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Automated News Crawling Evaporates $1.14B
cmd writes "The Wall Street Journal reports that Google News crawled an obscure reprint of an article from 2002 when United Airlines was on the brink of bankruptcy. United Airlines has since recovered but due to a missing dateline, Google News ran the story as today's news. The story was then picked up by other news aggregators and eventually headlined as a news flash on Bloomberg. This triggered automated trading programs to dump UAL, cratering the stock from $12 to $3 and evaporating 1.14 billion dollars (nearly United's total market cap today) in shareholder wealth. The stock recovered within the day to $10 and is now trading at $9.62, a market cap of $300M less than before Google ran the story." The article makes clear that Google's news bot only noticed the old story because it has been voted up in popularity on the site of the South Florida Sun-Sentinel newspaper. The original thought was that stock manipulation may have been behind the incident, but this suspicion seems to be fading.
... the power of the GOOG!!
There is a war going on for your mind.
When you're talking about numbers like that then there is definitely a responsibility somewhere to try to prevent it happening again.
...perhaps they'll be more careful about whose luggage they lose.
I laughed so hard my coworkers made me go outside.
I love Google.
ed duval the very last person
Slashdot Idle had this story 24 hours before the main page.....
"I planned within my means and got a fixed rate mortgage, so where's MY bailout?" -cafepress
So the NewsBots trick the TradeBots, and we humans are left on the sidelines, hoping that we don't get squished in the process.
Sounds like a sad Transformers sequel.
A post a day keeps productivity at bay.
"Google regrets the error." What, it always works for the New York Times!
"I'm sorry, Mr. Schmidt. Your flight has been delayed by two hours."
"Son of a... do you people know who I am? Dammit, get Brin on the phone."
Never happen.
Every brokerage house in the country is increasing their presence in "Automated Trading". The majority of these companies income is now made on small percentage point fluctuations brokered very fast. With the automated systems pulling in that much more money than the traditional ones, and with more algorithms being designed (and held as proprietary info), what would YOU do?
Ridiculous? Yes. Not going away? Also Yes.
Might as well vote to bring back the horse drawn carriage since the price of gas has risen so much lately.
This space for rent. All reasonable inquiries will be entertained at proprietors discretion.
After reading TFA, it sounds like google is LEAST to blame out of the many many automated systems involved. First of all, the damn story should have been dated. That's the tribune's fault. Google doesn't seem to have claimed it as today's news, only ranked it high up. No one should have ever reprinted the story without actually CHECKING WITH UNITED AIR FIRST. That's neither google nor the tribune's fault. That's every service that reprinted the story as new without verifying its fault. Google and tribune seem least at fault because neither ever gave any indication it was a new story.
If an officer ever threatens to taze you, say you have a pacemaker.
Google News crawled an obscure reprint...
The story was then picked up by other news aggregators...
This triggered automated trading programs...
Is there even a live person at the wheel anymore? Or is SkyNet just fucking with us now?
Never approach a vast undertaking with a half-vast plan.
No, that wouldn't be awesome at all. It's amazing how ignorant slashdot users can obviously be if you take a second to think about the consequences of what they suggest. This is, in fact, the second time today I've responded to someone calling for the spectacular failure of a major company, in the middle of a major economic downturn. Ignoring the huge impact Google falling would have on our economy, maybe you can imagine something a little more practical, that hits home: What search engine do you use?
Whale
I am by no means a lawyer but it sounds like the automated trading software has the majority of the blame since it is the one that actually intiated the trade. So what if google descided to reprint old news...nothing wrong with that.
Trying to install linux on my microwave, but keep getting a kernel panic...
Maybe if the industry you were in wasn't on the brink of an economic disaster for the past 7 years an old story being dug up by Google News wouldn't have had such a drastic impact.
I wonder who gets sued for this. Obviously Google's Crawler was at fault, somewhat
How do you figure that? It's doing what it's supposed to. The problem wasn't the crawler, it's the people who thought the crawler was some kind of magic AI that could find relevant stories for them.
Ouch.
That said, are automated trading systems going to be this decade's great Ponzi scheme? I can't believe so many people can be so lazy with their investments to send the stock tumbling that much.
It looks like the ones who'll ultimately get burned from this are are those who are careless with their money. But how soon before people take advantage of viral networking to manipulate Google's algorithms for determining popular news, bring up old doom and gloom articles to intentionally tank a stock so they can buy while it's cheap?
Charisma is the measure of someone's ability to lie with a straight face.
It's gambling, it isn't investing.
Deleted
"Oops."
This smells like a case of the Frankenstein complex to me. Although Google News may have linked the article in its recent results because of the fresh link on the Sun Sentinel home page, both the WSJ article and the Forbes investigation make it very clear that the problem was a human editor who misinterpreted the original article and posted it as new information (with a freshly written headline) in a by-subscription-only investor information service that is carried on Bloomberg trading terminals.
A human saw the story, failed to check the date (there was no date line at the top of the article), refreshed it with a new headline, and republished it on a trading service that was believed to be a source of credible journalism by its readers.
How and why would a 5-year old story about bankruptcy suddenly get "voted up" in at the South Florida Sun-Sentinel so that news aggregators (and google-bot) would pick it up? Sounds very suspicious to me.
So are you telling me that I could set up a "click-bot" to vote up old-news and make myself rich in the ensuing mayhem?
First of all, this is fucking hilarious. Anyone with "computers that robotically [sic] troll the Web for news stories and execute stock trades automatically" deserves to reap the consequences of turning their destiny over to a computer.
Second, I doubt that any capitol was destroyed by this. Wealth didn't "evaporate," it merely moved from stupid people to smarter people.
I only wish I were one of the smarter people, who bought some stock worth $12 for $3. I should write a program to watch for that sort of thing happening, and then automatically buy-- oh wait.
As copyright owner of this comment, I authorize everyone to defeat any technological measure which limits access to it.
Wow. Take a look at Monday's trading history for UAUA. Look at that drop. And notice that it happened on huge volume; several hundred million dollars changed hands within fifteen minutes. It wasn't just a few traders running the price down in light trading.
The stock hasn't come back all the way. It's still down 20% for the week.
Here's the newspaper page that started it all, as archived by Google.
Another point that no one seems to be picking up on is the problem of a lot of news sites neglecting to include a dateline on their stories. I've run in to this a number of times, and it makes it difficult to determine the relevance of a given story. It's a very simple thing to include the date the story was published, but a lot of sites don't seem to bother.
I don't care why you're posting AC
...die by the sword.
If you're trading based on news, minutes or seconds of advantage, and arbitrage, then you'll occasionally get nailed by something unforseen. Like a two-or three year old news story that 'looks' new all of a sudden.
So is someone watching over this, ready to pull the plug if something doesn't smell right? Nope. When the timing is so short, you're at the mercy of the system.
Besides, most of these programs are pure arbitrage. Which is sort of the 'greater fool' theory in play. You make money at someone else's expense. Like they didn't know about something, and you sell out a minute before they find out.
In this case, justice, if there is any, is won by those who saw the activity, realized the mistake, bought low and sold back high. Too bad, big institutional investor. You lost this round.
I can't shed a tear.
deleting the extra space after periods so i can stay relevant, yeah.
Not only is it unnecessary, but such a law would be completely unenforceable. Look at how much trouble online gaming servers have in preventing people from running bots which play their characters for them.
If I can be modded down for being a troll, can I be modded up for being an orc, or a balrog?
When a blip at a local Florida newspaper can combine with a trivial bug to destroy a major American airline in a morning, the economy and the "reporting" that the economy depends on is revealed to be a giant joke.
This episode was remarkable because it was huge, fast, and concentrated in a single high profile corporation. But how much of this broken system's smaller problems go "unnoticed"? Unnoticed as problems, at least, but showing up in all kinds of market valuations and economic decisions based on them that are all built on a landscape of errors, omissions and misunderestimations?
How can you trust an economy that makes mistakes like that? Anyone smart would find any alternative that's less crazy and put their money into it.
--
make install -not war
... it will be now
If you can read this... 01110101 01110010 00100000 01100001 00100000 01100111 01100101 01100101 01101011
Exactly. People who watch the news all day going BUY SELL BUY SELL are just asking to lose money on mistakes like this.
... bought UAL stock at just $3? Oh wait.
now we need to go OSS in diesel cars