HEY--> Yesterday, a 12-word Tweet caused the stock market to briefly lose $134 BILLION dollars

[Poll_Blind]

I posted about this yesterday and I'm going to post about it today.

From today, In the age of speedy computer trading, a phony tweet and algorithms can send stocks plunging:

NEW YORK — For a few surreal minutes, a mere 12 words on Twitter caused the world’s mightiest stock market to tremble.

No sooner did hackers send a false Associated Press tweet reporting explosions at the White House on Tuesday than investors started dumping stocks — eventually unloading $134 billion worth.

Except most of the investors weren’t human. They were computers, selling on autopilot beyond the control of humans, like a scene from a sci-fi horror film.

“Before you could blink, it was over,” said Joe Saluzzi, co-founder of Themis Trading and an outspoken critic of high-speed computerized trading. “With people, you wouldn’t have this type of reaction.”

For decades, computers have been sorting through data and news to help investment funds decide whether to buy or sell. But that’s old school. Now “algorithmic” trading programs sift through data, news, even tweets, and execute trades by themselves in fractions of a second, without slowpoke humans getting in the way. More than half of stock trading every day is done this way.

--snip--

Much more at the link(s). Very much worth your time to read.

PB

[kentuck]

1. There is a big problem here just waiting to explode...

and Congress does nothing.

[Poll_Blind]

2. And it's nothing new, either. This kind of trading has just been ramping up and up, getting...

...worse and worse. I have no idea how absurd it gets before the people in "charge" do something about it. I mean, that would make the fake Tweet the most expensive Tweet in history and possibly the most damaging hoax ever released- at $11 billion a word!

PB

[progressoid]

10. And they won't do anything either...

until it directly impacts them.

Or when their million dollar donors write some legislation for them to pimp.

[laundry_queen]

14. The problem being

is that it already impacts them - just in the opposite way. These automatic triggers make the rich millions and billions of dollars in short periods of times - they've already gained FAR more than they'll ever lose. The people who profit the most from this automated trading are also the same people who are NEVER going to lose THEIR money. The 1% of the 1%.

[Scuba]

3. Kinda like electronic voting machines.

People get screwed by a black box.

[Baitball Blogger]

4. Tick tock, tick tock.

If this could happen by accident, what can happen when someone knows how to trigger those machines with a "boo!"

[Dragonfli]

5. One of the more important reasons to place a small tax on each trade

It would be far less profitable to do mass trading so quickly using bots.

The entire concept of making money on high volume fast speed trading back and forth all day does nothing but leach pennies from huge volume traded at high speed that add up, how can this possibly add to "the market" in any way that isn't negative?

I'm no Gordon Gekko master of the universe, but profiting from producing absolutely nothing at all of any kind of value appears parasitic even when done manually.

[freshwest]

6. Sounds like a great way to track this.

Hoping no one lost their jobs on 'Main Street' from this?

[Earth_First]

7. +1

This was one of Elliot Spitzer's ideas...

[Poll_Blind]

9. Oh Hell Yes!

PB

[zeeland]

8. Well now they have an explanation when SS

is invested in the market and disappears in a matter of seconds. "oops, must have
been one of those pesky algorithmic glitches."

[burnodo]

11. Pretty scary stuff

Just proves that information can be used as a weapon.

[Poll_Blind]

13. Information is a weapon of mass destruction.

PB

[mia]

12. Fascinating information.

Thank you, I would have missed this.

[BobTheSubgenius]

15. Every day, edging a little closer...

The Forbin Project can't be far in the future.

[BrotherIvan]

16. I trust whoever did this will be in jail for life

faster than you can say "bailout," that word that warms every banker's cold, dead heart.