Propagandists, Shills, Trolls, and Hackers! - Fake News in the Financial Markets

This is something of a follow-up to a previous article published last week on propaganda by omission, but its mostly in response to an article published last week on a Ticker Tape post--an article to which I agree 100% for reasons that may be all to obvious if you actually read it (https://tickertape.tdameritrade.com/investing/fake-news-stock-market-risk-17637).


In the aforementioned article (the second one), the author begins by compartmentalizing the transmission and reception process, parceling out the different targets (key person and key product risks) and sources (i.e. hackers, propagandists, shills, trolls, and also celebrities who may inadvertently cause an asset to tumble). It also emphasizes the importance of fundamentals as the normalizing factor over the longer term.


Getting down to the nitty gritty, theres a difference between the Dow declined by 7%, and the the 1,875-point Dow plunge was a bloodbath. Yes, theres a difference in time scale but both descriptive propositions refer to the same thing. Every time a writer makes a word choice, s/he necessarily eliminates all other competing alternatives. A decline is and isnt a plunge.


Every syntactic choice restricts the flow and affect of information to a specific design. A sentence that leaves no room for passivity is the same and not the same thing as a sentence that is treated with passivity in expression.


In the end, however, the interpretive operation, a task reserved for the reader, is a slippery space depending on the passivity of the reader. Every phrase is a potential battleground of linkages (borrowing from the author of The Differend) to other phrases, angles, takes--in short, other possible lines of interpretation, and many of which may not be compatible with one another despite referring to the same thing. The propagandists job is to cut off the flow of alternative interpretations, reducing the meaning of a line of thought to one path (one that serves the writer or the institution backing him/her up).


According to the Ticker piece, the SEC (in 2017) published a press release announcing that 27 firms and individuals had been charged with paying writers to promote stocks through articles that fraudulently appeared as unbiased analyses. Thats pretty much shlll-craft.


In the section titled When Markets Meet Misinformation, the author provides five composited examples of real-life news items that pretty much wiped billions from the market including a viral video of a burning electric car, the (fake) death of a CEO (can that be the Ethereum founder?), an implicit reference to Snapchats fall after Kylie Jenners tweet, and the hacked 2013 AP tweet on the White House explosion that injured President Obama (which, of course, didnt happen).


So how can an investor protect his or her portfolio from the impact of fake news? Or better yet, how can a trader take advantage of a fake news attack? It should be pretty obvious, but if you really want to know, check out the article. I wouldnt want to steal the authors thunder. Ill give you a hint. It has everything to do with fundamentals.


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