We wanted flying cars, instead we got 140 characters crashing the markets
rocketmill.co.uk
rocketmill.co.uk
I guess other people made mistakes. MS didn't think the Internet was important early enough; they didn't make Encarta available sensibly; MS was deeply unpopular with a sizable section of the population.
Other people got stuck in a reference library mode - and thus they concentrated on selling DVDs to libraries rather than making access public.
I will, grudgingly[1], admit that Wikipedia is amazing. Probably a Wonder of the World.
[1] I actually hate it, and try to avoid it where possible. If I had the money I'd fork it and create a lower-cruft, more accurate, closed for edits, version. Every article would have a 3 sentence 'elevator pitch' style introduction. Sourcing would be fixed. And the focus would be on "accurate", not "verifiable".
That always blows my mind.
I was a teenager back then and it all happened so gradually I didn't understand until later what I had witnessed. (Then came some dark years of webspam before Google. Web rings were a good way of navigating. : )
Unsolvable?
You aren't allowed to fly them at night, or over any populated area. They can't have more than a single seat. They have severe weight restrictions that mean you can't take much in them besides yourself. (Note: the previous few sentences describe the US regulations; other jurisdictions are different but all have similar kinds of restriction.) You can only travel to and from places that have a substantial length of runway for takeoff and landing.
Do you really find it difficult to imagine why someone might not find an ultralight aircraft a suitable replacement for their car?
Simple way of phrasing it, you cannot fall off the earth, you can fall out of the sky.
Also, why do we want flying cars? Is it just because they're cool or because we want a faster commute and less traffic. Maybe we can get those effects from ground based robotic cars. I think that might not be that far off.
[1] http://www.nytimes.com/2008/09/08/business/worldbusiness/08i...
The problem the article highlights will self-correct. Twitter is a good additional news source because it is unfiltered and because of the multiplicity of sources, although we need to adapt to taking news in this form. I wouldn't buy or sell stock, or do anything drastic based on one source. Logic dictates that if the White House were bombed, lots of people on the ground in Washington DC should also be tweeting about it. As we become more savvy, Twitter's influence (the problem according to the OP) will actually be more of an asset. It probably already is.
To me the real observation is how a relatively small act can have a massive impact on the world. The tweet is a small glimpse of the devastation such an attack could have on us. It was a 150 points for a 140 characters, what would live video of the aftermath on CNBC done? It demonstrates the power of asymmetric warfare, and explains a bit of the concern that folks have around "cyber" threats. Hopefully, this incident is a wake up call to Twitter and AP to improve their security.
Imagine if someone hacked CNN or BBC's Twitter account and posted stuff like:
1. North Korea launches nuclear missile targeting US 2. US launches air attack on Iran
How would those remarks affect the markets?
1. Does this incident indicate the influence of Associated Press on markets?
or
2. Does this incident indicate the influence of Twitter on markets?
How did we end up using such easy to manipulate sources of information to have so much influence in our high frequency trading algorithms?
That’s not to say Twitter as a whole isn’t changing the way traders get their information. A Twitter feed with select authors is being integrated with Bloomberg terminals[1], we learned a couple of weeks a go.
As for high frequency trading, that is certainly a part of the problem, just as online security and sloppy reporting. I’m very much in favor of a financial transaction tax added to every trade to discourage high frequency trading[2].
[1] http://venturebeat.com/2013/04/04/wall-street-meet-twitter-n...
[2] http://blogs.reuters.com/felix-salmon/2012/08/06/chart-of-th...
A financial tax is laughable. That would truly impede market efficiency, a much better approach would be to mandate a minimum holding time of each order in the ELOB say 1000 micros before it can be amended or canceled.
This is hardly a new idea, and it is clear the system needs to be improved. From Wikipedia:
“Keynes was among the first proponents of a securities transaction tax. In 1936 he proposed that a small tax should be levied on dealings on Wall Street, in the United States, where he argued that excessive speculation by uninformed financial traders increased volatility. For Keynes, the key issue was the proportion of 'speculators' in the market, and his concern that, if left unchecked, these types of players would become too dominant” http://en.wikipedia.org/wiki/Financial_transaction_tax#Secur...
You could argue that High frequency traders and other hedge funds might be a problem for the market but to lump the market makers in with the high frequency or even prop shop funds i think is being a little harsh to them.
What don't you like about the lowly market makers? Hell the Canadian option market would be a lonely place without them:)
A large part of his failure is assuming his so called "dominant financial speculators" and the government overall or at least the financial regulators would not simply merge, which they've done. Therefore even if his tax was a good idea instead of an inherently dumb one, rather than being implemented correctly it would just be another crony capitalism weapon probably wielded exclusively as a club to pound down the "wrong" people, it would hardly be used to control the dominant financial speculators because they're the guys who purchased the elected officials to begin with!
Not to mention massive compliance overheads and loss of efficiency in the middle office. Such a tax could in theory only be implemented on lit exchanges! More volume would move to the dark ATS'S/ECN's and Crossing networks. Shit people would just internalize and cross order flows and never actually execute a "trade". Making your solution pointless.
Keynes hahahahaha.
With regards to Bloomberg terminals, I am aware of their Twitter integration but again I question their decision. Twitter is not a reliable source of information, particularly for financial markets.
If they go ahead with this, organized criminals and crackers can stage such attacks to make huge profits in minutes - buy low, sell high.
It is extremely likely in the future once/if "everyone knows" twitter (and/or AP) is nothing but spam/scam, then it'll be ignored for financial news.
I wouldn't worry too much about the ecosystem having crooks, they've always been there. I would worry if they're scientifically proven to be getting out of ecologically sound ratios.
Wtf, why? High frequency trading doesn't hurt anyone. If the HFT end up making bad trades, they lose money to the people that don't.
A hacked Twitter feed is only as good as the entity it represents. Once you have the credibility, it's probably the fastest way to spread the story to people too lazy to check it's validity.
There are news services that are dedicated to delivering important information that could affect markets as quickly as possible. I heard the news from one of these services directly before the market seriously dropped. The important question is why the markets reacted the way they did. There seems to be a sentiment that these sorts of moves are catastrophic and avoidable, but the reality is that these are movements reacting to real information from the environment that will affect the future state of economics. When bad news develops, more efficient markets drop faster in anticipation for this current or future event. This means that the information, or the bad event, has been diffused among the population.
With the AP situation, the news of such an extreme terrorist act would surely cause unbalance throughout Western economies; disrupting peace, supply chains, and many companies. This would have a direct impact on equities like the DOW. Within two minutes of the fake tweet, it was reported as being fake and the markets rebounded. In fact, I would guess that the majority of people hurt by this volatility spike were market making or algorithmic traders. They either were directly linked to twitter text feeds, selling on the way down and buying at the top of the retracement; or dump positions put on earlier in the morning. Of course, if the event happened, these traders would have been the winners.
The problem with this current situation is that the high-speed news delivery services spread this fake tweet without any verification (except trust that the AP feed is trust-worthy), and people with direct access to these services were most likely individuals with access to trading accounts, allowing them to drop a variety of assets, most notable the DOW or S&P.
Much like the endlessly rotating wheel of IT fads, the economy rotates around a cycle. Currently "we" (for some definition of "we") are in a pretty intense melt-up era which is at the end of a growth period. Low trading volumes, irrationally almost insanely high equity prices given technical stats, etc. Meltups always precede meltdowns. So the market is strongly prepared to drop and the slightest garbage news causes a momentary drop. This isn't a "story" or a "surprise" its just part of the endless cycle. Rather soon we'll have a real substantial drop, a moderately deep recession, then recovery, growth, etc. Well, at least in the past we've always recovered so we probably will again, or even if main street never recovers (like last time) wall street surely will recover... eventually, at least nominally (aside from inflation).
Now if this happened at a different point in the economic cycle, perhaps near a market low, rest assured nothing interesting would have happened, at least in comparison. That doesn't mean certain unrelated things are suddenly less relevant like twitter social media or AP mainstream media or HFT (What does HFT have to do with this other than being the current bogeyman for the financially intentionally ignorant and/or rabblerousers?)
A tolerably good engineering analogy if you understand the 4-cycle internal combustion engine cycle, sometimes it pings under really intense conditions. That ping doesn't carry relevant moral and ethical considerations of relative shifts in societal importance quite as much as the ping happens because out of the four cycles of a 4-cycle engine, its near the top end of the compression cycle and under intense load/operating conditions. Do the same "stuff" during the intake cycle and you don't get a ping (please no bad analogies to old fashioned carburetor backfires). My car engine pinging cares little about the relative importance of twitter vs AP and a lot more about current conditions WRT the IC 4-cycle.
1) That game is about being fast and first.
2) The finance world loves to try and predict the future from the past.
A technical person likely tempers his/her trust in Twitter with some understanding of it and concludes that false Twitter news is likely/inevitable.
A trader looks for a precedent of market movements caused by false Twitter news and concludes that a lack means a future occurrence is terribly unlikely.
On the other hand, one of the things I'm constantly surprised at, when I look at old sci fi, is how very little of the way the internet has changed society was anticipated. Even in stories where they clearly have instant point to point communication and powerful computers, they don't use it like we do. We have instant access to the sum of human knowledge. Forums, chats, wikis, teleconference meetings with arbitrarily bright experts! And it seems to be accelerating.
Sometimes when our internet goes down, I complain about being cut off from the hivemind. I'm only half joking.
(Some probably were affected due to stop-loss orders, but those simply should not be used-- index mutual funds are a perfectly good way to gain equities exposure.)
I have one of the best encyclopedias in history at my fingertips. Not only is it free and translated into numerous languages it is also searchable and interlinked. If I want to read about Aaron Burr, or the Second Congo War, or spherical harmonics it takes a fraction of a second to bring up an article. And that's been my habit for the last several years, to look stuff up, to find out facts when curiosity strikes. No doubt many other people have developed the same habit, how has it changed the nature of the world?
Meanwhile, I can discuss topics of endless variety and depth with people from all over the world. I have personal friends who live all over the US and other countries. When a friend of mine went to Australia for business recently the biggest problem in keeping in touch was merely the time difference.
I can loan money to people all over the world through microfinance sites like kiva.org. I can directly support the advancement of the developing world in a very personal, very concrete way.
The internet makes direct support of artists and artisans not just practical but downright advantageous for most creators. Whether it's amazon or a personal webstore or etsy or kickstarter or indiegogo, I can find people whose work I enjoy and I can put money directly in their pockets with much less overhead and intervening red tape than has ever been possible before. And this has led to many artists and creators being able to live off of their work and spend more time on their work who would never have been able to before the internet.
In the next 2 or 3 decades something quite remarkable and unprecedented will happen in our world. Our world will become connected. All of it. Not just the 1-2 billion people who have access to the internet today. Everyone. The developing world, people living in backwater failed states, everyone. From the arid depths of Mali to the mountains of Tajikistan to the hustle and bustle of Mumbai to the slums of Manila, access to computers and to the internet will be nearly universal. This may seem unlikely from the perspective of today but it's right smack on the path of technology and economics, it's pretty much inevitable. This alone will lead to a significant inflection point in the development of the poorest parts of the world, likely accelerating development in ways we can't even imagine today. But it will also lead to a profound change in character of the world, in the information that people have available, etc.
And it will happen not because of the diligent work of NGOs or of UN special offices or of foreign aid. It will happen because things like twitter, facebook, google maps, and so forth created an overall smartphone landscape which was enticing enough to cause the wealthiest people in the world to spend considerable amounts of money buying smartphones. And in the process subsidizing the development of the core technology of the most easily mass-produced and most intuitive to use computing devices in history. Smartphones and tablets are just a handful of chips, a battery, and a screen, they have fewer components than any other computing device and each component is immanently vulnerable to amortization of fixed development and manufacturing costs. The chips and screens of today that go into a several hundred dollar device will over the next few years and decades drop by an order of magnitude or more in cost, putting such devices within the grasp of even the poorest people in the world.
And we are only now at the very earliest stages of this revolution in computing and its impact on the world. This is a monumental event on the scale of the invention of agriculture, it is a turning point in human civilization. And even though it is happening right in front of our eyes many people are incapable of noticing.
He uses the Internet to spam me with videos about how we didn't land on the moon. And a bunch of weird ones about a gold mountain found in the Euphrates that means the end of the world as we know it is coming soon. So much for technology made possible by the wealthiest.
I share your enthusiasm but not your views :(
This isn't a new phenomenon. Literacy and printing have made it possible for reprehensible ideals to gain greater traction than they might have through books such as Mein Kampf. But on the whole I think literature has still had an overwhelmingly positive influence on mankind.
I hadn't thought of that. You have a point.
It's already surprisingly good where google maps are surprisingly bad (including some world capitals).
Techies always love Moore's law and all its benefits. However, there's so much more that we need to accomplish. Supersonic commercial flight, cure cancer, commercial robotics (ie. Rosie), colonies on Mars and the outer solar-system, get on a train in San Francisco and arrive in LA an hour later, etc.
Yes, computers and communication are changing rapidily but almost everything else needs a kickstart.
Which is exactly what happened. No different to a rumour rippling around an old school trading floor and then being discredited. Just faster and more efficient.
I think it's worse that we don't have flying cars, but we do still have "fat finger trades".
If anything, they're worse now because algorithms aren't built to defend against them.
(http://blogs.wsj.com/marketbeat/2012/09/19/fat-finger-error-...)
And so what about the tweet? You can not only act on information you are 100% certain about or the markets wouldn't work at all. If using tweets to make predictions wasn't more accurate than not people wouldn't do it or lose money.
Perhaps Twitter should add more metadata like originating IP, network, country, device ...
A public/private key system to sign messages might add something. At least it might make people think a little more carefully about protecting those credentials if it meant the onus of responsibility (and blame) for malicious messages fell on them if they fail to do so.
I guess someone wanted to act as fast as possible, without wasting any second; hence the reason not to check source or authenticity.
It's cost benefit analysis and if you think that can be changed you are delusional.
Nathan Rothschild knowing that information is power stationed his trusted agent named Rothworth near the battlefield. As soon as the battle was over Rothworth quickly returned to London, delivering the news to Rothschild 24 hours ahead of Wellington's courier. A victory by Napoleon would have devastated Britain's financial system. Nathan stationed himself in his usual place next to an ancient pillar in the stock market. Knowing he would be observed he hung his head and began openly to sell huge numbers of British Government Bonds. Believing this to mean that Napoleon must have won, everyone started to sell their British Bonds as well. The bottom fell out of the market. Rothschild had his agents buying up all the hugely devalued bonds.