>>> welcome back. right now the dow is down about 12 point. but it is much calmer on wall street than we witnessed yesterday afternoon. the government is looking into the hacking of the associated press's twitter account which referred to a flash crash. it created a post saying there were explosions at the white house and the president was injured. the dow plunged more than 140 point wiping out more than $140 billion before gaining it all back. joining me live now, tyler mathisen , co-anchor of cnbc's "power lunch." i'm curious, looking at the tick tock , tyler , how soon before people realize what happened there.
>> it happened quickly. i was on the air at the time, tamron , and my cohost, sue herera , noticed that dow dove about 150 point there, very quickly. and there was a lot of scurrying down on the floor of the new york stock exchange . simultaneously, i was hearing in my ear that this hack and presumably, we knew very quickly, that it was a bogus hack, had taken place, and that that probably explained it. it was a matter of a couple of minutes. one of the things we don't know yet, tamron , and really one of the focuses of the investigation, is whether this attack was simply a malicious party trying to unnerve a nation already on edge after the boston bombings last week or whether it could have been someone somewhere trying to profit by the very quick down and up that it caused in the stock market . because if you put that kind of fake tweet out there, you know that the markets are going to pick it up and react negatively.
>> i think, tyler , you know because this is your business. but i think most people would be stunned to know that based on a tweet, that the markets could swing in such a way so give me -- educate us on how that works, of all things that a tweet could cause that.
>> sort of yes and no, tamron . the market reacts to rumors all the time. rumors there's been a bombing at an oil installation in nigeria. or things that are filtered through one way or another. somebody tells somebody. what is different now is the speed and the transmission method, in this case, by twitter. and what happened in this case, clearly, is that there are an awful lot of program traders, who are following lots of different feeds. news feeds, twitter feeds, all kind of sources. and those traders' computers pick up the feeds. pick up the language they would see, ap, bombs, white house , and immediately, they would send cell signals, ask questions later, or react now. so that how it really happens. is it these were all computerized trades that o were getting executed, based on the alga rhythms in the system. just like google used algorithms to lead you to searches somewhere, those algorithms prompt trading.
>> okay, tyler mathisen , thank you. let's we heard tyler complain, but it still leaves you scratching your head when you think about the amount of money wiped out, even though it was earned back, how does this happen? what's the next step in making sure it doesn't?
>> i think the more disturbing thing is that unlike a run of the mill rumor, this appeared to be an official ap report. from what we can tell now, someone hack need the twitter page --
>> well, if we learned anything last week, reports could be wrong. if you didn't know it, after last week, you know it now. so the tweet was not verified.
>> we do put a certain amount of credibility in gate keepers that we trust. if msnbc came out with a tweet, you would react to it differently than if your friend, joe, came out with a tweet. charles schwab , which hosts trillions of dollars of our assets, bank accounts and trading, their website was hacked for about an hour and a half. you couldn't get on the website. it happened again this morning for periods of time between 10:00 and 12:00 . imagine if you have a rumor hitting and charles schwab 's site down because of hacking, this is one of those risk factors. unless you keep your stuff in cash in a mattress or gold, there is nothing can you do about it.
>> does it speak to the biggerish university frailty? we talk about washington, all street and how big women an guys are doing, but nevertheless, this is still a fragile situation.
>> and when it is electronically enhanced, and tyler is right, a lot of this is computer driven and al algorithm, it can all spiral down quickly. but it can also spiral up quickly.
>> all right, thank you very
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