After an anonomous reporter falsely reported on iReport (report since removed) that Apple CEO Steve Jobs had suffered a serious heart attack, Apple's stock plunged over 10%, and the SEC has gotten involved. This just goes to show the shaky state the markets are in now, where an unsubstantiated report on an unaccredited reporting service is taken at such a value to impact the stocks of a major company. Furthermore, the involvement of the SEC hints that the feds are taking this seriously. Which they should. This goes to prove the very insecurity of our markets. If one man could (intentionally) make such a false report, there is no reason to believe that someone intent of causing actual harm could post a report that on the surface looked believable such that it could have the same, if not worse, repercussions. Thankfully though, this incident will hopefully put a dent into unsubstantiated citizen journalism. Now, there is nothing wrong with legitimate reporting by the people, so long as the reports are documented by credible sources, be they individuals, pictures (which with the increasing propagation of programs like Photoshop begin to leave themselves open to question), video, or cross-references with professional news services.

At the same time, however, the markets hopefully have learned a lesson from this; namely, not to take all news at face value. I hope that those people who were convinced to sell are feeling rather foolish after determining that what they based their choice on was a hoax. This whole business of trading as a result of political action or supposed corporate tragedies is, I think, getting the entire stock market away from the purpose it was conceived. Stocks should be bought and sold based upon the direction a business is headed, and the potential one sees for success in it. Too often today, people are investing simply because they can, and not really looking into what they are investing in or why they are making that investment. But, as I wrote about before, with the rise in the access of the market to more and more people due to the internet and technology, such occurences are bound to happen.

Wall Street and Tech

In light of the recent financial crisis on Wall Street, yesterday and this morning I came across several interesting articles detailing the crisis from a more technical side. On CNET yesterday, Charles Cooper wrote an article detailing the extent of the crisis into the internet business sector, specifically, advertising. And this morning, on Tech News World, I read an article that details a key aspect that I think differentiates this situation from those previous; the minute by minute knowledge of the public into news and financial affairs.

Both of these articles tie into what I think is the concern that needs to be addressed in dealing with this situation: the role of the internet in our economy. With more and more people becoming internet savvy, the economy is slowly shifting to accommodate them, with more and more options being made available for internet purchasing, and up to date news streaming. With a more up-to-date populace, the entire climate of politics and management needs to move to accomidate them, and in most cases this means increasing the pace at which things are done. Now, whenever Joe Stockholder gets an update on his iPhone that there is the hint of financial trouble in the stock market, he is quick to use the same device to manage his assets. Gone are the days when independent brokers dealt with issues for their clients, and transactions could take hours or heaven forbid, days, to get in contact with the pertinent parties. With this rise in online business also comes the corresponding rise in capital being invested online. While I think the market is still wary of the dot com bust in the early 2000's, I think for many companies, these recent years have been times when they have begun exploring investing more into online infrastructure, to keep up with an ever growing technological world.

Where does this leave us? In many ways, more precarious than where we would be in previous situations. Online business and advertising is completely dependent on a consumer economy, and with the predicted slump in the consumer market, there is no easy to get reserve capital out of these investments as opposed to possibilities with physical reserves. While I think the online market will be in some part shielded because if it's ease of access, never the less, as Cooper addresses, there doesn't look to be any upturn in financial investment in the near future, a prospect which all business everywhere, be they big, small, online or not, should be wary of.