A digressive rant on the rot in the financial Twittersphere in the Trump era

If we’d been born where they were born and taught what they were taught, we would believe what they believe. – attributed to Abraham Lincoln

(who also said, “The love you take is equal to the love you make”, but that’s another story)

Spring is in the air! On the East Coast, anyway.

Last week I was fortunate to get out to the West Coast, dodging storms on this side of the country and also over there. And this week I spent a little time sprucing up StreetEYE sources, deleting people who haven’t tweeted in a while, adding the popular, influential, prolific, and relevant new sources. Every year or so around this time I’ll do an updated ranking of the top people to follow.

So I’m in the frame of mind to step back and take a look at the evolution of the financial Twittersphere.

And what I see is not great.

  • Churn. Losing great people like Kelly Evans last summer.
  • Lack of growth. Churn has always been a factor, people fall in love with social media and burn out after a couple of years. But the all-stars like Kelly Evans are not being replaced like they used to be.
  • There’s a subset of influential FinTwit people who protect accounts, allow only approved people to follow them. Or who regularly delete all their tweets, so no one can start a shitstorm over something they said a year ago. Which hurts discovery. And discovery is hard enough. Which is one of the reasons I created StreetEYE, so I would have a way of systematically finding the top people to follow.
  • And the usual garbage troll accounts devoted to stirring up bullshit. Some of which are surprisingly popular. It turns out a judicious mix of clickbait bullshit and timely entertaining commentary is a good way to amass a huge following. (Even if following those folks is a money- and sanity-losing game).
  • And the elephant in the room is Trump. Politics is all people talk about, even in the financial Twittersphere. Those Trump posts are great for engagement, but they suck out all the oxygen for intelligent conversation about markets and economics. (And are possibly terrible for Twitter, if the non-hyperpartisans start tuning out. Ever-increasing vitriol and engagement, ever-diminishing reach.)

The relatively low quality of online discussion is the thread that brings all of those together. Tragedy of the commons, adverse selection, I guess.

Twitter is great. So why does it suck so much?

We generally think most people think more or less similarly to us. We are astounded when we encounter cargo-cultists, flat-earth believers, whole societies of magical thinkers.

When we go online, we find that while our own process of social construction of reality is pretty similar to other people’s, it takes us to very different places.

If we’d been born where they were born and experienced what they experienced, would we really believe what they believe?

It can be mind-expanding that social media takes you outside your bubble, brings opposites together, like some virtual A train to Times Square. But it leads to conflict.

Now, to me, it’s pretty obvious that women often get a raw deal from society. I follow some smart, funny women who are pretty feminist. And not gonna lie, even though my left brain mostly agrees with them, the nursing of a litany of petty grievances, the constant mocking of white male privilege, ‘mansplaining’, ‘manspreading’, and whatnot, can get really annoying.1

There are also some males who are into, shall we say, non-female-friendly male culture. Pickup artists, ‘red pill’ and whatnot. Immature maybe. Lacking self-awareness and empathy. Assholes.

When those two mindsets encounter each other on social media, they’re not gonna have a good time.

Cognitive dissonance arises. Sparks fly. Much heat is generated and little light. And both sides walk away with even more strongly confirmed priors, that men and women on the other side are mean and nasty and out to oppress or emasculate them.

I share an alma mater with Barack Obama, I was a freshman when he was a senior. He talks like me, thinks like me. Well, I wish, because he’s smart and cool and funny. I’m predisposed to like him.

That same intellectual approach apparently offends a lot of people who see it as condescending.

When Donald Trump sees Obama, clearly he sees something totally different from me. I take personal offense at the whole birther thing and view it as an original sin that can never be expunged. But clearly it resonates with a lot of people, to my disgust and amazement.2

And the Trump supporters confronted with what is apparently my sort of ‘condescension’ just dig in, double down, and reinforce their views.

I don’t really know why Trump supporters support him. As Pascal said, “The heart has its reasons, which reason cannot know.” Or JP Morgan, “A man always has two reasons for the things he does – a good reason and the real reason.” I really don’t really believe ‘liberal condescension’ is the reason. That sounds a lot like the cognitive dissonance someone without self-awareness might experience when untenable positions meet inconvenient facts and reason.

Like being virulently anti-Muslim, and at the same time not understanding why Christian fundamentalist values arouse opposition.

You can’t reason someone out of an opinion they didn’t arrive at through reason in the first place. The answers are more likely to be found in mass psychology, Gustave Le Bon, in Goebbels, in the inability of Hillary Clinton to construct a narrative with mass appeal, to run as a candidate of change instead of as a machine politician of the establishment, to do electoral math (just like in 2008 vs. Obama).

As the world gets smaller, the ability to put yourself in others’ shoes a little bit is more important. It would help if people dialed down the online vitriol, learned to roll their eyes and go about their business, instead of going bananas over a dongle joke or someone wanting to tone down the pubescent male fantasy world of video games.

But civility has to be a two way street. The online hate against Obama was really something. Aligning yourself with that, positioning yourself as the leader of that, and calling people who disagree with you ‘enemies of the American people’ sure isn’t going to help.

People say there’s a problem with social ‘filter bubbles’. The underlying problem is parochialism, intolerance. People go bonkers when they encounter anything outside their norms. Was there really less of a filter bubble 40 years ago, when different parts of America were even more like different countries, with different languages, foods, music, brands, and there were only 3 networks with anodyne non-culture that filtered out anything controversial?

Is social media making us worse people? Is it making us dumber?

I’ve written a little bit about ‘fake news’, since I think I know a little about news and machine learning.

Cathy O’Neil has made a schtick out of saying that big data is a ‘weapon of math destruction‘ and problems like ‘fake news’ can’t be solved by machine learning.

She’s mostly wrong…the ‘fake news’ we’re talking about, of the ‘Pope endorses Trump’ variety, is easily detected by the 20% of the informed, critically thinking population, and so it can also be detected by robots with much better information about where it came from and how it spread. Google does a good job with spam and it’s essentially the same problem.

Cathy O’Neil is mostly right that big data relies on patterns of human-created data, that data will reflect human biases (an even more appalling example), big data is garbage in, garbage out, and you can’t dispense with old-fashioned evidence-based critical thinking, gumshoe reporting, to prime that pump of evidence-based reasoning.

And also that it may concentrate winners and losers and wealth. (Same may apply to passive investing, machine learning-based investing).

There’s a classic bias/variance tradeoff.

If you say, I’m only going to use Bloomberg-vetted information in investment decisions, you’re going to be slower to respond to new information than if you react to every tweet and blog and market rumor.

You need a filter that is adaptive enough to surface good social media experts without necessarily waiting til they become Bloomberg pundits, while not trusting every source of flackery, disinformation, and idiocy.

If everybody followed Cathy O’Neil’s advice, no one would ever have started reading some obscure but clever blogger like Cathy O’Neil, who owes her career as a big data pundit to social media, and maybe some big data-assisted discovery like Google searches, Twitter’s recommendation engine.

You need both shoe leather and tech. You need to be selective in which sources you trust, and you need technology to deploy against the armies of bots and data scientists looking to spam, deceive, and manipulate you.

Social media can make you smarter and quicker. You need both, the Cathy O’Neils and big data.

If everybody just watches CNBC, everybody gets super herdy (bias). Everybody watches different social media filters, that’s less herdy, maybe inefficient and noisy (variance).

Big data filters some of the noise, aggregators aggregate, Bloomberg goes and hires the Cathy O’Neils, that might eliminate some variance, bring back some bias, but maybe with an overall better level of discussion.

The noise level of the chattering and flaming on social media continues, occasionally something rises above the noise, gets picked up by aggregators, Bloomberg etc.

Big data isn’t inherently bad, in fact you need it on your side to to get maximum benefit from all the noise, to defeat the dark forces of spam and fake news. It’s an arms race, the forces of evil use the magic of big data and you need your own magic to counter their spell.

But it’s imperfect magic, when sophisticated, well-funded people finance CNS and Breitbart, and use sophisticated personalized marketing to raise them to a higher profile among their target audience than more balanced, fact-based sources, you need machine learning just to level the playing field a bit. And so much of the media is so self-serving and bought and sold by vested interests and you’re bombarded with so much garbage that there is no substitute for critical thinking.

On the whole these days, I’m probably more in agreement with Cathy O’Neil about big data tilting the playing field toward the forces of evil than I used to be, when it seemed everyone having access to all information anytime anywhere would be great for well-informed democracy.

Is the financial Twittersphere destined to be the Mos Eisley cantina of financial media? Does social media make participants more vile, primitive, and unhappy?

Facebook and social media are the McDonald’s of social interaction. Ubiquitous, convenient, enjoyable, not necessarily unhealthy if consumed mindfully and in moderation. But they are engineered to be highly addictive and appeal to most basic tastes and impulses.

The types of social interaction they favor are single-serving emo BS for ‘likes’. Extreme views. Comment wars. Trolling.

Sometimes there are positive viral movements like the Ice Bucket Challenge, petitions, GoFundMes for Jo Cox and Pulse victims.3

But often it’s pretty mean and nasty stuff.

One thing I think we should have learned is that Facebook’s real names work better than Twitter’s pseudonymity. (Which maybe Twitter is moving away from, gradually). Social media needs reputation management. People should be able to control whether random trolls can interact with them. Maybe people should need to accumulate reputation to post stuff, or for their posts to have reach, or people should be able to filter who can interact with them based on reputation. Maybe people should accumulate mod points to bump or bury others’ posts. But it should be transparent (which Facebook is not, at all).

Another thing we should have learned is, folks who spend their entire social lives in this highly engineered environment, are like people who only eat at McDonald’s, or never get off their couch from watching Fox or CNBC, or out of their cars.

It’s not just a ‘fake news’ problem. The whole social media ecosystem bias/variance tradeoff needs to be re-tuned for more quality and less noise.

Maybe social media would be better if there were mechanisms that encouraged people to limit their usage. Maybe it should cost reputation if you are constantly tweeting. Maybe there should be options to remind you if you’ve been online more than an hour a day, or to cut yourself off entirely when you hit your daily budget.

There are ways to optimize for quality over quantity both in what people see, and how they contribute.4

The reach and activity might go down a little, and the quality might go up a lot, paradoxically increasing reach and activity in the long run.

I don’t know how I feel about Zuck’s manifesto until it produces some real features and products (see here and here) but social media, like a mall, is a highly engineered experience, and it needs some intelligent design to not be terrible and not make the world worse.

Maybe there’s a happy medium between the Twitter free-for-all and more closed communities like SumZero and Value Investors Club. Where the worst noise is disincentivized and good stuff rises above the noise.

Social media gave us Trump. And Trump is shaping up to be a disaster. Ergo, social media is a disaster for civilization?

When I created StreetEYE, I thought social media, people freely sharing information, with the best information and the greatest people percolating to the top, was the way of the future. It hasn’t happened yet. The tools may need to evolve. It may take a new generation of platforms and tools. But it’s going to happen.

When we can give people like Kelly Evans the reason to come back.

On life’s vast ocean diversely we sail. Reason’s the card, but passion the gale. – Alexander Pope

Those who will not reason, are bigots, those who cannot, are fools, and those who dare not, are slaves. – Lord Byron

1 I can appreciate some gentle witty mocking, but to the more extreme women, maleness seems something offensive per se, while a dose of estrogen will excuse just about any misdeed. The black activist community picks battles judiciously by comparison. I’d go so far as to say most blacks are more judgmental about black lawbreakers than most white folks. Anyway, that’s one way I read those statistics showing white cops are less likely to shoot blacks than black cops. You pretty much have to kill an unarmed child to get a black protest movement going, whereas some women seem on the edge of violent uprising over a dongle joke or ‘manspreading’.

2 Blinding glimpses of the obvious: am not a Trump fan, and he’s a very weird guy, he’s outside the norms of politics, reality, decency. And not in the good way that shakes things up.

If a political opponent is going to say Obama may not be a citizen, or didn’t go to Columbia, or didn’t deserve his spot at Harvard, it doesn’t tell me anything about Obama, it tells me about the person who’s spreading that.

I have friends with personal experience with selecting editors of school newspapers, law review, etc., and your peers don’t select you unless they think 1) you’re one of the top people and 2) a decent guy they’re going to get along with. Anyone who says Obama was somehow undeserving or not legit is 1) ignorant, 2) of poor moral character, or 3) pandering to people in those groups. Which group do you think Trump is in?

One can not like Obama’s politics or as a human being but a lot of the conversation about him reflects very poorly on us as a country.

I get personally offended by people who promote the notion Obama was not legit, and Trump based his whole career off that. Where the f*** are Trump’s Fordham transcripts that somehow got him into Wharton? We know something about Ivy affirmative action for the rich too. Did Trump have the grades or scores to get into any grad school, let alone Harvard, let alone be President of Law Review? The guy doesn’t read books.

If Trump believes 10% of what comes out of his own mouth he’s 100% delusional. People really see what they want to see, and Trump is Exhibit 1 of that kind of crazy-ass magical thinking, and his supporters are in the same category … how do they not see he’s a promoter, has no deep interest in policy or ideology, knows practically nothing about economics or foreign affairs, cares about no principle or ethic beyond gratifying his ego and the chips on his shoulder, has angry, divisive views, indecent behavior that should have disqualified him, is supported by unabashed Nazis. He says stuff politicians don’t say, because when they say it and people believe it, it sinks us as a nation.

And yeah, seems kind of odd that he picks feuds with NATO, EU, Merkel, China, the Fed, the CIA, Mexico, but one country loves him and he has nothing bad to say about them…Weird! As someone once said, ‘there’s something going on there.’

He’s got the ‘B’ and ‘C’ string appointed to the Cabinet. I mean, can you even imagine Dimon or Blankfein or Paulson working for this guy? They wouldn’t even lend the guy a fiver. And on the foreign policy side it’s even worse, he has the entire national security establishment on his blacklist. And the guys who aren’t blacklisted are wary of working for him. I’m not even so worried about Trump because he’s a clown. He could start a war but I think the military and Congress wouldn’t let him. Unless there’s a dirty bomb in NY or DC and then all bets are off.

But when Trump craters, a lot of people are going to be very very angry, and I don’t think they’re going to turn to an establishment type, they’re going to turn to another candidate of change on the left or right. And I’m worried about stability in the rest of the world. If the US and the UK that had fairly rational economic policy are going populist, what the hell is going to happen in southern Europe in the next downturn? What about India, and Turkey, and the rest of the Middle East?

3 Viral memes giveth, and viral memes taketh away. Social media creates a Jo Cox murder or a Comet Ping Pong or a Dylann Roof, and then mobilizes to helps the family of the victims. Doesn’t quite even out.

4 Facebook has all the data, they can optimize for anything: duration of interaction on items, clicks through to items, people you frequently message, are tagged with, are in the same location with via your smartphone. They have an incentive to optimize for things that give them more ad revenue in the short run, but in the long run also for things that increase the depth and quality of interaction.