This has been a process happening for a long time, but for those in finance, the value of Twitter increasingly equaling or surpassing the value of traditional sell-side research from Wall Street analysts.
This weekend's surprise bailout of Cyprus (surprise, because of the fact that depositors in Cypriot banks are seeing a 'one-off' tax) is a major moment in the evolution of financial information.
Because the news was so surprising, and because there's so little time between when the bailout was announced early Saturday morning, and when trading begins Sunday evening, there's been an aggressive thirst for information and analysis on what it all means.
But the sell-side has been fairly slow, and the Twittersphere has come to the rescue.
The man everyone is reading is the pseudonymous twitterer @pawelmorski, who has written two must-read posts already on the Cypriot bailout. The first is here, and the second is here.
In the second one he writes:
After a surprisingly long gap, the verdicts from the Investment Bank research departments are dripping in. In short if you can sell euros at Friday’s close you probably should (you can’t – pre-pre-market at 6pm London or 7am Auckland is about a percent off) but the tone is one of wariness rather than panic. The absence of Street research interest probably tells a bigger story than what they actually say. Only Barclays bothered with the Sunday conference call, but we’ll probably get more chances to dial in and be told that the research houses don’t really know what’s going on. We can also enjoy the spectacle of people who right now couldn’t name him interpret the importance of the intervention of Archbishop Chrysostomos. Not for the first time, Twitter was ahead of expensive analysts in concern about deposit haircuts.
Among the few analysts who have put out stuff this weekend are SocGen's Kit Juckes and Sebastien Galy, currency experts who both happen to be on Twitter, and are extremely plugged into the pace of demand for information.
Kit's latest email blast tells clients to go read three blog posts to really understand the situation:
There are links to three (critical) analyses of the move below, from the FT’s Alphaville blog, from the Schumpeter blog in the Economist and from the ‘tweeter’ Pawelmorski. I think they are the three best summations of the response of market respondents over the weekend.
http://ftalphaville.ft.com/2013/03/16/1425732/a-stupid-idea-whose-time-had-come/ http://www.economist.com/blogs/schumpeter/2013/03/cyprus-bail-out http://pawelmorski.wordpress.com/2013/03/16/cyprus-a-brutal-lesson-in-realpolitik-2/
This is pretty cool. An "expensive analyst" telling clients to read three posts, and to take the word of a pseudonymous "tweeter."
Other journalists noted the same thing, how fully Twitter dominated traditional research shops.
@thestalwart it really was. Thought it was just me for a while. Twitter vastly superior.
— Katie Martin (@katie_martin_FX) March 17, 2013
As for why it took so long to get reading material, another pseudonymous market pro basically just chalked it up to good old fashioned lack of knowledge on the subject.
@thestalwart @katie_martin_fx People don't even know that Cyprus' capital is Ljubljana! (#seewhatididhere). That's why it took so long.
— barnejek (@barnejek) March 17, 2013
And this is why Twitter is so killer.
In a very unusual crisis, the local knowledge was key. So it was essential to follow someone like Yiannis Mouzakis (to get the reaction from the Cyprus street) or Nick Malkouzis and Efthimia Efthimiou for the Greek perspective.
Bottom line: The value of Twitter (and Twitterers' blogs) have been growing in value for some time.
But on a weekend, with a high-degree of local knowledge and nuance required, the best information out there was all free.
Now go read Pawelmorski's full post here >
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