA.
It may work at least as well as the CIA in predicting terrorism.
The power of the dollar!


All bets off for terror attack investors (http://uk.news.yahoo.com/030730/80/e56g4.html) WASHINGTON (Reuters) - The Pentagon has scrapped a planned online futures market that aimed to get information on Middle East events by letting investors bet on the probability of wars, terrorist attacks and assassinations.


One day after Democrats in Congress brought the Pentagon's Policy Analysis Market to light with withering criticism, a Defence Department spokesman said the program had been terminated.


"The director has determined that this is a program that under further scrutiny probably doesn't deserve continued support," spokesman Lawrence Di Rita told reporters on Tuesday.


Earlier, Deputy Defence Secretary Paul Wolfowitz told senators that while the Defence Department was supposed to be imaginative, "it sounds like maybe they got too imaginative."


U.S. senators released a letter saying the program's funding would be eliminated and Sen. John Warner, a Virginia Republican who chairs the powerful Armed Services Committee, called the plan "a very significant mistake."


After meeting with Warner, Anthony Tether, director of the Pentagon's Defence Advanced Research Projects Agency that planned the futures market, said the initiative was finished.


The Policy Analysis Market, launched online at http://www.policyanalysismarket.org, aimed to let anonymous traders wager money on when and whether such events as the overthrow of the Jordanian monarchy might take place.


The market, primed to start in October, planned to focus on economic, civil and military futures of Egypt, Jordan, Iran, Iraq, Israel, Saudi Arabia, Syria and Turkey, and the impact of U.S. involvement with these countries, according to the Web site.


HELPING THE BAD GUYS?


The idea was seen as a means of aiding the Pentagon to predict terror trends based on the predictive abilities of the markets.


"The price discovery process, with the prospect of profit and at pain of loss, is at the core of a market's predictive power," the program's Concept Overview said.


The plan would have allowed traders to buy futures contracts priced on the certainty of a particular event occurring in the Middle East.


While the proposal came under fire from lawmakers angered that the administration should have involved itself in a scheme that "trades in death," a senior market expert noted that financial markets have considerable powers to predict the future.


"From one end, creating a futures market on terrorism makes sense because markets have major predictive powers," said Phil Flynn, vice president and senior market analyst with Alaron Trading Corp. in Chicago. "But not only could it help the good guys, it could also help the bad guys. The terrorists could use the same information that these markets provided to see where we would be the most vulnerable."


The plan drew sharp criticism from congressional Democrats, including Senate Minority Leader Tom Daschle of South Dakota, who asked the Bush administration to reject the plan.


"We are asking the administration this morning to renounce this plan to trade in death," Daschle said.


Senate Intelligence Committee Chairman Pat Roberts of Kansas said someone in the administration would have to account for the fiasco: "I think they are way off base and somebody should bear that responsibility."


The program came under the direction of retired Adm. John Poindexter, but Tether said he saw no reason why he would leave his job.


Poindexter, convicted for his role in the 1980s Iran-Contra scandal -- which was later set aside -- also spearheaded the Pentagon's so-called Total Information Awareness Program to collect information about potential terror threats from private databases.


It raised such consternation over privacy invasion that boards were set up to monitor the program's compliance with U.S. law and "American values related to privacy."
.

[Duncan Idaho]

It may work at least as well as the CIA in predicting terrorism.It might have actually worked...at least a time or two. Oh well.

[300lbGorilla]

They'd have gotten way more hits from GA candidates than Hamas or Al Queda candidates.

Heck, ain't gambling against their religion? :rolleyes:

[Chris Rhines]

Somebody at DARPA has been reading Jim Bell. :what:

- Chris

[tiberius]

yeah, It sounds ridiculous at first and so many people in DC are overreacting. It has been proven to work in other fields by researchers.

A futures market isn't the same thing as gambling....it is close though :)

[GSB]

tiberius has it right. This as a case of a) people reacting without really understanding and b) certain politicians who shall remain nameless using it as an opportunity to grandstand.

It's too bad. A novel and potentially useful approach has been killed before it even had a chance to be tested.

[Leatherneck]

Shawn Dodson has it right: this is a good example of thinking outside the box. Now get back in the box, Poindexter!

TC
TFL Survivor

[Jeff White]

Well, there goes my chance to subscribe to Stratfor and all the good Jane's publications and write them off as a business expense :rolleyes:

So how did DARPA think the traders were going to get their information? Perhaps al-Queda, Hezbolla, the IRA, FARC and the other groups would publish nice slick portfolios for everyone to study. :scrutiny:


Washington Post
July 30, 2003
Pg. 17

Pentagon Drops Bid For Futures Market

Plan Was to Monitor Bets on Terrorism, Coups

By Bradley Graham and Vernon Loeb, Washington Post Staff Writers

The Pentagon yesterday scrapped a plan to establish a futures market that would have allowed investors to bet on the probability of coups, assassinations, terrorist strikes and other events in the Middle East.

Confronted by a congressional outcry and widespread expressions of disbelief after news of the program suddenly emerged Monday, senior Pentagon officials appeared at a loss to explain how it got as far as it did.

Deputy Secretary of Defense Paul D. Wolfowitz told a Senate hearing that he learned about the program from a newspaper story he read en route to the hearing, which dealt with postwar reconstruction in Iraq.

"I share your shock at this kind of program," he said. "We'll find out about it, but it is being terminated."

At the Pentagon, Tony Tether, director of the agency responsible for overseeing the program -- the Defense Advanced Research Projects Agency (DARPA) -- issued a statement saying "it simply did not make sense to continue" the effort "in light of the recent concerns surrounding" it.

Sen. John W. Warner (R-Va.), chairman of the Senate Armed Services Committee, said earlier in the day that he had phoned Tether to impress on him the need to stop the program immediately. Warner said Tether's agency had neglected to "think through the full ramifications of the program."

The initiative had been seen by its Pentagon sponsors as a way of using the predictive ability of markets to anticipate terrorist events or other crises. It was based on the notion that futures trading has proven effective in predicting other events such as oil prices, elections and movie ticket sales.

Under the plan, traders could have bought and sold futures contracts on the likelihood of, say, Palestinian leader Yasser Arafat being assassinated or Jordanian King Abdullah being overthrown. Those who predict correctly would have profited over those who guess wrong.

The Pentagon had listed the program in defense budget plans sent to Capitol Hill and had briefed congressional staff members about it earlier this year. A Web site had promoted the program, and the registration of up to 1,000 traders had been due to begin on Friday, with trading set to start Oct. 1.

But the initiative had gone largely unreported by news organizations until two Democratic senators -- Ron Wyden of Oregon and Byron L. Dorgan of North Dakota -- called a news conference on Monday to denounce it as twisted and morally offensive.

At first, DARPA officials tried to defend the program as a way of gaining intelligence and preventing terrorist attacks. But by yesterday, the program had become the subject of revulsion and mockery among Democratic and Republican lawmakers alike.

On the Senate floor, Democratic leader Thomas A. Daschle (S.D.) denounced it as a "plan to trade in death" and said the Bush administration should "issue a public apology, especially to the families of the victims of September 11." Similar expressions of outrage were leveled at Wolfowitz during his appearance before the Senate Foreign Relations Committee.

While promising to look into the matter, Wolfowitz sought to add a word in defense of DARPA, saying the agency "is brilliantly imaginative in places where we want them to be imaginative." He then added: "It sounds like maybe they got too imaginative in this area."

This drew a sharp retort from Sen. Barbara Boxer (D-Calif.).

"I don't think we can laugh off that DARPA program," she said. "There is something very sick about it. And if it's going to end, I think you would end the careers of whoever it was who thought that up."

She noted that terrorists could have participated in the betting as well -- and "knowing they were planning an attack, could have bet on the attack and collected a lot of money."

Called the Policy Analysis Market, the project arose under a DARPA division called FutureMAP, or "Futures Markets Applied to Prediction." Two companies were involved -- Net Exchange, a market technologies company, and the Economist Intelligence Unit, a division of the publisher of the Economist magazine. The Pentagon had planned to spend $8 million on the effort through 2005.

The program was supervised by retired Adm. John Poindexter, who served as national security adviser to President Ronald Reagan and was convicted for his role in the 1980s Iran-contra scandal, although the conviction was set aside.

Poindexter was involved in another controversy last year, over a computerized surveillance project, initially known as the Total Information Awareness program, meant to collect information about potential terrorist threats by culling private databases. After lawmakers and others voiced concerns about possible invasions of privacy, Congress and the Pentagon imposed constraints on the project, and its name was changed to the Terrorism Information Awareness program.

In remarks to reporters yesterday, Wyden and Dorgan welcomed the end of the futures trading project but called for further scrutiny of Poindexter's activities.

"I want to emphasize that much more needs to be done to rein in the runaway horse that is this terrorism information program," Wyden said. Dorgan said he and Wyden had asked the Pentagon for a "full report" on "every single program" being run by Poindexter's office.

Asked yesterday at a Pentagon news conference about Poindexter's employment status, Larry DiRita, the chief Defense Department spokesman, said: "At the moment, Admiral Poindexter continues to serve in DARPA."

In confirming the termination of the futures trading project, DARPA officials made clear yesterday that they have not given up trying to find ways of better predicting where and how terrorists may strike next.

"DARPA believes it is important to continue funding research that examines how to better use advanced information technologies and processes as predictive tools for terrorist acts," an agency statement said.

[Correia]

Less offensive than the Patriot act?

Throwing sacks of puppies onto a freeway is less offensive than the Patriot act.

[Stinger]

Heck, ain't gambling against their religion?

So's murder, but the jihad freaks can always find a way to justify their means.

Stinger

[300lbGorilla]

Hence the " :rolleyes: " following that question. ;)

[Dave Bean]

This was a missed opportunity. The "futures" idea is a very good one, DARPA was onto something. Those people who screamed bloody murder have no idea what kind of analysis Wall Street firms performs when they play in the "futures" market. They perform complex modeling that require major computing power and with many variables.....just like the real world.

The people who shot the idea down are just idiots....morons of the first degree. I think the most complicated analysis they've ever done was comparison shopping at the supermarket.


Dave Bean

[erikm]

On the one hand it sounds a bit like someone read Earthweb (http://www.baen.com/blurbs/067157809X.htm) once too often. On the other it's a case of saying 'put your money where your mouth is'. Dunno if it could work in this situation though.

Cheers,
ErikM :evil:

[blades67]

This sounds like the "Hunting Bambi" scam.:rolleyes:

[Seeker]

Yea, what Dave Bean said!

what kind of analysis Wall Street firms performs when they play in the "futures" market.
.firms.. being a key term, in that many groups are competing, voluntarily, to obtain the same info, so as to place more intelligent "bets".

I think given a little time this could have been very accurate.

..and it may not have "turned" on private citizens, as there wouldn't be any profit in fingering the wrong person or event.

An opportunity missed.

[bfason]

Poindexter...ah yes, the convicted felon.

Not exactly.

Admiral Poindexter was indicted March 16, 1988, on seven felony
charges. After standing trial on five charges, Poindexter was found guilty April 7, 1990, on all counts: conspiracy (obstruction of inquiries and proceedings, false statements, falsification, destruction and removal of documents); two counts of obstruction of Congress and two counts of false statements. District Judge Harold H. Greene sentenced Poindexter June 11, 1990, to six months in prison on each count, to be served concurrently. A three-judge appeals panel on November 15, 1991, reversed the convictions on the ground that Poindexter's immunized testimony may have influenced the trial testimony of witnesses. The Supreme Court on December 7, 1992, declined to review the case. In 1993, the indictment was dismissed on the motion of Independent Counsel.

When the judgment of the trial court was vacated, Poindexter stopped being a convicted felon. He can vote, own firearms, sit on a jury, etc.

Don't you just hate it whenever crooks get off on a technicality?

Also, the DoD seems to have taken a page from Jim Bell's book.
Assassination Politics (http://cryptome.org/jdb/ap.htm)

[Jeff White]

:rolleyes:

Wall Street Journal
July 31, 2003

Poindexter To Leave Pentagon In Wake Of Terror-Futures Plan


By a WALL STREET JOURNAL Staff Reporter

WASHINGTON -- The head of a Pentagon research agency is stepping down following an uproar over his efforts to help set up a futures-trading market for predicting assassinations, terrorist strikes and other upheavals in the Middle East.

John Poindexter, director of the Defense Advanced Research Projects Agency, or Darpa, is expected to resign in a matter of weeks, a senior Defense Department official said. The office sought $8 million from Congress to help a private group set up a Policy Analysis Market as a way to provide the Defense Department with "market-based techniques for avoiding surprise and predicting future events."

Lawmakers of both parties blasted the idea as ghoulish and a waste of tax money.

Defense Secretary Donald Rumsfeld quickly canceled government support for it, saying "it was clear that even if it happened to have been a brilliant idea, which I doubt, it would not have been able to function in the environment that was created." The Net Exchange, the San Diego group that would have operated the market, announced that without government support, its prospects are unclear.

The flap follows another Darpa firestorm. Shortly after the Sept. 11, 2001, attacks, the agency proposed setting up a "Total Information Awareness" program that would have tried to identify terrorists by compiling dossiers on millions of U.S. citizens. The program since has been renamed "Terrorism Information Awareness," and its developers have pledged it won't be used to snoop on citizens.

Mr. Poindexter, a retired Navy rear admiral, served as national-security adviser during the Reagan administration and was sentenced to prison stemming from the Iran-Contra affair. His conviction was reversed on appeal. Mr. Poindexter couldn't be reached Wednesday night.

[Jeff White]

I still think the idea that investers could somehow gain more intelligence then the intelligence services of the free world. As I said in an ealier post, I don't think the terrorist groups publish annual reports. There is so little information to base sales of futures on that anything done there would be guessing. Hardly the same as what goes into buying commodity futures, where production reports, sales reports, past history, climate forcasts all are researched.

If the free worlds intelligence services can't model future terrorist attacks with all the info they have and all the supercomputer access, how much better do they think a terrorist futures invester would do?

Jeff




Bloomberg.com
July 30, 2003

Pentagon's Futures Market Was Research Tool, Contractor Says

By Ann Saphir

The Pentagon's planned futures exchange based on events in the Middle East was designed as a research tool and wasn't intended to be a market on terrorism, said Charles Polk, one of the market's architects.

The Pentagon's Defense Advance Research Projects Agency abandoned the plan a day after two Democratic senators urged its cancellation. The so-called Policy Analysis Market would have let traders bet on the likelihood of events ranging from the overthrow of the Jordanian government to the assassination of Palestinian leader Yasser Arafat.

It was ``a field test of a technology that might be promising'' and could have proven ``an effective tool'' to filter information about the region, said Polk, president of San Diego- based Net Exchange, which had the contract to develop and run the market. ``PAM was never billed to DARPA or anyone else as a market in terrorism.''

Futures contracts are agreements to buy or sell assets at a later specific price and date. Trading on PAM was scheduled to begin on Oct. 1. Its main contracts would have been linked to indicators of the region's economies, tourism and other signs of civil stability, and armed conflicts and other military action, according to Merli Baroudi, London-based head of risk services for the Economist Intelligence Unit, which would have supplied data to the market.

`Hashed Out'

Futures contracts are sometimes bought as a bet on prices and sold before the delivery date. Contracts on indexes or events are typically settled in cash. The Pentagon market would have offered ``event-specific'' contracts based on what traders thought might influence the course of events in the region, Polk said.

The Web site for the Policy Analysis Market, no longer available, cited ``Overthrow of Jordanian Monarchy'' as an example of the sort of event traders might speculate on. Others include Arafat's assassination, the recognition by the U.S. of a Palestinian state and the likelihood of a North Korea missile attack on the U.S.

``It's not meant to be inflammatory,'' Polk said. ``None of those examples were concocted, and all of those were things being hashed out in the press and in policy discussions at time -- and all of them were germane to U.S. policy in the Mideast. Granted, they were all there to attract attention'' and encourage interest in the market.

Senator John Warner, a Republican from Virginia and chairman of the Armed Services Committee, said at a Washington press conference yesterday that the market was ``a serious mistake.'' Senate Democratic leader Tom Daschle said Congress had to proceed with an inquiry.

Profit Potential

PAM's first traders would have been policy analysts, scholars and other people knowledgeable about the Middle East, Polk said. ``To give this prototype any chance of showing effectiveness, we needed people who knew the area.''

The notion the market could have allowed terrorists to profit from their acts is unfounded, he said.

``There never would have been enough money in the market to offer a real profit potential for someone,'' he said.

The market's first traders would have received $100 each for a three-month test phase. If the market proved a success, the project would have had a projected 10,000 participants by March 2005, each with a maximum of $1,000 on deposit, he said.

``This is, if we were lucky, a $1 million to $10 million a year turnover'' market. By contrast, the Chicago Mercantile Exchange, the biggest U.S. futures market, handles $1.8 billion each day in settlement payments.

Net Exchange won't continue with the project on its own, Polk said. ``I don't consider that to be a worthwhile business decision at this point in time,'' he said.

[Hawkman]

The idea is based on Bayes Theory of Subjective Probability. It has been used successfully many times to solve "unsolvable" problems and is studied extensively in higher economics.

Quoting from MSNBC "It is the very means by which Dr. John Craven located a missing H-bomb in the Mediterranean some years ago. Normal analysis had failed to find the bomb, so Dr. Craven started holding rounds of betting pools with bottles of scotch as the prize, and the bomb was finally found just where the bets all clustered. Dr. Craven used the same means to locate the wreckage of USS Scorpion."

[Stinger]

Hey, guys,

I have this watch...the hands don't move...but it is still right twice a day.

Sounds like a very crazy idea (but sometimes those turn out to be the best kind).

Regards,

Stinger

[Waitone]

America's human intelligence and its ability to collect human intelligence is a train wreck. It started in the mid-70's with the Church Committee post-Watergate, continued through Birch Byhe's work, took a real hit when Jimmuh Carter rode into town. Carter employed Stansfiedl Turner as CIA head. Turner worshipped at the alter of technical intelligence and proceded to fire 300+ human intelligence collectors and analysts. The situation was so bad in the late 70's when US hostages were taken in Iran, the US had no, none, zero human intelligence capability in Iran or anywhere else in the middle east.

Reagan tried to correct the situation but was too llittle too late. GWB 41st had no human intelligence in Iraq. Clinton came along and with the help of the Toracelli protocol prohibited human intelligence collection unless the sources were squeeky clean able to withstand a human right scrub. Bottom line what ever human intelligence capabilities we had in the middle east was squashed under Clinton. Dubya 43rd gets himself into a situation where he has to have good solid human intelligence right now and there ain't nothing there. Meanwhile those responsible for the destruction of our ability to collect HI wag their fingers complaining of bad US intelligence.

So how do you fix the problem? Well, you move from a world of fact to a world of opinion and hope that collected uninfomed opinion can in some way make up for a national mistake of profound proportions.

I hope we've learned our lessons, but listening to Bob Graham makes me think perhaps not.

[5by5]

"Asked yesterday at a Pentagon news conference about Poindexter's employment status, Larry DiRita, the chief Defense Department spokesman, said: "At the moment, Admiral Poindexter continues to serve in DARPA.""

DARPA...what a bunch of maroons. Just because they invented the internet, they think that they can float hairbrained schemes like this.

What have they done lately?

See: http://www.darpa.mil/body/pdf/transition.pdf

[pax]

Duplicate threads merged.

pax

[bfason]

America's human intelligence and its ability to collect human intelligence is a train wreck. It started in the mid-70's with the Church Committee post-Watergate,

The Senate Select Committee to Study Governmental Operations with Respect to Intelligence Activities, known as the "Church Committee" after its chairman Frank Church, conducted a wide-ranging investigation of the intelligence agencies in the post-Watergate period.

The Church Committee took public and private testimony from hundreds of people, collected huge volumes of files from the FBI, CIA, NSA, IRS, and many other federal agencies, and issued 14 reports in 1975 and 1976. Since the passage of the JFK Assassination Records Collection Act in 1992, over 50,000 pages of Church Committee records have been declassified and made available to the public.

http://history-matters.com/archive/church/contents.htm

The Church Committee did not start the train wreck, it merely brought it to light. It turned out that the CIA was - among other things - running illegal domestic spying operations against political dissidents here in the United States - a clear violation of its 1947 charter. Those kinds of police state activities have absolutely no place in a free society. The CIA deserved to have its chain jerked.

Our sour relations with Iran can be traced back to the CIA's overthrow of Iran's democratically-elected government under President Mohammad Mossadegh. The Iranians still remember this event even though most of us never even heard of it. See Stephen Kinzer's
All the Shah's Men (http://search.barnesandnoble.com/booksearch/isbnInquiry.asp?userid=38BUBX12KE&isbn=0471265179&itm=1) (John Wiley & Sons: 2003) for a detailed examination of the CIA's Operation Ajax.

[Giant]

Relax and take a break. Poindexter has announced his pending retirement.

Gone but not forgotten, quoting the bunny - What a maroon!

Giant