Terrordaq: Put your money where your paranoia is
Column
WITHOUT BORDERS
KEN WIWA
Signed Freelance

02 August 2003
The Globe and Mail
A13

I don't know if it is just the residual traces of an old gambling habit, but
when everyone was frothing around the mouth this week about the Pentagon's
proposal to launch a futures market in terrorism and assassination, I saw
things a little differently.

By now you've probably heard and read all the fulminating sermons against
the Policy Analysis Market (PAM), which would have allowed insider
speculators to make money with accurate predictions of terror strikes.
“Terrordaq,” as it has been christened in some quarters, was the
brainchild of retired admiral John Poindexter — yes, him: the man whose
conviction and jail sentence for deceiving Congress in the Iran-Contra
affair were later set aside, the man who resurfaced earlier this year as the
director of the U.S. Defence Department's Information Awareness Office.

As I understand it, the IAO is another one of those jobs for the good 'ole
boys dressed up as a government agency of the Bush administration. It's a
subunit of the Defense Advanced Research Projects Agency (DARPA), formed
after Sept. 11, 2001, to gather intelligence on possible terrorist
activities. Terrordaq was the IAO's idea.

To me, Terrordaq actually makes sense, especially when you consider that
almost everything under the sun in our global economy has become a game of
numbers, vulnerable to the usual suspects — the racketeers, profiteers,
insiders, market makers and manipulators. Is it really that much of a
stretch that someone, somewhere would eventually set up a futures market in
terrorism so that we could assess the likelihood of the King of Jordan being
overthrown, Yasser Arafat being assassinated, or of being attacked by
missiles from North Korea?

These were some of the markets rumoured to be offered by PAM. But we can't
check what was actually on offer any more, because the PAM Web site was shut
down last week after howls of outrage from U.S. politicians.

“The idea of a federal betting parlour on atrocities and terrorism is
ridiculous and it's grotesque,” Oregon's Democratic Senator Ron Wyden
howled at the news conference that effectively torpedoed PAM.

As usual, the Democrats' rage against the Republican machinery was another
example of leaden-footedness. While Democrat senators Wyden and Bryon Gorgon
might have scored a cheap point, they should have been looking at the bigger
picture.

For one thing, while PAM was live on the Internet, gambling on it was, for
the initial stage at least, actually restricted to a few eggheads and
commentators with insider contacts, and not the general public — nor
terrorists.

The idea was that these market shapers might offer policy-makers a better
assessment of trends than those bumbling, uranium-obsessed folks at the CIA,
for instance.

Aside from the fact that Terrordaq might simply duplicate more U.S. security
data for us to ignore or “sex up,” I'm trying to see how a terror market
is actually different from all the other markets and indicators that
effectively do the same job of offering clues about the future. Besides, it
might prompt the Democrats to look more closely at those rumours that
somebody with access to privileged information in the U.S. government
machinery dumped stock in United Airlines and American Airlines immediately
prior to 9/11.

As for its amorality, how is PAM different from conventional markets? Didn't
the NASDAQ rally after Uday and Qusay Hussein were killed? I bet you, too,
that somebody somewhere is probably factoring such events into a scenario,
road map or election strategy.

Besides, we already have plenty of Web sites that offer this kind of futures
market. One, www.tradesports.com, has been running markets on the survival
chances (professional or otherwise) of Saddam Hussein, California's Governor
Gray Davis and even Kobe Bryant. Mr. Poindexter should have kept an eye on
this Web site; on it, there was a market on the likelihood of his surviving
the PAM fiasco (he didn't — he has resigned from his civilian position in
the Pentagon).

As aficionados of markets will tell you, you can't buck the market. Every
rookie commodity trader knows that the orange-juice futures market has a
better record of predicting the weather in Florida than traditional weather
forecasts do.

All of which raises the possibility that at some time in the future, the big
political decisions will be taken on the basis of market trends and
analysis. Wait a minute, we're already there.

See how President George W. Bush's approval ratings are down to 56 per cent?
Now, what would the capture or assassination of Saddam Hussein do for those
numbers, I wonder? And when would be the best time, strategically, to play
the ace of spades? My guess is that someone, somewhere, is counting the
cards . . . .

Now, I'm not suggesting that the fate of Saddam Hussein is linked with
President Bush's approval ratings. But I if were still a gambling man, I
wouldn't discount the idea . . .

wiwa@dial.pipex.com