Greece? Zzzz. EU bank says TWEETING can move the stock market What is it that Twitter is better at than Google at doing? Over and above the obvious point that Twatter is better at broadcasting 140 character apercus to the world, while Google is better at telling you the answer to something? That answer is, as the boys at the European Central Bank (PDF) have just told us all, predicting …
There was/is a saying that the stock market doesn't react to real world issues, but to the emotionalism of the brokers and traders. Put them in a good mood (maybe dinner, some wine, some hanky-panky) and the market goes up. Put them in a foul mood.. (angry spouse/BF/GB, traffic ticket) and the market goes down. Algorithms only react to the market, they don't really control it. Well.. maybe they do now, but the trend up or down starts somewhere.
"...What they did was search the Twat-feed for times when “bullish” and “bearish” increased in frequency and then compared that to the subsequent performance of the market..."
Mightn't the figures be skewed somewhat by correspondence between pairs of hirsute men in leather harnesses, or short-haired women in comfortable shoes?
We should probably try it.
Pick a stock, every commentard twots out some drivel like "investing today! #bullishOnStockWeChoseAtRandom" - with the swapped out variable, of course - and see what happens.
Don't even need to buy that stock - in fact, for science it's probably better not to since the rush of small buys might itself lead to a following market, thus screwing up the twerting as prime cause.
In a nutshell they've rediscovered that if people are told that the market will do better, then they'll put more money into it and the market will actually do better. If people are told that the market will be worse, then they'll pull money out of it and the market will suffer.
I'm not sure why this is news because we've known that if you say something loud enough and to enough people then it will become true. We call those self-fulfilling prophecies. I guess the only actual angle here is that they used twitter... well okay. As if the method of communicating something matters to the result.
Honestly, if this is what the EU spends their money on they may as well keep giving it away to Greece. It's the same effect.
Yes, as evidenced by Apples latest figures. Record sales and profits, you'd expect the share price to rise. What actually happened is that analysts predicted bigger sales and profits so the share price rose as people bought in. The the record numbers were announced but, despite being record numbers, were lower than the analysts predictions so Apple "lost" $20B in share value. Weird!
Before Twitter there was the watercooler, the board room (in the old Wall Street sense) and the various hangers on moving around from office to office and making conversation.
It probably had exactly the same effect, it just wasn't as organised and it wasn't searchable.
(Also there were people who claimed to be able to tell, just from the noise the ticker was making, whether the market was going up or down. Delusional? People gave them money to trade, so it might be a rational strategy even if there was no underlying correlation.)
Temporary hijack of Tim's thread to lodge a request for a future article; the big one - money.
What is it?
Where does it come from?
Where does it go to?
How much is there?
Was there always this much?
Are there alternatives to the current system?
Is the whole "Money as Debt" thesis bollocks?
Or very important?
Why do issuers of sovereign fiat currency borrow money with interest?
Will I end up like the chap in the picture?
Etc.
I think Niall Ferguson might already have done this:
https://www.youtube.com/results?search_query=niall+ferguson+ascent+of+money
- not that I've seen it, mind. Can't be arsed with telly. Anyone care to summarise it for me, please? BTW, I thought you already were the chap in the picture...
It's a quiz isn't it ? I like quizzes me.
1. It is a promise to pay, a debt obligation to be redeemed in the future.
2. It is created when someone consumes/aquires something from someone else.
3. When the obligation is redeemed (or declared irrideemable) the money is destroyed.
4. Nobody really knows. (there is no limit)
5. No, inflation is the increase in promissary notes over and above the amount of obligations redeemable.
6. Oh Yes.
7. In my opinion (as far as that counts) No.
8. IMO (ditto) Yes.
9. Cuz they're mad I tells you, madder than a box of frogs.
10. Oh Yes, we all will eventually.
Money is a universal proxy for demand.
It is a belief system, it is an act of faith that money you receive will be accepted by another.
It is a store of wealth until not believed, then it isn't.
Currency is a localised form of money. (£s, $s or seashells)
Legal tender is what is demanded by the Taxman (it creates demand for the sovereign currency but the Taxman first has to spend it into existence so it can be redeemed).
It is only through convenience that Legal tender is used as currency.
That's my current take although when presented with better evidence, I'll change my opinion.
...aren't really involved. Its all (well, 95% I understand) speculation by computers. Only 5% are "real" trades.
The actual stock prices are irrelevant, the movement is where the money is. If I ruled the world, I'd just limit the trading frequency - i.e. stock purchased may not be sold for 1 hour/day/whatever.
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