I read an interesting, albeit a little morbid article from http://economics.about.com/b/2003/07/30/a-futures-market-on-terrorist-attacks.htm on a proposition of a program to induce a futures market based upon the probability of a terrorist attack on certain locations. In simpler terms, an idea was created to have people make bets upon the chance of a terrorist attack happening. Although the idea seems strange and morbid, I have to agree with the author that it may help in reducing the threat of terrorism. Futures and options markets are highly efficient, and are usually good predictors of where the stock market is heading. If a futures market existed for say, the risk of a terrorism threat to the Pentagon, it could help the CIA and Homeland Security understand the reason for the escalating risk, and ultimately reduce the risk. A problem I see with the program is the difficulty in assessing the dangers of a terrorist attack. The futures market is very efficient because stock market investors have access to an enormous amount of information on individual stocks. Terrorist threats obviously don't have balance sheets, income statements, dozens of financial ratios, etc. to accurately assess risk. Well anyway, this program was eventually denied, but perhaps it should be given a second thought, if we can find a way to fix the problems.