The False Truths of Social Finance

I’m loving where the social web is and headed in the finance vertical.

Last weekend, I was in New Orleans at the Options Industry Conference and had a chance to talk to a number of pr and marketing execs from the banks.

When we discussed the real time web, user generated content, StockTwits and the finance blogosphere there was this split into two groups.

A minority group gets it and participates to varying degrees dependent upon corporate limitations while the second group, the majority, worries about market manipulation and fake negative stories and rumors about the companies they represent.

I loved hearing this because I understand that these worries are false truths.

If you have not heard the term false truth this is how the Urban Dictionary defines it:

A false truth is something believed by many people to be true but is not. It is usually something that cannot be backed up with hard evidence.

So those with something to lose and fearing the current tidal wave of faster and more direct information flow have precisely the wrong impression.

False Truth: Social media will be used to manipulate markets and spread false stories about public companies.

When I take take a look at what might manipulate markets today I think of how the well heeled and powerful utilize the mainstream media to trumpet well timed opinions to their benefit.

Its quid pro quo.

You think the Fed doesnt use their pulpit to manipulate the media’s reporting? Wait a bit and let this market continue to sink and you will see how quickly reports start leaking in about QE3.

Think about the HFT which cancels more bids in a second then you or most real people will ever cancel in a lifetime.

Meanwhile, social media does just the opposite by spreading the flow so quickly it allows others who might know the real story and who have earned authority in public through the quality of their ideas over time to dispute and question.

So from the social media flow, you can no longer bullshit anything without millions of eyes from all over the globe questioning it with the ability to then broadcast.

If someone, one person in Des Moines perhaps or wherever, can prove a story false or questionable, that message will get trumpeted and rebroadcasted globally almost instantaneaously.

Social media flow actually deters people with nefarious intent from manipulating markets.

If a source tries to spread false rumors, the finance socialmediasphere will parse it in about two seconds. The collective, made up of an endless array of vantages from around the globe, will analyze the authority of the source and the veracity of the claims.

If there is a hint of bullshit, the hint will spread just as quickly.

The social finance web is a global crowdsourced vetting mechanism the likes of which we have never seen.

It is more traditional sources of information and activity that we ought to be concerned about when it comes to manipulation, rumors and the like…