In today’s Times, Noam Cohen looks at how fake news ends up being reported as true:
IN 1864, back when rumor still traveled by foot, a young messenger walked into the newsrooms of New York City’s press row with an Associated Press bulletin that President Lincoln had ordered the conscription of 400,000 additional troops for the Union.
The news arrived at a precarious time for the newspapers — around 2 a.m. Even the night editors had left, forcing a skeleton crew to decide whether to rush something into the paper, or risk being scooped. Two papers took the bait on what soon was exposed as a hoax.
But the news also came at a precarious time for the country: a conscription would have meant the Union army was in trouble, and the price of gold soon shot up. Two journalists from Brooklyn hatched the plan, knowing how best to sneak bogus news into print, and remembering to buy gold beforehand. (They were soon caught.)
Markets exist to convert good information into profitable investments. And, in their deep agnosticism, they also exist to allow false information to create quick profits. During that brief window, false information may in fact be easier to exploit — it shows up just in time, and purports to answer the questions on everyone’s mind.
And while the Civil War-era hoax had to use crude tools (war is going badly, gold rises in the face of bad news), Internet-fueled falsehoods and day-trading sites allow for highly tailored rumors to be quickly amplified and exploited.
In recent days there has been a range of false reports that managed to gain great purchase across the globe while the truth is still logging on.
Early in the month, Apple stock fell as much as 5 percent after a CNN-sponsored citizen-journalism site, ireport.com, published a false item from a user reporting that Steve Jobs, the company’s chief executive whose health has been a public preoccupation, had been rushed to the emergency room. The poster is still a mystery, though the Securities and Exchange Committee is investigating and CNN is cooperating.
In September, United Airlines lost more than $1 billion in market capitalization when traders treated a six-year-old announcement of a bankruptcy as a new development … Link
