White supremacist blogger spurs another kind of panic
Wild claims from white supremacist blogger and radio host Hal Turner are nothing new. After Hurricane Katrina in 2005, Turner, who's based in New Jersey, regaled listeners with tales of traveling "down South," where, he suggested without quite saying so directly, he personally shot and killed 91 African-American looters in New Orleans.
In the week leading up to the inauguration of Barack Obama as the nation's first non-white president, Turner discussed supposed plans to attack inauguration crowds with drone aircrafts armed with sticks of dynamite. "All the assets … are now in-place; deep within the security perimeter. Everything is a go," he bragged in a post to his website. "We have crossed the Rubicon; let history judge us well."
Nothing happened, of course, adding to Turner's reputation within the white supremacist movement for being a blowhard. (Not to mention a snitch — last year, the Intelligence Report revealed that Turner was then a paid FBI informant even while publicly making violent threats against elected officials. Many experts in police procedure harshly condemned the use of Turner as an informant because of his prominent role in promoting racist violence.)
But when Turner claimed to have obtained the results of the Treasury Department's "stress tests" of troubled financial institutions on April 27, a full week before their scheduled release date, bank stocks took a nosedive.
Financial journalists and investors apparently confused the name of Turner's website, Turner Radio Network, with Turner Broadcasting System, started by legitimate media mogul Ted Turner (no relation).
The results of the bank tests were "very bad," according to Hal Turner.
Without posting the documents he'd supposedly been leaked or offering any other evidence to support his claim, he "reported" on his blog that 16 of the nation's 19 top banks were "technically insolvent."
The Treasury Department was quick to debunk Turner's purported exposé. "There is no basis for that report," Treasury spokesman Andrew Williams told reporters. "We do not even have the results yet." Nevertheless, a blog post on the website of The Financial Times linked to Turner's blog post, which the respected British business newspaper called "something of a scoop." A follow-up post at the newspaper site noted that Turner is "widely derided as a racist crank." By then, however, Turner's claim was echoing throughout the financial blogosphere, and a panicked sell-off was under way.
By the end of the day, financial stocks in Standard & Poor's 500-stock index had tumbled 11%.
"The broader sell-off in financial stocks after Mr. Turner's report shows the velocity of news, true or not, in a market where jittery investors are wired to react quickly to information, positive or negative," The New York Times reported.
"It really seemed that they did take it seriously, that this was a leak," Lou Brien, a marketing strategist at DRW Trading in Chicago, told the newspaper.
"The story may have struck a chord with the market as regards to how the tests will look. We reacted for about 20 minutes or a half hour."
Pressed to release the documents, Turner refused. "I will wait until the government releases whatever they release on or about May 4, then rebut the government 'spin' with facts," he wrote. But when the actual results were released, prompting a stock rally because they showed the major banks to be in much better shape than Turner had reported, the racist broadcaster maintained radio silence on the topic, other than posting a bogus news flash about the chief financial officer of Freddie Mac being shot and lynched by a mob outside his home.
"I warned I would incite this!" Turner crowed.