Betting on Terror - 2nd attempt

money.cnn.com/2003/11/17/news/te … tm?cnn=yes

Sad. :?

Capitalists are not known for their morals.

Oh please. Much ado about nothing.

Futures markets might be a good way to measure something like terrorism because the subject evokes such emotionalism on all sides. People who work in the market for a living, and whose decisions put their own money at stake, might be better prognosticators of these kinds of events than even scholars who have spent their entire professional lives studying the subject. I don’t know. But it would be worth finding out.

What is it about leftists that makes them become outraged at a research project involving markets and terrorism, and yet they can’t wait to come up with any justification to excuse the terror itself? They have this fishy moral equivalance that believes a market on terrorism is immoral, but the terrorism itself needs to be understood.

Rascal’s comment also overlooks the (surely obvious) point that a proper market for terror, if it turns out to be viable, would allow firms to hedge against terror attacks. This might reduce the risk of doing business in some countries, raise investment in those countries, increase wealth and stability.

Now, these markets are a long way off being perfected and indeed may never be viable.

But to turn your nose up at them without thinking is just a knee-jerk reaction from people with no knees.

Who are you calling a Leftist and on what grounds?

Who are you calling a Leftist and on what grounds?[/quote]

Rascal and you. The grounds for Rascal are numerous and not worth going over.

As for you…“Capitalists are not known for their morals.” Enough said.

Yes, I’m more “Leftist” by Merriam-Webster’s definition

Nor is that a bad thing.

Still I marvel that you feel that a person’s views can be so easily pigeonholed.

[quote=“Closet Queen”]Yes, I’m more “Leftist” by Merriam-Webster’s definition

Nor is that a bad thing.[/quote]

Yes, you should embrace it. It’s you.

People are pigeonholed all the time and rightly so. It’s a marvelous type of shorthand that allows us to apprehend a complicated situation and make sense of it. And it’s usually pretty accurate.

Everyone likes to think they are special, that their thoughts are so unique that no one else can fully comprehend the brilliant individuality of that person. That’s bullshit. The truth is almost the exact opposite: 99% of people’s views are banal and poorly supported, and a well-trained scholar in the appropriate subjects or a pollster could take a few facts from one’s life like income, age, gender, marital status, nationality and region of the country you were born in, and create a construct that accurately predicted what one would say about most important topics.

Can’t you predict those risks without such a market, i.e. are there no other means? Do we really need to speculate on such incidents?

Awaiting your professional explanation on the matter.

Can’t you predict those risks without such a market, i.e. are there no other means? Do we really need to speculate on such incidents?

Awaiting your professional explanation on the matter.[/quote]

  1. Its not a question of prediction. No one can predict them. There may be data on the likelihood of attacks and the effect it has on profits that could allow such instruments to be properly priced to refelect risks and costs
  2. In current markets, you could produce some kind of hedge but it wouldn’t be anywhere near perfect - maybe hedging using the oil price, but as we have seen, even that need not be much affected for as long as profits are - and it is too influenced by other global factors (economic growth, etc)
  3. Therefore, if a specific market can be developed, then better, more specific hedges could be developed and a more efficient way could be found to hedge your risks.
  4. Notice, this has nothing to do with speculation - only to do with hedging. however, if speculators are required to make the market liquid enough to perform its beneficial function, then so be it.

One thing that is required is for there to be natural sellers and buyers of the contracts - businessmen and portfolio managers may want to hedge the risk of lower profits because of terrorism, but who would want to hedge the risks of lower profits in the absence of terrorism?

I can think of some examples, but that seems to me to be the main problem.

That was my mistake for misleading Rascal. Like a person who sometimes lazily writes “cause” when he means “correlation”, I wrote that the people working in this futures market for terrorism “might be better prognosticators” than scholars who study terrorism. I should know better than to write something like that.