[108260] in Cypherpunks
Government data leaked on Net--again
daemon@ATHENA.MIT.EDU (damaged justice)
Tue Feb 9 23:39:13 1999
Date: Tue, 9 Feb 1999 23:22:40 GMT
From: damaged justice <frogfarm@yakko.cs.wmich.edu>
To: cypherpunks@algebra.com
Reply-To: damaged justice <frogfarm@yakko.cs.wmich.edu>
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Government data leaked on Net--again
By [2]Reuters
Special to CNET News.com
February 9, 1999, 3:25 p.m. PT
URL: [3]http://www.news.com/News/Item/0,4,32211,00.html
For the third time in as many months, a sensitive piece of U.S.
economic data was prematurely released on the Internet today, renewing
concerns on Wall Street about controls over market-moving information.
The Federal Reserve Bank of Richmond posted its monthly survey of
regional manufacturing on its Web site about half an hour before the
scheduled 10 a.m. EST release time. Though the Richmond report is
considered less important than U.S. employment and inflation data
released early by the [4]Labor Department in recent months, market
analysts said it was still part of a worrying pattern that must
quickly be stopped.
The mounting number of accidental early releases have spawned a flurry
of unfounded market rumors before major economic reports during the
past few weeks. But as more and more government agencies rush to
publish data on the Internet, many view the glitches as temporary
growing pains that soon will be rectified, and expect that the trend
toward cyberdata will only accelerate in the future.
"The problem is people who don't fully understand how to release data
on the Net," said Don Fine, chief market analyst at Chase Asset
Management. "Please first learn how to use the computer before you get
on it."
The government meticulously guards the secrecy of its data, and
usually does not even show them to the president until after the
market closes on the eve of their public release. So Fine said he was
"astounded" on January 12 when the [5]Bureau of Labor Statistics (BLS)
accidentally released the Producer Price Index (PPI) a day early, just
two months after its embarrassing leak of the non-farm payrolls report
in November.
In the aftermath of the payrolls fiasco, BLS Commissioner Katharine
Abraham said the only other similar occurrence she knew of was an
accidental issuance of some information on the PPI on the Web in 1996.
But the BLS kept that incident quiet until reporters raised questions
about precedents after the payrolls incident in [6]November last year,
surmising that no one who understood the figures had seen them at the
time.
Fine said it was hard to imagine the Richmond Fed and other agencies
that publish data had not put sufficient controls into place after all
the hoopla surrounding the BLS blunders.
The Richmond Fed did not respond to repeated calls requesting an
explanation of its premature release.
But Fine and others are confident the government and the Fed soon will
plug up their leaky computers.
"If it is going to be a recurring affair, it would have huge
ramifications," he said. "If it occurs again and again, they would
have to stop using the Internet as a form of release."
New Jersey-based economist Ray Stone, managing director of [7]Stone &
McCarthy Research Associates, said the leaks had made markets more
vulnerable to a "rumor mill" surrounding data.
The growing list of snafus gives traders room to manipulate the market
to their advantage, forcing market participants to give more credence
to rumors they would have dismissed confidently in the not-too-distant
past.
Stone inadvertently discovered the October non-farm payrolls data on
November 5, 1998--a day early--when he was scanning the BLS Web site
for some of the details released previously.
During the past two weeks, rumors of an early release of the fourth
quarter Employment Cost Index and the January employment report both
moved bond prices. Both rumors proved to be [8]false.
Richard Gilhooly, a senior bond strategist at Paribas, said the
unsubstantiated rumors on the ECI data added volatility in the bond
market.
"It has cost investors money," he said.
Despite the problems, Stone remains very enthusiastic about data on
the Internet. He said it levels the playing field for all market
participants by making market-moving information available to everyone
at the same moment.
"Security measures are absolutely necessary. The leaks of information
are a disruption and you cannot have that," he said. "But this is the
wave of the future. They won't stop [releasing data on the Internet].
It's not going to go away and it will accelerate. It would be a
mistake to reverse it."
Analysts predict that Wall Street firms now will monitor the "number
mill" sites on the Web more aggressively to exploit the advantages of
official mistakes.
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4. http://www.dol.gov/
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7. http://www.smra.com/
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