X-Message-Number: 24215
From: "Peter C. McCluskey" <>
Subject: Re: Idea Futures
Date: Tue,  8 Jun 2004 22:42:58 -0700 (PDT)

  (David Stodolsky) writes:
>Message #24179
>error, as I recall. That is, that current mechanisms already 
>incorporated the information seeking to be bet on.
>
>There was an attempt by "Homeland Security" to set up a market where 
>people could bet on whether, for example, foreign leaders would be 
>assassinated by a certain date. This was shut down as morally 
>reprehensible, as I recall.

 You're refering to a project that DARPA started planning in 2000. It may
have had some Homeland Security involvement toward the end.
 Did anyone ever come up with a coherent moral objection to it? (Objections
to trading poorly thought out claims such as claims on whether an individual
person would be assassinated only count if there's some reason to think the
project leaders were likely to create such claims - it appears more likely
that that idea came from demogogues opposed to the project.)

 There are plenty of things the project could have done that might have
revealed valuable info if the markets had been running in 2002, e.g.:
 a) claims about the number of suicide bombings in 2004 if the U.S. invaded
Iraq, and the number of suicide bombings if it didn't.
 b) claims about the number of WMD destruction found in Iraq in 2003.

>It is known that large bets were placed that airline stocks, etc. would 
>go down after the attacks on the WTC and Pentagon. About 30 billion USD 

 The SEC concluded after investigating that the people who made the trades
that aroused suspicion weren't betting on terrorism.

>> Oct2004 Unemployment to be ON or BELOW 5.0% and GW Bush to win election
>
>I don't see how anyone could win against the people preparing the 
>unemployment statistics. In general, insider information will determine 
>the winners on these types of bets and there doesn't seem to be any 
>protection against that at all. There is a vast amount of evidence that 
>this is true on the stock market, where there is considerable 
>regulation.

 There's a vast amount of evidence that people do make money on markets
with strategies other than using inside info in spite of this alleged
insider trading. But it could take a lot of time for you to check this
evidence, so it might be better for you to avoid trading and just use
the markets as a source of information.
-- 
Peter McCluskey          | I see no greater impediment to scientific progress
www.bayesianinvestor.com | than the prevailing practice of focusing all of
                         | our mathematical resources on probabilistic and
                         | statistical inferences while leaving causal con-
                         | siderations to the mercy of intuition - J. Pearl

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