Last week the big news was the Associated Press’ Twitter account getting hacked and the stock market taking a 150 point dip on the ‘news’ of the bombing that injured the president.
The markets recovered quickly but I know my first thoughts were:
- Someone has shown just how fragile the markets are to any kind of news whether it’s real or not
- Someone just got very rich on this deal
- This won’t be the last time something like this happens
Well, the investigations are underway as to who might have profited from this scenario and if there was a connection between the incident and the any profits taken as a result of what’s known as “high frequency trading”.
Could the global economy hinge on 140 characters?
That is the question the financial industry and government regulators are trying to answer after a Twitter hoax on Tuesday that claimed President Obama was injured in an explosion at the White House. That report caused the Dow Jones industrial average to drop temporarily by 150 points, erasing $136 billion in market value.
How can such a thing happen? Well, decision made last month opened the door for something like this and it didn’t take long for someone to possibly use it to their advantage. the article continued
The vulnerability, in part, stems from the Securities and Exchange Commission’s decision this month to let companies and executives use social media sites like Twitter and Facebook to broadcast market-moving news.
Apparently the folks who are making these decision are a little bit disconnected from the realities of the online world. Just a quick study of SEO and black hat techniques used to gain traffic in a less than ethical or moral fashion could give a glimpse into the mindset of the online world.
Now multiply that mindset by, oh let’s say 136 billion, and you get what might be termed as ‘black hat social media’ at best and outright criminal activity at worst. It’s this straight-forward (which is not to be misconstrued as easy). Hack an account that can influence markets, put out some awful sounding ‘news’ that would tap into how markets REALLY work (emotion) and you have a formula for some serious situational buying and selling that could net a small (or huge) fortune in minutes. The possible wreckage in the aftermath? That’s for the commoners to clean up.
Honestly, of this was not foreseen as a possible scenario that would play out with the SEC’s decision last month then the folks in control are even dumber (or at least more ignorant) than most of us would assume.
As Internet marketers we have seen it for years where one piece of information, or misinformation, can have damaging short and long term impact on reputations which can ultimately crush a bottom line. Why should we act surprised when someone does it in the markets that are primed for this kind of thing due to their nearly fully electronic foundations?
This should serve as a cautionary tale to to everyone but it won’t. Why? Because along with shorter attention spans of the Internet Age also comes much shorter memories. This ability to quickly forget things will only doom them to occur over and over again.
Doom and gloom? Maybe but I don’t really think so. It’s just common sense. There will always be criminals and when new avenues are opened for them to accomplish their chosen mission they will go down them. Why wouldn’t they?