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Analog magazine had a story (maybe a "Probability Zero") about the same idea applied to the weather.
The problem there, as with the problem in using it for terrorism prediction, is people tend to cheat. Now, if you use pari-mutual betting, there's not much profit in bombing a place like Manhattan or D.C.(because everyone's expecting it). But watch out in East Bumfuck, KS, that ten-million-to-one shot.
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