Of the 266 Google news links about Policy Analysis Market this morning, most of the headlines trumpet "Defense Department Taking Terror Bets." Policy Analysis Market is an attempt to use the wisdom of markets to predict crises and attacks in the Middle East. The organizations behind the project include the Economist Intelligence unit, the Defense Advanced Research Projects Agency (they funded the original Internet), and Net Exchange, a spinoff from the California Institute of Technology devoted to commercialize " computational combinatorial deal-making (CCDM)." PAM states this about the whole concept: "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 Policy Analysis Market (PAM) refines this approach by trading futures contracts that deal with underlying fundamentals of relevance to the Middle East. Initially, PAM will 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." What is controversial is that market futures about "the overthrow of King Hussein of Jordan" were included and have offended politicians here in the US and undoubtedly in Jordan, Saudi Arabia, etc. . Others are upset that a trader can actually make some money if he/she predicts fairly accurately. Trading starts October 1, 2003, and you can signup now. There will be a cutoff after 1000 registrants, and while they hope to have a globally distributed network of participants, what if a significant number were nettime readers? I first ran into this market concept about ten years ago. The Iowa Political Stock Market successfully predicted the outcome of the 1992 U.S. presidential election within a few tenths of a percentage point for all three candidates (including Perot). It was more accurate than 8 major polls. Since then there have been many other experiments with other markets: Hollywood Stock Exchange where people bet on future box office receipts and Foresight Exchange where traders bet on the outcomes of unresolved scientific and societal questions. http://www.hsx.com/ Hollywood Stock Market http://artificialmarkets.com/ Articficial Markets http://www.policyanalysismarket.org/ Policy Analysis Market