Too much of a good thing: iPhone sales are approaching the 10 million mark. Or maybe he got sick trying to digest that $700 billion bailout, a.k.a. the Failure of Modern Capitalism (or How the Chickens have Come Home to Roost). I’m beginning to rethink the definition of “organized crime” as the American public is held hostage by wise guys who turned Wall Street into Heartattack and Vine.

Tom Waits:

John Hammond, Jr.: Wicked Grin

In the wake of all those “serious” reports about the health of Apple CEO Steve Jobs over the summer (such as Cramer’s stock manipulation game and Businessweek’s The Real Issue About Steve’s Health), and the mistakenly published pre-written obituary in August, it seemed obvious, not only to me but to everyone I talked to. We all agreed that some bogus report would surface to damage the stock value. It had already happened several times, ostensibly by mistake or simply sensationalist fever in the press. So we knew something like this would happen.

And what we have here is failure to anticipate.

When innovation disrupts something as important as journalism, many of us pay attention (whether we agree or not) with critics who point out the flaws of this innovation. We anticipate some of the dangers, and we act responsibly.

But many don’t. Last week’s stupidity by a professional blogger, as well as CNN, was matched only by the gullibility of traders who acted on the rumor. It’s a problem that many people confine themselves to organizations like Fox News and CNN, or even to mainstream bloggers, for accurate and true reporting. It’s related to the problem that hair-trigger, speculative factors can cause massive stock trades. People don’t anticipate dangers because the press and bloggers are too busy (chasing ambulances in this case) to write thoughtful pieces about the true value of Apple, with or without Steve Jobs.

And here’s my disclaimer: I not only own a pitiful amount of Apple stock, but my two sons are using the proceeds of Apple stock sales last year to go to college. (Way to go, Tony.) And I’m not selling, at least not yet.

I’m pissed at these irresponsible sensation-chasers, and in particular Silicon Alley Insider, a professional news blogger, for suggesting that CNN’s ownership of iReport gave credibility to the false story. Without doing a fact-check, this extremely popular blogger (with his own insider ties) fanned the flames of what is either a prank or worse, a crime. The SEC is investigating, because if the purpose of the person who started the rumor was to benefit financially from a fall in the stock price, then it is a criminal act. You think stock manipulation of this kind doesn’t happen often? Think again.

My problem with this mess is not just the blogger who fanned it, but CNN, the organization that nurtured the flame in the first place with its iReport site. In my mind there is nothing innovative about “citizen journalism” as practiced at iReport. One could argue that CNN has found a way to post breaking news without having to send out reporters and TV crews, saving money at the expense of professional journalists and reporters.

Worse, I think it’s a misuse of citizen feedback. What are posted as “news” items on this site should simply be unverified (or even unverifiable) comments to real news stories and articles. Editors should consider their readers capable of anything, and should insulate the rest of us from the maniacs by consolidating maniacal reports in the comments section. That way readers would not confuse this stuff with news. Readers are a lot less interested in getting the story first as they are in getting an accurate report.