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Betting on hurricanes creating perfect storm

By Judi McLeod
Wednesday, August 31, 2005

Toronto--With handheld betting devices making even poolside wagers possible, a new future market predicting where hurricanes will hit has opened.

A trio of University of Miami professors is trying to take over the local weatherman's job. The three are betting on a new way to predict where a hurricane will hit. Their approach may not be as orthodox as Walter the Weatherman, but they believe their way could help people living in hurricane alley decide whether or not to evacuate.

"The three have founded an electronic futures market that allows the public, students and trained forecasters to invest in shares representing selected coastline spots where they think the hurricane will strike. Those who forecast most accurately will get a payout." (AP, July 19, 2005).

The hope is that investors, because they have a financial stake, will draw an accurate consensus on the storm's path–much like bettors predicting the outcome of a horse race or football game.

But betting on horses is not the same thing as betting on human misery.

Payouts for Hurricane Harry gambler types while people have lost all they have to the whim of Mother Nature are not looked at kindly by some.

Among the strongest critics of the not-so-absent-minded professors are top meteorologists, who feel forecasts should come from a source the public has come to trust, the National Hurricane Center.

"I don't view it as a game," said David Kelly, a Miami associate professor and economist. Along with David Letson, a fellow economist and associate professor, and David Nolan, assistant professor of meteorology, he developed MAHEM, short for Miami Hurricane Event Market, with help from trading specialists at the University of Iowa.

"The point is to use markets as a way of collecting and processing information, about where a dangerous storm will strike", Kelly said. "The National Hurricane Center bases their prediction on just three or four models." With the futures market, "information from many, many models brought in to help figure out where the hurricane is going to land," he continued. "The hope is that this will be much more accurate."

Over at the National Hurricane Center, Director Max Mayfield was fuming.

For years, the center's database of storm-related information has been "vitally important" to emergency response centers along the coastline, Mayfield said.

"You'd think if they were serious, they would have contacted the director of the National Hurricane Center, but nobody's called me," he said.

Hurricanes are serious business to the director. "One thing I want to be very clear about," he said, "Forecasters are not allowed to dabble in this sort of thing.

Perhaps the Miami trio should go back to Meteorology 101.


Canada Free Press founding editor Most recent by Judi McLeod is an award-winning journalist with 30 years experience in the print media. Her work has appeared on Newsmax.com, Drudge Report, Foxnews.com, Glenn Beck. Judi can be reached at: judi@canadafreepress.com


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