Snarky Behavior

The Humans are Dead

September 18, 2008 · Leave a Comment

I realize there are probably more interesting/scary market developments going on right now, but I wanted to take a moment to discuss a news story that kind of got brushed aside by Freddie/Fannie/Lehman/Merryl/AIG.

Last week, through a series of errors, a story which was published in 2002 about United Airlines filing for bankruptcy somehow got re-hashed in the “most-viewed” box of the South Florida Sun Sentinel.  Google News, which aggregates top news stories, picked up on the story, and an analyst for Bloomberg News sent the headline around its own news network, which is used exclusively by financial industry professionals.

Within minutes, United Shares crashed. The company lost $1 BILLION dollars in value in a matter of moments.  All on false information, two steps removed.  Presumbably, two mistakes made by two careless idiots led to thousands of investors losing a billion dollars. Let the finger pointing begin:

Tribune said in a statement that its archived bankruptcy article had simply been there online all along. The statement blamed “the inability of Google’s automated search agent ‘Googlebot’ to differentiate between breaking news and frequently viewed stories on the Web sites of its newspapers” for the problem. Tribune also said that a single click on the archived article would have been sufficient to place it on the “most viewed” section because the click came in the middle of the night on a weekend. … “This is what happens when everything goes on autopilot and there are no human controls in place or those controls fail,” said Scott Moore, who as Yahoo’s head of media oversees Yahoo News, the most popular news site on the Web.

Ya think?  Not only did a robot fail to differentiate between breaking/most viewed news, all of the robot traders that are set to dump if a stock passes its 52 week low went on auto-pilot.

You think the traders who bought back the stock once the mistake was realized were happy?  How’s a 100% increase in an hours time sound to you?  Would that be something you might be interested in?

Whenever I hear that “financial instruments are extremely complicated” and that “their is still substantial systemic exposure to risk” I just hear “Wall Street isn’t as smart as it thinks it is” and “we’re all fucked.”

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