Howestreet.com - the source for market opinions

ALWAYS CONSULT YOUR INVESTMENT PROFESSIONAL BEFORE MAKING ANY INVESTMENT DECISION

March 19, 2018 | Facebook in the Crosshairs: Massive Data Breach, Corruption, Fake News

Mike 'Mish' Shedlock

Mike Shedlock / Mish is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.
Facebook was under huge pressure today as European regulators dove into security concerns. The selloff is long overdue.

Massive Data Breach

Tech shares collapsed today with Facebook leading the way on news of a major security concerns at Facebook.

The social media company’s share price fell by 6.8 percent, as its chief executive Mark Zuckerberg faces calls from US and European politicians to explain an enormous data breach.

Key Points

  • An analytics firm reportedly used data on millions of Facebook users to support the Trump campaign
  • The European Parliament said politicians would investigate whether data misuse had taken place
  • Two US Senators called on Facebook boss Mark Zuckerberg to testify before Congress

Britain’s information commissioner says she will apply for a warrant to access the servers of political analysis firm Cambridge Analytica, which allegedly used data mined from Facebook to help Donald Trump win the 2016 presidential election.

The announcement came soon after British television broadcaster Channel 4 released convert footage of senior executives at Cambridge Analytica saying they could set honey traps for politicians.

“Send some girls around to the candidate’s house. We have lots of history of things … we could bring some Ukrainians in … they are very beautiful, I find that works very well.”

Republican Senator John Kennedy joined his Democratic colleague Amy Klobuchar in calling on Facebook chief executive Mark Zuckerberg to testify before Congress about data use.

Fake News to the Next Level

Former Cambridge Analytica employee Chris Wylie, who blew the whistle on the firm, said it secured personal data in order to learn about individuals and then used it to create an information cocoon to change their perceptions.

“This is based on an idea called ‘informational dominance’, which is the idea that if you can capture every channel of information around a person and then inject content around them, you can change their perception of what’s actually happening,” Mr Wylie told US media.

“[Cambridge Analytica] works on creating a web of disinformation online so people start going down the rabbit hole of clicking on blogs, websites … that make them think things are happening that may not be.”

Fluid Story

I like to wait until at least some dust settles before commenting. News of Facebook Executives Quitting have reversed several times today.

Security Breach? No, Worse

In 2014, Cambridge Analytica, a voter-profiling company that would later provide services for Donald Trump’s 2016 presidential campaign, reached out with a request on Amazon’s “Mechanical Turk” platform, an online marketplace where people around the world contract with others to perform various tasks. Cambridge Analytica was looking for people who were American Facebook users. It offered to pay them to download and use a personality quiz app on Facebook called thisisyourdigitallife.

About 270,000 people installed the app in return for $1 to $2 per download. The app “scraped” information from their Facebook profiles as well as detailed information from their friends’ profiles. Facebook then provided all this data to the makers of the app, who in turn turned it over to Cambridge Analytica.

A few hundred thousand people may not seem like a lot, but because Facebook users have a few hundred friends each on average, the number of people whose data was harvested reached about 50 million. Most of those people had no idea that their data had been siphoned off (after all, they hadn’t installed the app themselves), let alone that the data would be used to shape voter targeting and messaging for Donald Trump’s presidential campaign.

Paul Grewal, a vice president and deputy general counsel at Facebook, wrote that “the claim that this is a data breach is completely false.”

Mr. Grewal is right: This wasn’t a breach in the technical sense. It is something even more troubling: an all-too-natural consequence of Facebook’s business model, which involves having people go to the site for social interaction, only to be quietly subjected to an enormous level of surveillance.

Look at all this BS about Russia stealing the election. Russia played no role. What about Facebook?

This is one reason I have not used Facebook other than to post my blog Feed automatically. I was pretty sure this kind of thing was happening, but not to this extent.

Please check permissions when you sign up for an app, any app, anywhere.

Some of these app permissions let them modify your profile and read your contacts. I have seen it several times recently.

No Thanks.

Mike “Mish” Shedlock

STAY INFORMED! Receive our Weekly Recap of thought provoking articles, podcasts, and radio delivered to your inbox for FREE! Sign up here for the HoweStreet.com Weekly Recap.

March 19th, 2018

Posted In: Mish Talk

Post a Comment:

Your email address will not be published. Required fields are marked *

All Comments are moderated before appearing on the site

*
*

This site uses Akismet to reduce spam. Learn how your comment data is processed.