I WIN!

Place.

Show.

fark THE CAPITALIST BOURGEOIS SYSTEM!

Why must everything be a future's market?

weather controling...from the moon?
moon base alpha and mood base zappa?
1 MIIlllionn dollars.

macabre:
I hope you are joking.

Isn't this just basically a really boring form of gambling?

We need to see if Clarence Beeks can get us a peek at the weather forcast.

Cool.

It doesn't have to be gambling. A Florida orange-grower worried about an early frost can buy a future "betting" that frost will come, cutting his losses in the case that it does.

It's gambling about as much as purchasing Life Insurance is.

DOES FARK KNOW WE CAUGHT HUSSEIN?


Now lets get the guy who did 9/11, Bin Laden.

kevinatilusa
Good point. The county I live in produces more oranges than all of California, every grove owner I now hedges his bets with futures.

Score! Two approved submissions in a row!
This one and the gambling/ESPN2 one are both mine.
I feel so nice.

It's gambling about as much as purchasing Life Insurance is.

No ... you always die ... weather is variable

I guess I was referring to any particular term of life insurance. Do you buy life insurance for the current month, or wait off and save a month's premiums? People buy it now to hedge their bets.

PlumsDeify
Congrats!

Weather futures, eh? I'll double down on snow, and a tip to the dealer for some icy rain.

Life insurance is gambling, only it's the insurance companies who are betting.

rbuxby: We're past that. Keep up.

Wasn't this a seinfeld episode? Where they bet on the temperatures in different cities?

rbuzby, no, really?!

/sarcasm

So maybe instead of buying a future, he should just buy general crop insurance.

nytmare
Orange trees are not destroyed by a frost, only the oranges. If the oranges are frozen during winter, then they are used for orange juice, thereby driving up the price of oranges. Hedging with futures can turn a good profit, if there is a freeze.

Now lets get the guy who did 9/11, Bin Laden.

Right on. I'll check Slashdot, you go over to somethingawful, and we'll meet back here in an hour to compare notes.

"This market is an excellent way for players to hedge their weather risk, because it completely isolates the weather as a factor," said Felix Carabello, associate director of industrial commodities and head of weather futures at the CME.

"But the market also represents the aggregate viewpoint of all its participants and is therefore a good indicator of what people believe the weather will do," he added.


That is quite possibly the stupidest thing I have ever heard in my life.

The Symbol
Wasn't this a seinfeld episode? Where they bet on the temperatures in different cities?

I was thinking about the one where Kramer and the Texan are betting on arrival times at the airport.

AhGodUSmellThat
Thanks. I was sorta expecting expecting a flame. I think my success resulted from using taglines everyone could agree on rather than my usual biased/partisan/inflammatory failed submissions.
/making too much of this
Thanks again.

kevinatilusa: It's gambling about as much as purchasing Life Insurance is.

Life insurance is you betting the insurance company that you are going to die. Auto insurance is you betting the insurance company that you are going to have a wreck. All insurance is gambling.

PlumsDeify
I tried for a flame but macabre did not respond. I guess he was joking after all.

It's not good sarcasm if you have to tell people. Or it's not good to tell people it's sarcasm. Or it's not people...never mind.

As we all know, sarcasm is pretty farkin' hard to communicate via text.

Nothing? Not even a bite? Nobody gets my reference?

Son of a biatch, I guess it's time to end my life, Gomer Pile style.

Not new at all, Enron was doing this (successfully and law abidingly) several years ago. as kevinatlusa illustrates, weather derivatives act more or less as an insurance policy for so that weather-sensitive businesses can hedge against risks. If you owned a ski resort, and you feared a snowless winter, you could protect against that loss of income by buying in now. In its day, Enron had more PHD meteorologists working for them than the national weather service, trying to build a better forecast model. Of course, gaming the California electricity market proved to be way more profitable than farting around with weather insurance.

I'd like $50 on Cold to show

You guys are joking about it but I worked at the CME and traders used to make side bets on how much snow would fall in a given month. Example:

Trader 1: What's Dec snow? (Translation: what's your two-sided market for the number of inches of snow in downtown Chicago for the month of December as certified by the Nat'l Weather Service?)

Trader 2: Ahhh, I'll make it 17, 20 (Translation: I'll say at least 17 inches and no more than 20.)

This is the kind of stuff you do if you're under 35, have more money than sense, and are quite literally willing to bet on the weather. One story I heard about some currency traders in New York had a few guys so outraged by the official reading that they were sure that someone had corrupted the Manhattan office of the Nat'l Weather Service with a bribe.

But the real weather contracts have a legitimate business purpose. If you have adverse financial exposure to lower temperatures (mainly for farming, but it can also affect other businesses) then you sell short on temperature futures and your losses due to bad weather are offset by gains in the futures market.

Futures and options markets have been used for hedging risks on temperature, rainfall, "catastrophic events" (e.g. hurricanes and earthquakes), and pollution credits among other things. If they can get a statistical edge, traders will gamble on ANYTHING.

P.S. Marak: Hank Scorpio's picture is particularly ironic for this story because the CME's computerized trading market is also called Globex

This seems like good business rather than amusement...

If you think about it, any agricultural futures are kind of the same as weather futures... If you buy, let's say, wheat futures, you're effectively gambling that there won't be a cold snap that'll kill off the wheat. Although there are many other factors that affect whether your agricultural future will pay off, weather is definitely a factor.

Investing in oil to heat peoples' homes (as the article mentions), as well as investing in stock in companies that sell heating equipment (or, conversely, air conditioning), insulation (including double-paned windows), and other products that would be affected by weather.

Pyyyyllleee!

I hope DARPA isn't involved in this futures market.

The Flash will sort out the Weather Wizard and the other members of the Rogues Gallery.