CHAPTER 8Social Media and the Internet of Things

  • —What is the funniest joke a trading program can make?
  • —Hello world.

The news that we see, read, and hear was traditionally chosen by editors based on its newsworthiness. Press releases allowed companies to share news that might not make it into a story. Today, the Internet takes over, with everyone, even inanimate objects, capable of broadcasting on the World Wide Web. Sponsored content sits next to news, and blogs by reporters and the public update continuously. The resulting content creates data series that, when processed in real time, can be used to derive valuable insights.

An event like the Brexit vote helps to illustrate the importance of social media and social media analytics to risk management. On June 24, 2016, the United Kingdom voted to withdraw from the European Union by a margin of 52 percent voting to “leave” to 48 percent voting to “remain.” While polling leading up to the event was nearly even, polls had moved toward the “remain” camp in the final weeks. Such was the perceived sentiment regarding the outcome that the leaders of the “leave” camp were essentially conceding defeat even before the polls closed. As the votes were counted, the “leave” vote began to emerge, and as the evening wore on and all of the polling stations reported their results, “leave” proved to be the outcome. The following morning, the prime minister resigned and a period of political and economic uncertainty began.

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