Markets and the perils of Twitter

“Breaking: Two Explosions in the White House and Barack Obama is injured”, tweeted the Associated Press on Tuesday.

“Breaking: Two Explosions in the White House and Barack Obama is injured”, tweeted the Associated Press on Tuesday.

Within six minutes the Tweet was read by two million followers, re-tweeted 1,181 times and sent the Dow Jones Industrial average and Standard & Poor’s 500 Index tumbling 1 per cent (erasing $136 bn) and dramatically weakening the dollar. Spectators rushed to the White House to see... absolutely nothing.

Following these six minutes of utter horror, AP sent out another Tweet: “That is a bogus @AP tweet.” Its account had been hacked.

After the markets re-stabled, investigations announced and reassurances given that President was unhurt, the wave of analysis begun. Commentators and experts were exacerbated at the ability of social media to influence markets. They noted how key words put together like "White House" and "Explosion" can cause algorithmic trading computers to sell, sell, sell. Twitter’s power has already played its part in toppling dictators in the Middle East, but now it is bringing down financial markets.

But then another twist emerged: The Tweet actually was directly linked to the protests in the Middle East – it came from the Syrian Electronic Army, a hacking organisation that supports the Syrian regime.

What are we to make of all of this? This bizarre scenario of events sounds like something out of a Robert Harris thriller combined with the warnings of Nicholas Taleb’s Black Swan. Hot topics now thrown into the air include the use of algorithmic trading computers and the reliability of Twitter as a news source.

Then there is Syria’s part. Cyber warfare has long been an understated part of the Syrian uprising. Two years ago in Damascus I was warned that internet cafes were under constant surveillance with regular hacking of Twitter and Facebook. The government, I was told, was particularly influential online – Assad was in fact president of the Syrian Computer Society.

 Then, last year, anti-government "hacktivists"(to use the newly created term) hacked into the Al-Assad’s personal email account and exposed all through the Guardian.

This unofficial online war has only grown alongside Syria’s physical uprising. The Syrian Electronic Army first occupied itself by posting slander against the rebels and praise of Assad on websites including the BBC. More recently, the Syrian Electronic Army, which many to believe to be unofficially connected to the regime, has attacked state supporters of the rebels. Qatar is a particular target: postings on Saudi Arabia’s news side, al-Arabiya, announced a coup against the emir and others said that the Qatari prime minister’s daughter was arrested in London.

Tuesday’s cyber attack on American markets was the Syrian Electronic Army’s most dramatic yet, but it surely won’t be its last. Who knows what they hope to achieve, but they have at least put into question the trust of markets in social media. The Syrian Electronic Army is crying "wolf" on Twitter and so far followers and algorithms have listened. But they won’t for long and Twitter is sure to  suffer the consequences of mistrust.

Photograph: Getty Images

Oliver Williams is an analyst at WealthInsight and writes for VRL Financial News

Photo: Getty
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Goodbye, Sam Allardyce: a grim portrait of national service

In being brought down by a newspaper sting, the former England manager joins a hall of infamy. 

It took the best part of 17 years for Glenn Hoddle’s reputation to recover from losing the England job.

Between leaving his job as manager in February 1999 and re-surfacing as a television pundit on ITV during the 2014 World Cup, Hoddle was English football’s great pariah. Thanks to his belief in faith healer Eileen Drewery and a string of unconventional and unacceptable views on reincarnation, he found himself in exile following in a newspaper interview during qualification for England’s Euro 2000 campaign.

But just as Hoddle is now cautiously being welcomed back to the bosom of English football, current incumbent Sam Allardyce has felt the axe fall. After less than two months in charge of the national side and with only a single game under his belt, the former Bolton Wanderers manager was caught up in a sting operation by the Daily Telegraph — allegedly offering guidance on how to circumvent his employer’s rules on third-party player ownership.

The rewards for guiding an English team to major international success promise to be spectacular. As a result, the price for any failure — either moral or performance-related — is extreme.

Hoddle’s successor – the endearing Kevin Keegan – resigned tearfully in a toilet at Wembley after a tumultuous 18-month spell in charge. His replacement, the laconic Sven-Göran Eriksson, provided moments of on-field excitement paired with incredible incidents of personal indiscretion. His tangle with "fake sheikh" Mazher Mahmood in the run up to the 2006 World Cup – an incident with haunting parallels to Allardyce’s current predicament – led to a mutual separation that summer.

Steve McClaren was hapless, if also incredibly unfortunate, and was dispatched from the top job in little over a year. Fabio Capello – who inspired so much optimism throughout his first two years in charge – proved himself incapable of lifting the hex on English major tournament fortunes.

The Italian’s star was falling from the moment he put his name to the oddly timed Capello Index in 2010, although his sustained backing of then captain John Terry over a string of personal misdemeanours would prove to be the misjudgement that ultimately forced his exit. As Allardyce has found out, the FA has become increasingly hard on lapses in moral judgement.

English football is suffused with a strange mix of entitlement and crushing self-doubt. After a decade that has given us a Wimbledon champion, several Ashes triumphs, two Tour de France winners and eye-watering Olympic success, a breakthrough in this area has never felt further away.

In replacing Capello, Roy Hodgson — the man mocked by Allardyce during his hours supping pints with Telegraph reporters — had hoped to put a rubber stamp on a highly respectable coaching career with a spell managing his own country. But this summer’s farcical defeat to Iceland at Euro 2016 put his previous career in a much harsher light.    

Allardyce was a mix of the best and worst of each of his predecessors. He was as gaffe-prone as Steve McClaren, yet as committed to football science and innovation as Hodgson or Capello. He also carried the affability of Keegan and the bulldog spirit of Terry Venables — the last man to make great strides for England at a major tournament.  

And as a result, his fall is the most heartbreaking of the lot. The unfairly decried charlatan of modern football is the same man who built a deeply underrated dynasty at Bolton before keeping Blackburn, West Ham and Sunderland afloat in the most competitive league in Europe.

And it was this hard apprenticeship that convinced the FA to defy the trendy naysayers and appoint him.

“I think we make mistakes when we are down here and our spirit has to come back and learn,” Hoddle mused at the beginning of his ill-fated 1999 interview. As the FA and Allardyce consider their exit strategy from this latest sorry mess, it’s difficult to be sure what either party will have learned.

The FA, desperately short of options could theoretically turn again to a reborn Hoddle. Allardyce, on the other hand, faces his own long exile. 

You can follow Cameron on Twitter here.