Rick Bookstaber on the three ages of information:
The age of private information. There was a time when information gave an advantage, when there was an edge to getting information ahead of others. Rothschild famously received early news of the British victory at Waterloo; commodities traders hired teams to wander the cocoa fields on Ghana counting pods; equity managers used their influence to get a jump on earnings announcements.
The age of too much information. The push toward transparency eroded this advantage. But the requirements for transparency throw out so much information that it is difficult to find what is relevant. Information can hide in plain sight; if every drug may cause nausea, insomnia and drowsiness, then we get to the point of, “I have to list everything I can think of, but you know the game. Just ignore it and try the stuff out”. The echo chamber of reposting adds noise to any news that is worth repeating, and much that is not.
The age of viral information. Information is moving from being the bedrock of market efficiency to a source of crisis. The risk for the market is not the news itself, but what news gets drilled home through so many channels that people act on it; we cannot anticipate when information might go viral and sweep the markets.. For retail markets – the municipal bond market and money market immediately come to mind – it is easy to envision a “USA Today effect”, to use an anachronistic expression, causing a run on the bank.