Nelson on Markets

Tradesports.com has a futures market open for when Saddam Hussein will leave office. Tradesports CEO John Delaney says his firm is not a bookmaker, it's a futures market, and odds here are more reliable than "experts" because it is a consensus of worldwide opinion from people putting their money where their mouth is. There's something to that, says FORREST NELSON, a University of Iowa economics professor and a pioneer in political futures trading modeled after the markets that trade winter wheat and hog bellies. His markets have focused on presidential elections, and he says they have been more accurate than polls since 1988. About $150,000 changed hands during the 2000 election, said Nelson. He said the Commodities Futures Trading Commission 10 years ago ruled that his markets were not legal but were "not against the public interest." He said they allowed him to continue if he did not charge commissions. "There's a very fine line between what is gambling and what is not," he said, adding that the markets have a certain "social benefit." "One may argue that it's important to know when we go to war," he said. Nelson said the Department of Defense has talked to him about performing studies to see if markets can predict wars or other geo-political events better than analysts. "What if we had a market for terrorist attacks in existence in September 2001?"

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