Flash crash and the Obama hoaxMay 14, 2013
When a fake news bulletin was distributed after the Associated Press’s Twitter feed was hacked on April 23, the stock market instantly dropped a full 1 percent.
On his Global Economic Warfare website, Kevin Freeman tackles the implications of the fake tweet on the market, and how market manipulation can be used as a financial warfare tactic. Read his important posts here and here. An excerpt follows:
A Single, Man-Made Stock Market Crash is a New-Concept Weapon
When the two PLA Colonels wrote Unrestricted Warfare in 1999, they listed “a single man-made stock market crash” as one of three specific new-concept weapons for the 21st Century. They called it financial warfare.
We have been warning about market manipulation for several years, first in our report for the Department of Defense and then in the New York Times Best-Seller, Secret Weapon. Yet, most in the intelligence and defense community know little about the financial markets. And, those who understand the markets generally know little about defense. Unfortunately, our enemies have studied both.
This week, we saw a hacked Twitter account used as a weapon resulting in a mini flash crash for stocks. Even as the market recovered in minutes, estimates are that there was something like $150 or $200 billion lost even if only briefly. We mentioned this in an earlier post.
While any human could clearly see that the White House was not bombed as the hacked tweets claimed, computer algorithms that monitor social media sites could not tell the difference. As a result, massive sell programs began and other high-frequency algorithms picked up on it.
The Syrian Electronic Army claims that they were the source of the false tweet…
Mr. Freeman also included this graphic which showed the plunge in trading. The person or entity responsible for the planned Twitter forgery could have anticipated the miniature flash crash and hedged against it in order to profit from the hack: