Re: futures market military intelligence

[Kenneth Campbell <kkc@xxxxxxxxxxxx>]

Awww... they killed it.

I was looking forward to buying futures on Bush dying in a snack-related
mishap.

Ken.

--
Half our life is spent trying to find something to do
with the time we have rushed through life trying to save.
          -- Will Rogers


--- cut here ---


Pentagon Folds Hand in Online Terrorism Futures Scheme

By Roy Mark
Internet.com
July 29, 2003


WASHINGTON -- The Pentagon has agreed to stop a new program of the
Defense Advanced Research Projects Agency (DARPA) to predict terrorist
events through the online selling of "futures" in terrorist attacks.

Sen. John Warner (R.-Va.), chairman of the Senate Armed Forces
Committee, said during a Tuesday morning hearing he had contacted the
program's director and the Pentagon had agreed to scuttle the program
that had ignited a firestorm of criticism.

U.S. Senators Ron Wyden (D-Ore.) and Byron Dorgan (D-N.D.) first brought
attention to the program in a late Monday press conference.

The Policy Analysis Market (PAM), the first phase of the project, is
already online with funding from a federal grant and was scheduled to
begin a beta testing on Friday. The Defense Department had also
requested $8 million for its "Futures Markets Applied to Prediction"
(FutureMAP) initiative, which would expand on the Policy Analysis
Market's terror-wagering scheme.

"Analysts often use prices from various markets as indicators of
potential events. The use of petroleum futures contract prices by
analysts of the Middle East is a classic example," the site's concept
overview states. "PAM refines this approach by trading futures contracts
that deal with underlying fundamentals of relevance to the Middle East."

According to site, PAM will initially focus on the "economic, civil, and
military futures of Egypt, Jordan, Iran, Iraq, Israel, Saudi Arabia,
Syria, and Turkey and the impact of U.S. involvement with each."

"Spending taxpayer dollars to create terrorism betting parlors is as
wasteful as it is repugnant. The American people want the Federal
government to use its resources enhancing our security, not gambling on
it," the senators wrote in a letter to Dr. John Poindexter, who heads
DARPA.

PAM is a joint venture between DARPA; the Economist Intelligence Unit,
the business information arm of The Economist Group, publisher of The
Economist; and Net Exchange, which is responsible for design,
development and operation of the PAM trading system.

PAM and the FutureMAP program would work much like other financial
markets, with investors buying "futures" in events they think are likely
to happen, and selling off futures as they believe events become less
likely to happen. Some of the possibilities the PAM website offers for
sale are the overthrow of the King of Jordan, the assassination of
Yasser Arafat, and a missile attack by North Korea.

Bidders would profit if the events for which they hold futures --
including government coups, assassinations and missile attacks -- occur.

"This is an appalling waste of taxpayers' money," Dorgan said at a
Monday afternoon press conference. "We need to focus our resources on
responsible intelligence gathering, on real terrorist threats. Spending
millions of dollars on some kind of fantasy league terror game is absurd
and, frankly, ought to make every American angry. What on Earth were
they thinking?"

PAM is scheduled to begin registration for potential investors onFriday,
and its website offers examples of policy experts making trades in the
system. However, the website states an intention to eventually include
thousands of traders who only have to pick a username and password to
participate.

Additionally, the Policy Analysis Market website assures potential
investors that DARPA will not have access to their identities or funds.
According to Wyden, a member of the Senate Intelligence Committee, and
Dorgan, a member of the Defense Appropriations Subcommittee, this
promise creates the possibility that terrorists themselves could drive
up the market for an event they are planning and profit from an attack,
or even make false bets to mislead intelligence authorities.

"Just last week the 9/11 report proved that the basics of communication
and follow-through ought to be our primary weapons against the terrorist
threat," said Wyden. "Make-believe markets trading in possibilities that
turn the stomach hardly seem like a sensible next step to take with
taxpayer money in the war on terror."

Wyden has also led the criticism of another DARPA project, the Total
Information Awareness (TIA) program, which has since been renamed as
Terrorist Information Awareness. It is a project of the Information
Awareness Office (IAO), which is under DARPA.

The data mining project's stated mission is to "imagine, develop, apply,
integrate, demonstrate and transition information technologies,
components and prototype, closed-loop, information systems that will
counter asymmetric threats by achieving total information awareness
useful for preemption; national security warning; and national security
decision making."

Washington think thank Cato Institute interprets that as "a colossal
effort to assemble and 'mine' massive databases of our credit card
purchases, car rentals, airline tickets, official records and the like.
The aim is to monitor the public's whereabouts, movements and
transactions to glean suspicious patterns that indicate terrorist
planning and other shenanigans."

In February, Wyden sponsored an amendment to a spending bill to stop all
funding for the proposed surveillance program until the Pentagon can
prove to Congress the program does not violate privacy rights. The
amendment also called for a report on the TIA within 90 days, which
DARPA completed on May 20.