Fake AP Tweet Tanks Markets
Early afternoon on Tuesday, markets plunged after Associated Press Twitter
account was hacked, posting a fake 140 character tweet that described a terror
attack, consisting of two explosions at the White House with injuries to
President Barrack Obama. The AP released the following statement at 1:12 pm:
"The AP twitter account has been hacked. The tweet about an attack at the White
House is false. We will advise more as soon as possible." Prior to the fake
tweet, the Dow Jones Industrial Average was up over 135 points before plunging
to a loss of nearly 12 points within minutes, with the release of the fake post.
With the release of the fake tweet, the Dow plunged by over 150 points but
recovered in a time span of nearly 5 minutes. Other markets sank on the fake
posting as well but regained most of the losses, shortly there after. The
reaction of the markets on the negative news shows just how vulnerable we are as
humans and the quick rebound shows just how resilient, we really are.
Senator Sherrod Brown, Democrat of Ohio, and Senator David Vitter, Republican of
Louisiana provided details about a bill they plan to introduce to limit
too-big-to-fail banks. The bill includes a provision that would require large
financial institutions to calculate their capital in a simpler way. The
legislation would focus on tangible equity rather than risk-weighted systems
that are currently included in a global agreement on bank capital and, would set
minimum capital requirements for a handful of big banks with over $500 billion
in assets. Additionally, the bill will seek to ensure that "ancillary"
activities at large financial institutions will be cut off from taxpayer-backed
safety nets, including the Federal Deposit Insurance Corp. deposit insurance and
the Federal Reserve's discount window. The bill was announced at an American
Banker forum on Tuesday, to a group of bank lobbyists, academics and analysts.
It was reported on Tuesday that MF Global Trustee Louis Freeh filed a lawsuit in
bankruptcy court against former Chief Executive Jon Corzine, Bradley I. Abelow
former Chief Operating Officer and Henri J. Steenkamp former Chief Financial
Officer. The lawsuit alleges "acts and omissions" against the firm's officers
and says the actions "culminated in the business collapse of the company and the
bankruptcies of the debtors." At the time of bankruptcy there remained $1.6
billion in missing funds of which the trustee believes will be restored.
Markit reported the U.S. flash manufacturing purchasing managers index fell to a
52.0 reading in April from 54.6 in March, striking the lowest reading in six
months. New orders slowed in April with employment expanding at a slower rate.
Chris Williamson, chief economist at Markit, noted that the drop in the U.S. PMI
was the sharpest since June 2010. The decline "raises concerns that the U.S.
manufacturing expansion is losing momentum rapidly as businesses and households
worry about the impact of tax hikes and government spending cuts," Williamson
The Federal Housing Finance Agency said Tuesday that during February, U.S. home
prices rose by a seasonally adjusted basis of 0.7%. The FHFA index is calculated
by using the purchase price of houses whose mortgages have been sold to or
guaranteed by Fannie Mae or Freddie Mac. Home prices were up 7.1%, in the 12
months ended in February and the index has not declined in any month since
The U.S. Department of Commerce reported Tuesday that during March, sales of new
single-family homes rose 1.5%, a signal that the housing market continues to
gain strength. By region: in the Northeast new home sales rose by 21%; in the
South new home sales rose 19%; in the West new home sales fell 21% and in the
Midwest new home sales fell 12%. During March, median new home sales price fell
6.8% for the largest drop since February 2011. The seasonally adjusted annual
rate of new-home sales rose to 417,000 in March from 411,000 in February.
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April 23, 2013