Friday, September 19, 2008

Google News malfunction caused the collapse of shares

Amazing incident occurred on the U.S. stock market last week. In the financial newsletter Bloomberg got news that the airline United Airlines has applied for bankruptcy. Bear market responded predictably, and stocks immediately fell down. Within a few minutes, the total capitalization of the company fell by about $ 1 billion only after five to ten minutes, people figure out what's wrong: to traders came, that this news is actually six years ago, which hit a mailing list by mistake. The course, of course, quickly recovered back. If you know of such a motion quotes in advance, the less dramatic movement can earn huge money.

As news of the forgotten archives to get to tape hot news? That would have been impossible without a series of fatal coincidences, errors in the algorithms of online services and human error. Assuming that someone planned the whole chain of "coincidences" in detail, it's just great scam, which brought him tens of millions of dollars for a few minutes. And to prove his guilt there would be absolutely impossible.

The story also sheds light on the mechanisms for information dissemination on the Internet and the potential vulnerability of online media, as well as fully automated trading on stock exchanges.

Here's how everything happened.

Text of press release, a statement of bankruptcy, as it turned out, this content newspaper Chicago Tribune for December 2002.

It all started with a god-forgotten site of a small sheet Florida Sun Sentinel, which belongs to the same media as the Chicago Tribune. Since this is a common holding company, the Chicago Tribune archives are available from Sun Sentinel. Articles are physically stored on their server and are open to the public six years. But they are in the area of the site, which is prohibited from entering the search bots.

But on Sunday the text of the press release hit the list of most popular articles on the site Sun Sentinel (why it happened - it is not known, but attendance at the site of a small, so nothing surprising in a random spate of popularity not). Thus, the reference to archive material off to the home page of Sun Sentinel, which is indexed in Google News.

And here the first bug. Algorithms Google News found that the material in 2002 - is "new material" and put him in the new material in his aggregatore Obviously, the system Google News does not take into account the date news, but just in a search index of the text was not, and therefore the news felt "new".

Of course, Google undertaking of the charges. They explain that the site Google News news was in the "new" because it is really fresh material, which did not exist previously. In the text of the press release was clear date: 2002. If any of the people are not drawn to the attention, it's saying, they have problems.

What happened next has been human error. Editor agency Bloomberg saw the "fresh" news and incorporated it into a ribbon of hot news, which is spreading among traders. Naturally, in treyderskom to be taken into account seconds, all done in great haste. One can understand the editor, which weakened the credibility of vigilance and trust Google News.

Added that such a sharp drop in the shares would have been impossible if the traders were men. But nowadays, more than half of transactions on the exchange is automatic - treyderskimi special programs that instantly catch the slightest movement of quotations and activate programmed algorithms action. Once started falling quotations in these programs began to operate immediately triggers the dumping of shares. The wave of plum assets back into a snowball. Everything happened for a few minutes.

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