I'm not sure what I think of the terror futures market. Part of me agrees with everyone's reaction that it is sick and twisted. However, there's another part that thinks "finally someone trying something new that might help rather than just coming up with a new color of alert." Apparently the undground betting market on where the next suicide bomber would hit in Israel was a better predictor of where the next one would happen than any individual experts were. It's a different way to look at the problem, with a hive mind instead of a person's mind, and sometimes that works better.

As for the thing Alec quotes as a "good point." The futures market as it was described in the Times article explained that this was invite only and they weren't inviting terrorists. That wasn't an issue at all.

Incidentally if you would like to buy futures in weird future events, here's a good site to do so.