I DID shorten the explanation a bit TOO much, didn't I? In commodities, like you mentioned, the more an investor knows about his market, the more LIKELY he is to make money. However, since most commodity traders already know PRETTY MUCH all there is to know about their respective markets (except for the guys known as "suckers"<GRIN>) Profitability comes down to 'dumb luck'. Somewhat like a high stakes poker game. All players being evenly matched, luck is the determining factor, though an inexperience player can occasionally do well, it won't happen for long). Commodities being a zero-sum game means every dollar one investor makes has to be 'lost' by other investors. The $60,000 the Chicago girl earned was lost one or more people who'd bet the other way. The Arms Race reference means if YOU get better (or more knowledgeable, in this case) your competitor soon follows, canceling your advantage. In options, no, the house does not set the odds. The house has NO control over the odds. So in this 'terror options' scheme, the where the investors can actually effect the outcome, it becomes like the PLAYERS (or managers, like Pete Rose) in baseball betting for or against themselves in their games. First, they have inside information. Second, they can gage their performance in order to be more profitable. Third, the DARPA plan was to bet on death, destruction, and chaos, not a game where the losers only go home poorer or dejected. Participants and investors in these "terror futures" would be profiting from the suffering and death of innocent people. -----Original Message----- From: Mark Wonsil [mailto:[log in to unmask]] Sent: Friday, August 01, 2003 12:54 PM To: 'Gates, Scott'; [log in to unmask] Subject: RE: [HP3000-L] OT: War Futures (Back to OT) HP-3000 Systems Discussion wrote: > Commodity futures, such as you mentioned at the end of your note, are > a zero sum game. Therefore the knowledge to be consistently successful > grows constantly (Kind of like an arms race does with weaponry). Sorry, I don't follow the arms race thread. > The futures market for 'terror' developed by DARPA would eventually, > IMHO, lure the terrorists to invest (and back up with > action) in order to fund their plans or a hedge fund for their > failures. Again, I don't follow. In any betting scheme, the "house" sets odds so the money is evenly split on either outcome. In order for a terrorist to make the big money, you have to guess what others are not. Of course, there are those who will bet on the long shot - witness any purchaser of a multi-State lottery ticket. They are the "noise". If there's an increase in the betting, and the target event is well-defined, then the information is out there to start to prevent the act. This is the signal. If terrorists bet on the event to happen to generate a false information and don't carry it out or fail at doing it, well, they lose all of the money in the bet. If a terrorist bets against an unlikely event, tries and fails, then they won't earn that much money. What the DARPA folks are hoping is that the smaller fish, someone resentful of the leadership, will show the cards by placing bets. It really seems like a pretty good way to get people to fess up. Contrast this to listening to the talking-heads (analysts, not the group) on TV or in the papers, who's free opinions are usually overcharged. From an economic standpoint, it's pretty clever. It may sound gruesome, but like the article says, it's really no different than a term life policy purchased by individuals and companies all around the world every single day. * To join/leave the list, search archives, change list settings, * * etc., please visit http://raven.utc.edu/archives/hp3000-l.html *