Wealth, jobs and celebrity accrued to those fortunate enough to be engaged in those pursuits as they inspired and supported each other to achieve ever more alluring successes.
But as the Zen masters teach us, opponents' strengths may be turned against them. And so it may be with the ever more deeply intertwined tech-finance relationship which is, perhaps all too often, favoring immediacy at the expense of accountability.
Use of data generated from social media and internet trends is being employed for everything from capital markets analyzes to crime scene investigations. The problem, as the following article explains, is that our penchant for immediacy may be a trap. The advice to think before you act was borne of hard-won human experience. The inclination to act first based on the perception that the potential benefit from new information is more valuable than the potential risk from not vetting it can and will be used against us. JL
George Packer reports in The New Yorker:
Add to traders’ algorithms the vast amount of data found on social media, which can be sifted by sophisticated computer programs in two to three milliseconds, and accountability seems almost hopeless.
Last week, someone with the dark imagination of Don DeLillo and the satirical genius of Gary Shteyngart, acting in the name of the Syrian Electronic Army, figured out exactly how to exploit the sad feverishness of this moment in American history and make us look foolish. Most sectors of the economy have been so sluggish for so long that the normal word for it would be depression, but there are exceptions, notably the same two that we’ve seen for a generation now, both from the dizzying world of bits, not stuff: finance and computers. It’s my unprovable hypothesis that the tremendous interest they generate is in part compensation for, and perhaps a distraction from, the general sense of stuckness that prevails in other areas. The stock market is setting records, while Silicon Valley continues to revolutionize the way Americans spend their time. So if you’re a pro-Assad Syrian hacker, what would you do to throw this state of affairs into high relief and undermine the national confidence of the declared enemy of the Syrian government?
Of course, you’d hack into the Twitter feed of the Associated Press, put up a phony tweet that said, “Breaking: Two Explosions in the White House and Barack Obama is injured,” and watch what happened next. Now, a careful AP reader might have noticed the kind of subtle improbabilities that are also the bane of even the best Nigerian e-mail scammers. “And” doesn’t quite scan, and “Barack Obama” also seems off—it should be “President Obama,” or just “Obama.” But that careful reader wasn’t the intended audience for the false report. Carefulness was exactly what the hacker was counting on not encountering. The thing worked like a charm.
“Immediately, the mood shifted on the floor of the New York Stock Exchange,” the Times reported. Two populations known for high-velocity jumpiness came together and exploded in the digital equivalent of nuclear fusion. The first were hard-core users of social media; the second were high-frequency, high-speed traders, using complex algorithms that automatically sift through huge volumes of data to execute trades and exploit minute fluctuations in the market. Within seconds of the false AP tweet going up, faster than any but the most reptilian of human nervous responses—far too fast for caution or skepticism—the news rocketed around the virtual world: the Dow fell by a hundred and fifty points, and $136 billion in market value was lost. (Most of it was soon recovered).
Somewhere in the non-virtual world, someone was laughing.
Maybe the hacker, wherever he (or she) was, knew that, just a month ago, the Securities and Exchange Commission decided to let companies report financial news, such as corporate earnings, on social-media sites. It was the equivalent of giving the town rumormonger a loudspeaker (for that’s all this is, and it’s older than Virgil, who wrote, “Fama volat” (“Rumor has wings”), never faster than when they went digital). High-frequency trading was the cause of the 2010 flash crash. It’s long been about five steps ahead of the regulators, in spite of the best efforts of some in Washington. Dodd-Frank didn’t come to terms with high-frequency trading, and the S.E.C., while making noises for several years about trying to cast some light on the so-called “dark pools” of liquidity in markets far from the public exchanges, keeps falling further behind.
“We’re not in a world where people live in vacuums,” said a manager with Bloomberg LLP, which distributes relevant Twitter posts to subscribers on its terminals.
It’s worth noting that, while the hacker’s mode of transmission was social media and high-frequency trading, the immediate target was that relic from a previous era, the Associated Press. The Syrian Electronic Army had previously hacked into the accounts of CBS, NPR, and the BBC. These digital soldiers don’t like Western news coverage of the Syrian civil war, and they take the mainstream media seriously enough to try to damage it. Perhaps they take the mainstream media more seriously than people here and in Britain do.
It’s been a rough couple of weeks for the media, social and mainstream. The Boston Marathon bombing brought out the best in some newspapers (the Boston Globe and the Times provided excellent, scrupulous coverage), but the story also highlighted the worst tendencies of media new and old. The New York Post started getting the story wrong within hours, if not minutes, of the explosions and never stopped, calling a Saudi victim of the bomb a suspect and eventually splashing a photo of two completely innocent young men, including a seventeen-year-old, across its front page with the headline “Bag Men.” Less glaringly, CNN (“the most trusted name in news”), which initially botched the Supreme Court’s decision on health care last summer, did the same in Boston, falsely reporting that two suspects were in custody two days after the bombing.
Over on the Internet, vigilantes on Reddit, the trend-spotting site (whose largest shareholder is The New Yorker’s parent company), hunted down and exposed those same two men via Twitter posts, along with a third innocent, a Brown University student named Sunil Tripathi who had been missing for a month—thereby causing unimaginable pain to his family. It was the equivalent of some poor soul who vaguely resembled the blurry face on a “Wanted” poster being rustled up by a mob on Main Street and nearly lynched. The details of this last case are especially revealing. After tracking the Brown student’s name on Twitter, a self-appointed bounty hunter/breaking-news reporter named Greg Hughes was reading the unofficial Reddit transcript of the Boston police scanner around two-thirty in the morning, three days after the bombing, when Reddit announced that the police had a name—“unclear if related.” (It wasn’t.) At 2:42, as the Atlantic’s Alexis Madrigal has recounted, Hughes tweeted, “This is the internet’s test of ‘be right, not first’ with the reporting of this story. So far, people are doing a great job.” A minute later, having decided for no discernible reason that the name mentioned over the police scanner was Tripathi’s, Hughes tweeted it, causing the Internet to fail the test in spectacular fashion.
“The only problem is that there is no mention of Sunil Tripathi in the audio preceding Hughes’ tweet,” Madrigal wrote. “I’ve listened to it a dozen times and there’s nothing there even remotely resembling Tripathi’s name.” Too late. Within seven minutes, others began picking up the falsehood. They worked for Web sites, television news, and newsmagazines, and they were all awake and online in the middle of the night in order to be first, or just part of it. Then, at three A.M., the Twitter feed of the hacker group Anonymous sent out the word. Madrigal describes the mad rush that followed: “There was a full-on frenzy as thousand upon thousands of tweets poured out, many celebrating new media’s victory in trouncing old media. It was all so shockingly new and the pitch was so high and it was so late at night on one of the craziest days in memory. That Redditors might have identified the bomber hours before anyone but law enforcement seemed like amazing redemption for people who’d supported Reddit’s crowdsourcing efforts.”
Sunil Tripathi’s body has since been found in the water off India Point, in Providence; his good name was sacrificed to the cause of New Media triumphalism, whose supporters so badly wanted to claim victory that they conjured it out of thin air. After the damage was done and the truth came out, Reddit issued an apology to his family. Hughes and others deleted their tweets as fast as they had posted them. And the crowd moved on.
Other than self-restraint, which is in short supply these days, nothing much can be done to prevent any of this. High-frequency traders will go on using algorithms that turn milliseconds of information advantage into huge profits, put markets at constant risk, and drive ordinary investors out of equity trading (unless or until the S.E.C. starts to control off-site markets—a big test for its new chairwoman, Mary Jo White). Social-media sites will find new ways to spread information, for better and worse, farther and faster than the Spanish flu. People like Greg Hughes will continue to compete with the older, slower news media, and they will continue to get some things right and other things terribly wrong.
And journalists, the ones who do it for a living, will continue to have their faith in the profession shaken, as they panic and let their own standards slip in order not to be embarrassed by Reddit at 2:43 in the morning. But unlike high-frequency traders, Internet entrepreneurs, and online vigilantes, journalists have a stake in those standards, which are the only reason for having professionals do the job. When people are fighting for survival they can forget the long-term interests that are its only guarantee. Perhaps the triumphs and debacles of Boston, and the Syrian Electronic Army prank on the stock market, will serve to remind journalists of how badly they’re still needed, as long as they exercise their best qualities, which include, among other things, self-restraint.
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