George W. Bush visiting Chicago Mercantile Exchange via Wikipedia
Can you beat the weather forecasters? Chicago Mercantile Exchange introduced futures contracts on rain a few days ago. The Merc, maybe best known for offering agricultural commodities and futures, ”already sells futures for temperature, frost, snow; even hurricanes”, according to this Marketplacereport.
“As the Merc’s Tim Andriessen told Marketplace, “There’s really no science or art in terms of long-term forecasts so that uncertainty is actually what makes an opportunity for products like this.” Andriessen argues that “any business affected by weather — from farms to concert venues — could find rain futures beneficial. If that concert is rained out, the organization running the show could still make money.””
Full post from Freakonomics: If You Can Bet on the Rain, Watch out for Rainmakers.
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