In October 2002, Goldman Sachs and Deutsche Bank __1__ a new electronic market for economic indices that __2__ substantial economic risks, such as nonfarm payroll (a measure of job availability) and retail sales. This new market was made possible by a __3__ rating technology, developed by Longitude, a New York company providing software for financial markets, __4__ the Parimutuel Digital Call Auction. This is “digital” __5__ of a digital option: i.e., it pays out only if an underlying index lies in a narrow, discrete range. In effect, Longitude has created a horse race, where each “horse” wins if and __6__ the specified index falls in a specified range. By creating horses for every possibl __7__ of the index, and allowing people to bet __8__ any number of runners, the company has produced a liquid integrated electronic market for a wide array options on economic indices.

　　Ten years ago it was __9__ impossible to make use of electronic information about home values. Now, mortgage lenders have online automated valuation models that allow them to estimate values and to __10__ the risk in their portfolios. This has led to a proliferation of types of home loan, some of __11__ have improved risk-management characteristics.

　　We are also beginning to see new kinds of __12__ for homes, which will make it possible to protect the value of __13__ , for most people, is the single most important __14__ of their wealth. The Yale University-Neighbourhood Reinvestment Corporation programme, __15__ last year in the city of Syracuse, in New York state, may be a model for home-equity insurance policies that __16__ sophisticated economic indices of house prices to define the ___17__ of the policy. Electronic futures markets that are based on econometric indices of house prices by city, already begun by City Index and IG Index in Britain and now __18__ developed in the United States, will enable home-equity insurers to hedge the risks that they acquire by writing these policies.

　　These examples are not impressive successes yet. But they __19__ as early precursors of a technology that should one day help us to deal with the massive risks of inequality that __20__ will beset us in coming years.