Twitter Politics and Market Efficiency
Donald Trump tweeted, the crowds went wild, the markets overreacted, then they recovered.
As you can see Crypticat does not follow Trump, or Clinton for that matter. Sometimes US politics and the main stream media makes my head spin; politics down south are so polarized and they evolve much quicker than up in Canada. One thing I do like is the Twitter politics.
sourceYou don't have to be a follower of the 45th president to know what he is thinking about. The media loves retweeting and analyzing every written word, typos included. Before I could check Steemit or take a sip of my coffee, I knew the Donald fired shots at China this morning. I love the way this news is disseminated-so fast, so efficient, so fair.
Social Media is Great for Transparency and Fairness
When unfiltered, Social media is extremely equitable. Forget insider information, when the POTUS Tweets, everyone knows at the exact same time. There is no time for insiders to trade on the information, literally everyone with internet access knows what Donald is thinking before there is a chance to filter it. Previously presidents and powerful people would talk with insiders who may or may not have used that information to their advantage before spreading the news to the public. We now have direct access to the source, this is incredible if you think about it. We literally have the power to read the presidents mind, it's amazing. No one knows what he is going to do, until he Tweets about it and we all have equal access.
Efficient Market Hypothesis
The Efficient Market Hypothesis (EMH) states that asset prices reflect all available information. The strong form of this hypothesis says insider information is useless because it is already incorporated in asset prices. Most people don't believe this and only agree with a weaker form of the hypothesis that prices accurately reflect the news. Twitter politics makes the strong form of the EMH more of a reality, it closes the gap between the power of insider information by spreading news fairly. If everyone Tweeted everything they knew right away, the markets-and the world would be a fairer place.
What's the Downside?
It's pretty obvious. For those of you reading who think I am an idiot for thinking Donald's Tweets are a good thing for democracy, I will agree that everything he says on Twitter is not politically correct. He is not an excellent orator like his predecessor and doesn't care if he offends someone or speaks his mind. More often than not, his unfiltered words should be filtered. Or shouldn't they be?
Some worry that one day a hot war could be started via Twitter. I don't think President Putin or Xi are dumb enough to start WW3 because of what they read on Twitter. More likely traders will over react to the new age of instant information and lose some money in the markets. People who trade because of what they read in the News will lose money about 50% of the time. Let's face it Twitter is now the unfiltered, raw News. Get used to it!
Gone are the days of having to read someones opinion on someones opinion, now I can get the words directly from the horses mouth!
My only issue is I wish he would Share to Steem, too. Hopefully turning off the rewards pool because that would be strange.
I tweeted my post and I tweeted @realDonaldTrump if everyone tweeted their posts Steem and Steemit would gain more traction!
Follow @RealCrypticat and I will buy you some SBI, this goes for anyone else!
Retweeted and Hearted
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Got so excited to have a real twitter follower I bought you 11 shares of SBI
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