A controversial new trend in futures markets is the buying and selling of so-called "terrorism futures". These are contracts stating that a particular act of terrorism (for example, that a particular embassy in Tel Aviv will be bombed before June, 2004) will occur. If you hold such a future and others believe this will occur, they will try to buy and/or create similar futures, driving up the market price of your future.
The origin of this seems to have been the PAM project, funded by DARPA, originally conceived by John Poindexter, a national security adviser from the Reagan regime. PAM ran such a market, for events in the Middle East. Why would the US DoD be selling futures like this? Quite simply because time and time again, the predictions of futures markets have been much more accurate than the predictions of any group of experts.
The buying and selling of futures for events isn't just limited to terrorism - a group called the Hollywood Stock Exchange has been doing the same with the success of new movies since December 1997. HSX has since spun off several subsidiaries and programs, including HSX Research, a subscription-based market research service, with predictions based on their markets. According to The New Yorker magazine, HSX correctly picked 35 of the 40 Oscar nominees in the eight biggest categories.
While effective, many believe these terrorism futures to be immoral. They are betting on horrific acts, in effect hoping they will occur. Senator Tom Daschle has gone so far as to say they are "an incentive actually to commit acts of terrorism". Then again, life insurance is essentially the same thing. Another suggested problem is that terrorists themselves may bid up certain futures, in order to provide disinformation.
All said, this is currently in the research phase. And to prevent any research (think stem cells) on questions of morality is generally a bad idea.
Major Sources:
Wolfers, Justin and Zitzewitz, Eric. "The Furor of 'Terrorism Futures'", Washington Post, page A19. http://www.washingtonpost.com/ac2/wp-dyn?pagename=article&node=&contentId=A5696-2003Jul30¬Found=true
Shachtman, Noah. "The Case for Terrorism Futures", Wired News. http://www.wired.com/news/politics/0,1283,59818-2,00.html
"The Terrorism Futures Market is Immoral" and "Wait, Let's Talk About This". Opinions, The Tech (MIT student newspaper).