Social media is good for markets, says Rowan Dartington’s Stephens

The journey from uncertainty to certainty is getting shorter in the markets as social media technology penetrates the global population, Rowan Dartington Signature’s Guy Stephens argues.

It is fast becoming apparent that the social media revolution of the last five years or so has provided a significant boost for the advancement of democracy.

The ability for suppressed minorities to tell their story in real time to the world, without fear of retribution, must be causing angst in the Kremlin and Beijing. Over the last week the speed of events in the Ukraine and their publicity to the West must have caught even Vladimir Putin by surprise.

The leaders of the West have been able to view developments first hand and voice condemnation without any factual doubt, thereby limiting the aggressor’s room for manoeuvre. Whilst we may now have a diplomatic stand-off, Russia knows the world is watching its every move.

If we cast back to Kosovo and the ethnic cleansing that took place, much of the atrocities were only discovered sometime after the events as nobody in the West knew what was going on.

We now live in a different world where Twitter and Facebook have empowered their users to expose breaches of international law and human rights abuse to the world. The influence of this is being seen in the markets whereby the journey from uncertainty to certainty is getting shorter as social media technology penetrates the global population. This is good news for the markets as it stops speculative panic from building and enables the investor to behave rationally.

That said, we still need to be alert to the irrational behaviour behind power politics and the abilities of all politicians to upset markets as they pursue their personal agendas.

For now, the potential unrest in Ukraine appears contained and will hopefully be decided at the ballot box. One would hope that a lesson has been learned that any other would-be aggressors who think they can act in this way face immediate international condemnation and economic isolation.

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