Freethought & Rationalism Archive

JP2 · 07-29-2003, 01:38 AM

If you want to do some trading of your own, the website is available in all its glory at:

http://www.policyanalysismarket.org

contracycle · 07-29-2003, 03:14 AM

Quote:

Originally posted by Loren Pechtel

Futures markets are actually a very good way of predicting what's going to happen.

Yeah. So good that a chimpanzee got a better market performance average than a prestigous firm of traders.

Ruy Lopez · 07-29-2003, 07:15 AM

Probably a Fundraiser for the Pentagon

Futures markets are notorious for ripping off participant speculators. In 1986-87 I traded commodity futures in the NYMEX and CBOT (New York Mercantile and Chicago Board of Trade). At that time I read plenty of literature on the subject and the more honest ones revealed that only 5% to 8% of all trader accounts make money over time.

Who therefore makes the lion share of the winnings. We have a situation where 8% wins the money of the 92% less commisions. It should be the owner of the house because he is in a position to know the open positions at any time during the trading session.

Don't buy the proposition that proposed market will help predict the future or likelihood of events. That would be saying that independent analysts or veteran observers can regularly beat US and British intelligence. The only party that knows the fundamentals are the terrorists themselves and they would not reveal themselves through the exchange because under extraordinary circumstances, they can be tracked down.

Besides if the Pentagon or its agents want to make money in the exchange to fund secret projects or those that cannot be revealed to congressional committees, they do not need to pit their intelligence expertise against outsiders. All they need are market manipulators. The information edge lies in the "clearing house", the secretive body that keeps track of "open positions".

To make money for the Pentagon, the "gunners" get the open positions from the clearing house. If they notice a preponderance of short positions, they simply gun the stoploss or buystop orders of the shorts. For example. December gold trades at $370 and there is a three to one ratio between shorts and longs. the gunners check that the buystop orders are located between 375 and 378. They market orders to buy starting at 370 while they post the equivalent selling contracts at 380 and higher. When the shorts scamper for cover, the Pentagon has made money for that day. They can do it everyday if they wish.

The reverse procedure applies to a preponderance of long positions.

For those of you who have trading experience and know how to read price charts (usually bars or candlesticks), you will detect manipulation in pork bellies, live hogs and cattle more easlily. Gold also gets hit and the usual suspect was George Soros. That was in the past.

The people who benefit most from derivatives are the professional hedgers; they probably lose more than they gain but it becomes worth it when the unexpected strikes. It recoups company losses from operations.

The US gov't must really be having budget problems. Short US dollars. Buy Euro Canadian and Australian.

Tom Sawyer · 07-29-2003, 09:04 AM

Well, this idea didn't last long:

Pentagon Abandons Plan

I can't believe it made it this far, though

theyeti · 07-29-2003, 09:37 AM

This was a pretty nutty idea. I can think of three major problems, all of which I think have been covered in one form or another.

1. Futures markets work when the traders have access to large amounts of information, and are able to analyze that information to make an informed "bet" on the likelihood of future prices. The Pentagon's idea in creating this market seems to be to hire a bunch of anaylsts for free. But like Ruy said, this assumes that independent analysts can do better than this insiders at the CIA, FBI, etc. Who has access to more information? Obviously the government spooks. Either the futures market will suffer from inadequate information, in which case it's useless, or its traders will have to have access to the same information as the CIA, in which case you've got a massive leak problem.

2. Those with connections to terrorism will find this easy to manipulate. They can make a bundle by betting on a terrorist act that they know will happen, or they can thwart intelligence by making it seem as if a particular act is going to happen when they know that it won't. Using this system to catch terrorists is unlikely, because the actual terrorists can be very far removed from those who are trading, and the traders can manipulate the market in so many ways that it would be difficult to find out who's doing it.

3. Acts of terrorism are rare events. They are not like weather phenomena that happen with some degree of regularity, they are capricious in their occurance. Whether or not one can predict a terrorist act with any degree of reliabitily by using this system depends critically on how predicatble terrorism is by its very nature. I would say it's not very predicatble at all, which makes futures trading little more than a crap shoot. Intelligence analysts are more likely to be misled by irrational tulip crazes than they are to gain useful intelligence.

There are other problems that come to mind, but that's enough for me. This is such a harebrained scheme that only a dumbass like Poindexter could have come up with it. What is that criminal still doing in government?

theyeti

theyeti · 07-29-2003, 10:30 AM

Oh, and in case anyone wants to read up on one of the many convicted felons that Dubya has appointed to high places, this page details Poindexter's involvement with the Iran/Contra scandal.

theyeti

Jimmy Higgins · 07-29-2003, 11:56 AM

From the people who brought you Iran-Contra, the Election 2000 debacle, 9/11, and WMD's in Iraq that turn invisible, brings you perhaps one of the most sick and vile ideas ever conceived of by a popularly elected government (not that they were popularly elected).

I can't even start to say how awful this is. Not only did someone have to actually come up with this idea to begin with, for who knows what, other people actually had to agree with it and think it was a good idea as well. And it got so far that they made a website?! If this doesn't prove they are evil, what would?

The Daily Show will have a feast with this.

elwoodblues · 07-29-2003, 04:45 PM

Read about this earlier today.

First impression: they're fucking nuts!

Second impression: the system has some arguable benefits, but they're fucking nuts to have done this so ridiculously out in the public eye.

Someone was thinking way the hell outside the box a few months ago. Good for them. I am very surprised, though, that the project got this far.

Loren Pechtel · 07-30-2003, 02:25 PM

Quote:

Originally posted by S2Focus
Actually, on further reflection, I'll have to admit that something like this really does make sense in a perverse sort of way. WIth such a market, there'd be lots of private-sector "bean-counter" types looking out for suspicous transactions. So information like this would be much more difficult for the Cheney/Perle/Wolfowitz crowd to hijack than the type of intelligence that typically works its way through gov't (CIA and FBI) channels.

Exactly--with money at stake you'll get people to hunt for details without the government spending a penny.

RLV · 07-30-2003, 03:57 PM

Quote:

Originally posted by Loren Pechtel
Exactly--with money at stake you'll get people to hunt for details without the government spending a penny.

I don't think the kind of people that can gather intelligence on such things would be the ones most likely to participate in such a market.

But then, even if they were, you forget one side effect: if people bet on some terrorist attack, they will be very interested on that attack actually happening. So, they will have an incentive to aid the terrorists in the attack, and to thwart any prevention of these attacks.
If terrorism prevention is the goal, I don't think that recruiting people to help the terrorists is the best way to do it.

Nutty indeed.

RLV

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07-29-2003, 01:38 AM	#11
JP2 Regular Member Join Date: Sep 2002 Location: Prague, Czech Republic Posts: 204	If you want to do some trading of your own, the website is available in all its glory at: http://www.policyanalysismarket.org

07-29-2003, 07:15 AM	#13
Ruy Lopez Veteran Member Join Date: Mar 2002 Location: Manila Posts: 5,516	Probably a Fundraiser for the Pentagon Futures markets are notorious for ripping off participant speculators. In 1986-87 I traded commodity futures in the NYMEX and CBOT (New York Mercantile and Chicago Board of Trade). At that time I read plenty of literature on the subject and the more honest ones revealed that only 5% to 8% of all trader accounts make money over time. Who therefore makes the lion share of the winnings. We have a situation where 8% wins the money of the 92% less commisions. It should be the owner of the house because he is in a position to know the open positions at any time during the trading session. Don't buy the proposition that proposed market will help predict the future or likelihood of events. That would be saying that independent analysts or veteran observers can regularly beat US and British intelligence. The only party that knows the fundamentals are the terrorists themselves and they would not reveal themselves through the exchange because under extraordinary circumstances, they can be tracked down. Besides if the Pentagon or its agents want to make money in the exchange to fund secret projects or those that cannot be revealed to congressional committees, they do not need to pit their intelligence expertise against outsiders. All they need are market manipulators. The information edge lies in the "clearing house", the secretive body that keeps track of "open positions". To make money for the Pentagon, the "gunners" get the open positions from the clearing house. If they notice a preponderance of short positions, they simply gun the stoploss or buystop orders of the shorts. For example. December gold trades at $370 and there is a three to one ratio between shorts and longs. the gunners check that the buystop orders are located between 375 and 378. They market orders to buy starting at 370 while they post the equivalent selling contracts at 380 and higher. When the shorts scamper for cover, the Pentagon has made money for that day. They can do it everyday if they wish. The reverse procedure applies to a preponderance of long positions. For those of you who have trading experience and know how to read price charts (usually bars or candlesticks), you will detect manipulation in pork bellies, live hogs and cattle more easlily. Gold also gets hit and the usual suspect was George Soros. That was in the past. The people who benefit most from derivatives are the professional hedgers; they probably lose more than they gain but it becomes worth it when the unexpected strikes. It recoups company losses from operations. The US gov't must really be having budget problems. Short US dollars. Buy Euro Canadian and Australian.

07-29-2003, 09:04 AM	#14
Tom Sawyer Talk Freethought Staff Join Date: Jun 2002 Location: Toronto, eh Posts: 42,293	Well, this idea didn't last long: Pentagon Abandons Plan I can't believe it made it this far, though

07-29-2003, 09:37 AM	#15
theyeti Veteran Member Join Date: Jun 2001 Location: Denver, CO, USA Posts: 9,747	This was a pretty nutty idea. I can think of three major problems, all of which I think have been covered in one form or another. 1. Futures markets work when the traders have access to large amounts of information, and are able to analyze that information to make an informed "bet" on the likelihood of future prices. The Pentagon's idea in creating this market seems to be to hire a bunch of anaylsts for free. But like Ruy said, this assumes that independent analysts can do better than this insiders at the CIA, FBI, etc. Who has access to more information? Obviously the government spooks. Either the futures market will suffer from inadequate information, in which case it's useless, or its traders will have to have access to the same information as the CIA, in which case you've got a massive leak problem. 2. Those with connections to terrorism will find this easy to manipulate. They can make a bundle by betting on a terrorist act that they know will happen, or they can thwart intelligence by making it seem as if a particular act is going to happen when they know that it won't. Using this system to catch terrorists is unlikely, because the actual terrorists can be very far removed from those who are trading, and the traders can manipulate the market in so many ways that it would be difficult to find out who's doing it. 3. Acts of terrorism are rare events. They are not like weather phenomena that happen with some degree of regularity, they are capricious in their occurance. Whether or not one can predict a terrorist act with any degree of reliabitily by using this system depends critically on how predicatble terrorism is by its very nature. I would say it's not very predicatble at all, which makes futures trading little more than a crap shoot. Intelligence analysts are more likely to be misled by irrational tulip crazes than they are to gain useful intelligence. There are other problems that come to mind, but that's enough for me. This is such a harebrained scheme that only a dumbass like Poindexter could have come up with it. What is that criminal still doing in government? theyeti

07-29-2003, 10:30 AM	#16
theyeti Veteran Member Join Date: Jun 2001 Location: Denver, CO, USA Posts: 9,747	Oh, and in case anyone wants to read up on one of the many convicted felons that Dubya has appointed to high places, this page details Poindexter's involvement with the Iran/Contra scandal. theyeti

07-29-2003, 11:56 AM	#17
Jimmy Higgins Contributor Join Date: Jan 2001 Location: Proud Citizen of Freedonia Posts: 42,473	From the people who brought you Iran-Contra, the Election 2000 debacle, 9/11, and WMD's in Iraq that turn invisible, brings you perhaps one of the most sick and vile ideas ever conceived of by a popularly elected government (not that they were popularly elected). I can't even start to say how awful this is. Not only did someone have to actually come up with this idea to begin with, for who knows what, other people actually had to agree with it and think it was a good idea as well. And it got so far that they made a website?! If this doesn't prove they are evil, what would? The Daily Show will have a feast with this.

07-29-2003, 04:45 PM	#18
elwoodblues Veteran Member Join Date: Mar 2001 Location: Dunmanifestin, Discworld Posts: 4,836	Read about this earlier today. First impression: they're fucking nuts! Second impression: the system has some arguable benefits, but they're fucking nuts to have done this so ridiculously out in the public eye. Someone was thinking way the hell outside the box a few months ago. Good for them. I am very surprised, though, that the project got this far.

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