Why market manias worry so many on Wall Street

This time it’s social media — which has driven politics in bewildering directions over the last several years — pumping up what look like multiple bubbles that could burst in painful ways.

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“There is a huge question about the role of social media here and there are just no regulations around it,” the chief executive officer of one of Wall Street’s largest firms said in a recent interview with a clear note of panic in his voice. “Anyone can go on these platforms and tout a stock or a commodity they own and get a big following and then dump it. It’s pump and dump in a totally new, viral format and there are huge risks that need to be looked at right now or we could be in very serious trouble.”…

“We are now living through the greatest disconnect between financial markets and the real economy that we have ever seen,” said Mohamed A. El-Erian, president of Queens College Cambridge and chief economic adviser to German investment giant Allianz. “And we now have younger retail investors who have disposable cash, are savvy at social media and have cost-free platforms.”

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