Comments: Jesus Christ
So, were you going to include a reason why it won't work? You forgot! The reasons I've seen for opposing it are more ethical and moral reasons than considerations of its effectiveness.
(Disclosure: I think it's excitingly morbid, so I don't particularly care how effective the "futures market" idea is.)
Posted by zack at July 29, 2003 10:57 AM
Your example does (inadvertently) illustrate why I think it won't work:
1 Say a lot of people in the market think it's a good assumption that Israel will suffer a biological attack before 2005.
2 The USA acts on this knowledge, pursues leads, and thwarts bio attacks on Israel.
3 Thus, no one made money! So, why anyone participate in this market?
Of course, I'm sure there are a lot of details to the plan that aren't public domain (and also aren't the domain of handwringing Senators!)
Posted by zack at July 29, 2003 11:09 AM
Great example. The real futures and equities markets kind of work this way, ie if you find an inefficiency (such as a stock that is low priced) and you buy it, and the rest of the market realizes that the stock is mispriced, you will profit but eventually newcomers to the stock will be bidding for it at fair price.
Whereas, the whole point of this market isn't to correct inefficiences at all.
It's more of a lottery than a stock market, and we all know who wins when you play the lottery. (Some redneck).
Posted by Chris at July 29, 2003 11:13 AM
Awwww:
http://story.news.yahoo.com/news?tmpl=story&cid=542&ncid=703&e=2&u=/ap/20030729/ap_on_go_ca_st_pe/terror_market
Over before it could even begin.
Posted by zack at July 29, 2003 01:48 PM
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