Meanwhile, back in other news that would be big if it wasn't for the worldwide financial crisis and/or Sarah Fey Palin: You may recall how last Friday someone calling themselves "Johntw" posted a note on CNN's citizen journalism blog iReport ("Unedited. Unfiltered. News.") saying that Steve Jobs had been rushed to the hospital due to a heart attack (this is not the first time Jobs' health has been falsely reported, back in August Bloomberg accidentally ran the Apple head's obituary). The report was picked up by multiple blogs before being denied by Apple and subsequently removed by CNN, though not before Apple stocks had tumbled nine percent in 12 minutes; that's the equivalent of $9 billion. Questions were immediately raised as to the identity of the blogger and whether he/she was a short-seller and the SEC is apparently investigating. Meanwhile, CNN has confirmed that the posting on iReport was "not vetted or reported by CNN journalists."

And the citizen journalist rears it head again! Remember the Sarah Palin fake pregnancy story? That, too, initially began as a anonymous post on Daily Kos. And we're all familiar with the case of Mayhill Fowler and her digital recorder, which rocked both Barack Obama and Bill Clinton. Leaving the discussion of the increased leverage the Internet gives to financial rumors for people who can speak to it more knowledgeably than us, there is the larger question of whether citizen journalism is a boon or a danger to the industry. Not to mention, how on earth did we all become so gullible!? To get a better sense we asked citizen journalism advocate Jay Rosen for his thoughts.

There was definitely a failure somewhere in the system if people with investments took the report seriously and it moved prices. That's possible market manipulation, a Federal crime. And a serious breakdown.

It seems to me we do not know exactly where the failure point was.

Open systems, like iReport, or DailyKos.com or RedState.com or dozens of others I could name, do not try to prevent bad information from being posted. That's what makes them open: they do not have any serious editorial controls at the point of "publish this." There may be minimal registration requirements, but if a psudonym and a yahoo mail address is all you need that means there's virtually no check at the point of posting. Instead, open platforms typically have community standards of some kind and they have some system for policing bad actors and for forwarding the best stuff to the front page, usually through an editorial action.

Where in the news system does an anonymous 5am unverified second hand report first get lifted into credible news space?