Social Media, Financial Algorithms and the Hack Crash

Abstract

‘@AP: Breaking: Two Explosions in the White House and Barack Obama is injured’. So read a tweet sent from a hacked Associated Press Twitter account @AP, which affected financial markets, wiping out $136.5 billion of the Standard & Poor’s 500 Index’s value. While the speed of the Associated Press hack crash event and the proprietary nature of the algorithms involved make it difficult to make causal claims about the relationship between social media and trading algorithms, we argue that it helps us to critically examine the volatile connections between social media, financial markets, and third parties offering human and algorithmic analysis. By analyzing the commentaries of this event, we highlight two particular currents: one formed by computational processes that mine and analyze Twitter data, and the other being financial algorithms that make automated trades and steer the stock market. We build on sociology of finance together with media theory and focus on the work of Christian Marazzi, Gabriel Tarde and Tony Sampson to analyze the relationship between social media and financial markets. We argue that Twitter and social media are becoming more powerful forces, not just because they connect people or generate new modes of participation, but because they are connecting human communicative spaces to automated computational spaces in ways that are affectively contagious and highly volatile.

Hackathons, entrepreneurship and the passionate making of smart cities

“…Accordingly, similar to the notions that markets and economies are made rather presumed (Karppi & Crawford, 2015;Knorr Cetina & Bruegger, 2002;MacKenzie, 2004;McFall, 2011;Muniesa, Millo, & Callon, 2007), smart cities emerge from the interplay between various imitative rays that share ideas, promote beliefs, motivate innovations and test them as products. For Tarde (2007; and also Lépinay, 2007), the results of the interplay, and therefore the development of smart cities, can be open-ended and uncertain.…”

“…Analysing smart cities through Tarde then means an exploration into how these cities emerge from the continuous (re-)production of subjectivities and economic operations. When individuals engage in economic activities, for example when financial market traders are in action, the market is shaped by and also shapes the specific ways that traders engage with the market (Karppi & Crawford, 2015;Lange, 2016). Accordingly, subjectivity is 'neither prefixed nor stable, but is indeed a plastic entity that is formed and reformed in and by the economic engagement' (Borch, 2007, p. 562).…”

Twitter permeability to financial events: an experiment towards a model for sensing irregularities

“…Given apart the flows which characterise the permeability of the layer in between Twitter and the financial market, the information naturally spreads throughout the Twittersphere by the common re-tweeting and following mechanism in the platform. Even if the piece of news (post) comes from a human spread rumour or some cyber-attack which ends up being false information, [26] sustains about "the power of networked social and financial systems to connect autonomously and to produce a present without human oversight or governance". In our opinion, further actions and research are needed to achieve a safer financial ecosystem for traders and investors.…”

The rise of speculative devices: Hooking up with the bots of Ashley Madison

“…That is not to say before 2005 these were not considered, such as in work on menu driven identity (Kolko 2000;Nakamura 2002) and early work on the technical turn in philosophy (Feenberg 1992;Feenberg 1995). That said, increasing numbers of scholars have begun to take seriously the non-human in their study of the Internet and account for it, for instance, in their analyses of algorithmic culture (Cheney-Lippold 2011;Gillespie 2014;Crawford 2016;Karppi and Crawford 2016), the politics and ethics of platforms (Gillespie 2003;Gillespie 2010;Light and McGrath 2010) and the role of mediators more generally (Brunton and Coleman 2014;Light 2014). It is in the context of the growth of attention to the non-human that this work is situated.…”

“…The bots of Ashley Madison are like financial algorithms in that they are, as Karppi and Crawford (2016) suggest, built to affect and be affected. The question then becomes one of how they are active.…”