The crazy market crash that whipped through international exchanges on Thursday offered a wonderful moment to think about the information and misinformation that guides us through a chaotic world.
Our own reaction at CBC business to the 1,000-point plunge and subsequent bounce helped me focus on an issue I have been thinking about a lot lately. It is that in an internet world where everyone has the right to comment, the market of ideas has been undermined by uninformed opinion.
I do not think I draw the curtain back too much to say that besides scribbling this weekly column, my day job is as a shadowy intermediary between the various outlets of CBC business coverage. Normally you only see and hear our glamorous and charming on-air personalities. But a cluster of us, the hidden gnomes and elves of CBC business, sit together, doing our best to winnow shiploads of market information into a kernel of digestible TV, radio and online coverage.
The amount of business information raging through the world's electronic veins is enormous. Most people hardly know it exists. That is because in business, the relationship between information and money is absolute.
There are analyst reports on companies large and small. There are economic outlooks from banks, corporate financial results, political risk analyses, announcements that new bonds are issued, statements from governments and central banks. The list goes on. Business news wires like Thomson Reuters and Bloomberg spit out page after electronic page of data, many per second, some marked with colours and symbols to indicate some other financial journalist's idea of how important they are.
And flowing over and under and around all the information is the thrumming noise of the markets, as individuals and companies struggle to understand some piece of that wall of data in order to buy one thing and sell another with the ultimate intention of making money.
On Thursday at 2 p.m. ET, we gnomes and elves were poring over all this information, trying to separate the wheat from the chaff, hypnotized by our methodical work.
Suddenly the thrum changed.
Several of us glanced up to see the market was down sharply, but swings of 100 or even 200 points are hardly shocking in these confusing times.
Then the thrum became a ringing, and then a jangle.
Everyone's eyes turned from their walls of information to a single focus. New York's Dow Jones Industrial average was down 400 points, far outside the range of a normal daily swing. And falling.
By then most of us were on our feet clustered around the ticker. For a moment the downward movement would pause or even change direction for a point or two. But then as we watched, the Dow decisively, relentlessly, plunged, through 400, 500, 600, 700, 800, 900.
The sense of watching news unfold before our eyes, though so much less significant, reminded me of a newsroom on September 11, 2001, watching buildings crumble as if in slow motion.
A roar went up from our small piece of newsroom floor as people exclaimed to each other and offered or demanded opinions on why it was happening.
And then it was over.
As the market climbed upward again, we scurried back to our desks to try find out why it had happened. Amanda Lang and Fred Langan and Mike Hornbrook, when they weren't on the air trying to explain it themselves, were on the phone to their contacts. The gnomes and elves who spend an entire day creating the Lang & O'Leary Exchange discarded hours of work and began afresh.
At first, credible news sources were strangely silent.
There was a problem. There was no single truth available.
According to the concept of "the marketplace of ideas," truth emerges as we winnow through the all the possible offerings. But what happens when there is no single truth?
In the complete absence of facts, theories began to pour out. A tweet from a credible market watcher said computer trading had caused the collapse. Others said it was a glitch in trading software. One report had a bond trader with fat fingers pushing the B for billion instead of the M for million. Another report said the stock for the business management firm Accenture had slumped from $40 to a penny in a matter of seconds. Another blamed trading in the home products company Proctor and Gamble. Not only were these things said, but they were reported in credible sources.
My favourite, because of its transparent rumour-mongering, came from MarketWatch, a website owned by the same company that produces the Wall Street Journal. The article was titled "Markets might be expecting another Lehman: analyst."
The analyst quoted expressed the view that the fear rolling through the markets might be because traders were worried that there could be another disaster like the collapse of the investment bank Lehman Brothers in the offing. This analyst, the article went on to say, "said he had no specific information [about] the matter, but …" and then proceeded to quote his terrifying views word for word.
If the straight reporting was unrestrained, the reader comments were wild.
Hackers, terrorists, Russians and Chinese took the blame. I have not yet seen posts pointing to aliens or machine intelligence, but I can hardly doubt they are there. In the absence of any information at all, each opinion is equal. Even as I write, about 24 hours later, it seems no one really knows what happened. The fat finger idea has been ruled out. The markets insist it was no glitch of theirs. Market regulators have found no perpetrators, or at least haven't told us about them.
It may be that the market went crazy for no good reason. People, and the automatic trading machines they control, bought and sold based on unsound logic. And if the physical markets can go wild in the absence of rigor, how much more so the market of ideas?
Hugo Rifkind writing in The Spectator blames excessive freedom of speech. "When Leonardo da Vinci painted the Mona Lisa, after all, he didn't leave a blank bit at the bottom, on which any passing oddbod was welcome to scrawl 'BUT WOT ABUOT IMIGRATON?' "
A recent column in London's Financial Times demanded that all online comments be signed with a real name. But as we saw in the reporting that followed Thursday's market debacle, wild supposition cannot be blamed only on the unwashed and anonymous.
As we saw on Thursday, markets can go crazy on the slimmest of excuses. The same applies to the marketplace of ideas.
If we are to make sense of a chaotic world, instant opinion is not enough. We must research diligently — and when we don't know, we must admit we don't know. But maybe an alien cyber-intelligence made me say that.