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Whitehouse bomb tweet hoax causes markets to… fall?

I looked at my screen this morning and saw this…

BILLIONS was temporarily wiped off the US stock market last night after hackers broke into the Twitter account of the Associated Press and announced that two bombs had exploded at the White House, injuring Barack Obama

Sayeth the news article and my immediate thought is… why?

If the White House… hell, let us think big… and indeed all of Washington DC was fortuitously tragically blasted into a huge smoking crater by an unexpected meteorite, killing every politician, government functionary and policy wonk who works there, surely that would be a economic windfall that should add billions to the US stock market, at a stroke removing a significant portion of the most active members of the parasite class from the world’s largest economy.

Just sayin’

21 comments to Whitehouse bomb tweet hoax causes markets to… fall?

  • Antoine Clarke

    Two words: President Biden.

  • The Sage

    > Two words: President Biden.
    That and the inevitable fascist backlash.

    Just Washington would not be enough — you don’t get rid of a cancer without flushing the whole system with chemo.

  • Laird

    @The Sage: but it would be a start.

    More seriously, the market hates uncertainty, and that’s what would be the result. The (temporary) decline is understandable, even if many (most?) market participants dislike Obama’s policies.

  • llamas

    Market participants may dislike President Obama’s social policies, but many of the largest participants (and therefore, those which would have the biggest impact on the stock market(s)) rely heavily on his regulatory policies to secure their markets and exclude competition. The certainty that GE likes is the certainty that heavily-lobbied government regulation excludes new and innovative competitors from the light-bulb market, and so forth.

    The idea of a village clown like Vice-President Biden ascending to the Oval Office proabably had something to do with it as well, as Antoine Clarke suggests. That doesn’t even bear thinking about.

    llater,.

    llamas

  • That and the inevitable fascist backlash.

    Er, as opposed to the situation now? ;)

  • Paul Marks

    It is perfectly logical.

    The stock market depends on government subsidies (via the Federal Reserve) so any threat to the government is a threat to the stock market.

    A free market country would indeed have a stock market, and banks and so on – but they would be as they now are.

    Even before the 1913 Federal Reserve Act the National Banking Acts artifically stimulated the New York City fiancial industry – for example by making it ILLEGAL to “discount” the debt paper of the big New York Banks. But with the creation of the Federal Reserve things got out of control.

    Even such things as the largest Jewish place of worship in the United States (built only a few years before) were demolished to make room for more bank and other financial services office space. The homes of the rich and the poor alike were demolished – to make room for more and more office space for the artificially stimulated financial industry.

    Physical evidence of the distortion of the capital structure – sorry people but whilst it might look pretty (to some people) but the sky line should not look like that (it is a physical misallocation of resources – almost a “malinvestment style of architecture” dominating the cities of the world).

    A city should look more like (perhaps) Regensburg – plenty of modern industry yes, but with the traditional buildings (the heart of the city) also, and without the financial sector buildings dwarfing (if not actually destroying) everything else. After all the fianncial sector should only be the size of the REAL SAVINGS it should be investing. And NO I am NOT suggesting regulations to make a city look a certain way (in case there are any Captain Miss-The-Points out there).

    Let us narrow it down to New York itself.

    New York State is the most highly taxed State in the United States and has been for about half a century (see the Tax Founation) it is also the most unionised State.

    So New York City should look much like the cities of UpState New York (decyaing places with fewer people than they had in 1910) IT DOES NOT.

    Why not?

    Because New York City is the place (more than any other) where the money from the Federal Reserve (in this case the Federal Reserve of New York) comes out.

    It appears (by the Dark Magic of Central Banking) and flows in the stock market and so on. Everyone in New York City (from the people who work in ths shops to the employees of the City government) depends on this.

    Otherwise New York City would be like Buffalo – do not laugh (after all a century ago Buffalo was one of the most advanced cities in the world).

    Therefore the statism (not radicalism – NYC rejects far left radicalism that would destroy everything) of New York City (especially the financial industry) is hard headed and rational.

    “What about the statism of Calfornia?”.

    That is quite different – they are just nuts (mad, insane…..) the Calfornians (at least the elite) really do believe in this Social Justice B.S. (i.e. to-each-what-the-rulers-think-they-should-have) the internet zillionairs are as crazy as the academics.

    It is a waste of time to try and make sense of the Californian ideology – as it is just senseless.

  • PeterT

    Financial market commentators have a bad habit of making the following statement:

    “stock X fell by 10% because INSERT LATEST NEGATIVE NEWS HEADLINE”

    The fact is that in most cases they have no justification for claiming causality between the news and the market’s behaviour slightly afterwards.

  • BILLIONS was…

    Jesus wept.

  • RRS

    And Warren Buffet smiled!

  • RRS

    One must remember that we are observing exchanges not markets.

  • Mr Ed

    I recall a story that in the 1980s, the Japanese Stock Market fell when reports came that Ronald Reagan had had a heart attack. It transpired that Mr Reagan was in rude health, and Lonnie Donegan had had a heart attack. This is nothing new, perhaps they all believe the ‘animal spirits’ nonsense, or act as if they do.

  • Sigivald

    RRS: An exchange is a market. It might not be a Rothbardian free market, but it is a market.

    Things are bought and sold at bid and ask prices, according to supply and demand.

    There are countless critiques one could make of the modern American (or non-American) stock exchange – but “it’s not a market” seems indefensible on its face.

    Is there some subtle term-of-art definition that I’m missing that makes a stock exchange “not a market”, that I’ve somehow managed to never come across in both Austrian and non-Austrian economics?

  • Dale Amon

    It is indeed a market, and if terrorists nuked DC, there would be a wild time until market pricing took care of the changed environment. I would invest in companies involved in the building industry because it all would be replaced, at our expense, within a few years. The market would ‘realize’ that fairly quickly. Defense companies would also be a good buy.

  • Douglas2

    PeterT –
    If you look at the graphs of market price or activity against time, then it is pretty clear that something coincident in time with the false report on the AP twitter feed caused a jump in volume and fall in price, and then nearly coincident in time with the AP getting word out that the reports were false the trading volume fell and the prices were restored.

    http://www.zerohedge.com/news/2013-04-23/and-what-full-blown-market-exodus-looks

    So, yes, correlation does not necessarily equal causation, but this story doen’t really look much like after-the-fact mythmaking.

  • RRS

    What goods or services are Bought or Sold in financial exchanges?

    What actually transpires are exchanges of assets, usually credits, not the buying and selling of goods or services.

    Now, it is true that assets are often transferred in markets in exchange for goods and services. But, no goods and services move in the financial exchanges.

  • Runcie Balspune

    and my immediate thought is… why?

    Algorithmic Trading.

  • Regional

    Washington and New York are giant Ponzi schemes.

  • Dave Walker

    Scope creep, pure and simple. Twitter’s getting used for things way outside its original intent; at this rate, it’ll be appropriate at some point for it to be classed as critical infrastructure. Going 2FA is A Good Thing, but you the magic 140 char barrier will have to go, if people decide they want to put integrity signatures in.

  • “If the White House… hell, let us think big… and indeed all of Washington DC was fortuitously tragically blasted into a huge smoking crater by an unexpected meteorite, killing every politician, government functionary and policy wonk who works there, surely that would be a economic windfall… “

    Not to mention the world’s largest collective woody among the rest of us.

  • Paul Marks

    Yes a messed up (subsidised and regulated) market is still a market – it is just not a FREE market.

  • Timbo

    In a perfect world.