When I was in London last week, I went to a cafe that is located in what used to be the trading floor of the London Stock Exchange. History-phile that I am, I thought I would take a picture of the quite attractive building. I had my phone cam up and was just about ready to take the shot when I felt a burly hand grab my shoulder, and heard a gruff voice–”No photographs ‘ere, sir.”
I thought this ironic, given that one is photographed pretty much everywhere on the street in London. They can photograph you: you can’t photograph Them, I guess.
This came to mind when I read about the NY Fed’s plan to monitor “key bloggers” and various social media (Facebook, Twitter, etc.) for conversations mentioning the Fed. More ominous than the passive “listening” part of the program is the active “influencing” part, intended to “identify and reach out to key bloggers and influencers.”
“Reach out” sounds so innocuous. Brings to mind old ATT ads: “reach out and touch someone.” But there is always reason to be concerned that the Fed’s touch will not be a light one. We don’t need the government doing much more outreach and “influencing”, thank you very much.
I’m not big on conspiracy theories, but the potential for mischief here is large, especially given the government’s (and the Fed’s) proclivity to rationalize ever greater intrusions on privacy and liberty as essential for national security. One can see the Fed convincing itself that to fight “rumors” and “speculation” that call into question the stability of the financial system, it is necessary to exert pressure on those that need to get their minds right, to make sure they get with the program.
This was illustrated by an interaction with an executive from a major French bank that has been in the news of late (which one hasn’t?) who went ballistic when someone else in the conversation asked what financial blogs I read, and I mentioned FTAlphaville and heaven forfend Zerohedge. I mean ballistic. The Gallic spit was flying before he turned on his heel and left in a huff.
Yes, there are potentially multiple equilibria in these markets, and social media and blogs can in theory coordinate shifts from good equilibria to bad (“run away!”) equilibria. But it is quite ominous that the Fed appears to be contemplating the creation of systems and measures that could be used to manipulate information flows.
Hey. Maybe I’ll ask Ben about this when I see him next week. Maybe that’s a great way to get SWP at the top of the list!