Having worked a total of 20 years in newswire services like Dow Jones and Reuters, my heart sank when the “power of Twitter” was unleashed in a hoax story that claimed US President Barack Obama had been hurt in White House explosions.
US stocks briefly tumbled within minutes, shedding 100 points inside 180 seconds, and the FBI was called in to help identify a hacking incident at the venerable US news service of Associated Press. The AP Twitter account had been hacked by a group called the Syrian Electronic Army and the site was immediately suspended for investigation.
Hoaxes have become more elaborate over recent years – such as a bogus oil executive who managed to grab airtime on the BBC by sneaking into its Paris studio where his face was not recognised. The guy, a closet eco-warrior from a group opposed to the oil industry, went on camera in suit and tie to provide a polished series of pronouncements which hit oil shares. It was several minutes before the BBC in London pulled the plug on the live interview.
But the latest episode is not worthy of an Oscar. It was not elaborate, just opportunistic.
Yet it was enough to fox financial markets. Many traders later admitted, or at least commented with some air of malice and retribution, that they rarely look at AP wires let alone its Twitter account.
That’s all fine, but it doesn’t remove the fact that the false tweet was believed by enough traders and news sources, and retweeted. Russia Today acted upon it, among other sources. And Wall Street lost a lot of money quickly.
It underlines the dangers of Cyber Terrorism now sweeping the world. Not only does access to Twitter damage reputations as happened last year in cases such as the UK’s Savile child abuse accusations later found to be false, but tweeting can result in influential accounts being hijacked and lose you money too.
Twitter, like Wikipedia, are the “new media news agencies” with fans of celebrities and others recording births and deaths in hospitals and homes faster than The Sun can get it online on its celeb gossip page.
But it is the panic reaction and the sense of trust which markets these days invest in the less-verified media that should cause much concern. And it is also worrying that within a few weeks people will have forgotten the episode and will once again trust the same sources without qualification.
Markets, turbo-charged by investors such as Hedge Funds, are keen to get a story fast and trade on it as fast. Time is money, knowledge is power. Greed is good. Yes we know the clichés. And now newswires, rather than rise above the frenzy, salivate in beating one another by a 10th of a second with a headline.
But have these media and their subscribers lost a sense of proportion? I think so.
There was a time when trading floors boasted at least two news vendors. Dealers were not supposed to act on just one newswire’s headline, in case it was wrong.
Newswires can post news superfast. And they can also send out corrections quickly too. But while subscribers try to be forgiving, it is harder to do if you actually made the mistake of totally relying on that news to be right the first time around. And given that a headline can go out prompto while a correction itself requires confirmation that an error exists and the corrected version needs to be double-checked, that can take a little longer to set the record straight. That will make financial losses to subscribers greater still.
The banks’ budget cuts mean that IT managers have gone around departments seeking savings. They have forced many trading floors to choose between a Reuters or a Bloomberg terminal. This has become even more compelling since a number of smaller news vendors have become aggregated into services like Thomson Reuters and Bloomberg. A one stop shop.
But some services are not aggregated, and some like Twitter are shared only via Twitter followers and consumer media sites rather than on a newswire.
In the latest episode, the headline did not make it onto a major newswire but became a “Twitter sensation” where it was allowed to go “trending”. How lovely.
Just like with the worry that traders are forced to choose a single mainline news vendor, so too is the worry that more information is coming via unverified sources like Twitter. This micro blog site, which all of us use sparingly, is not in itself a news vendor but a distraction. It carries no guarantees of accuracy. And no money-back promise. Free and easy. Too easy.
Real-time journalism should be about speed, not haste. But most of all it should be true to its roots: Accuracy Above All.
A fast story, lapped up by naive and jittery financial markets, is a good one. But we all want to remember the story and its source for the right reasons the next morning.
More on the fake tweet here