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Michael Lewis Reflects on His Book Flash Boys, a Year After It Shook Wall Street to Its Core
Michael Lewis Reflects on His Book Flash Boys, a Year After It Shook Wall Street to Its Core
When I sat down to write Flash Boys, in 2013, I didn’t intend to see just how angry I could make the richest people on Wall Street. I was far more interested in the characters and the situation in which they found themselves. Led by an obscure 35-year-old trader at the Royal Bank of Canada named Brad Katsuyama, they were all well-regarded professionals in the U.S. stock market. The situation was that they no longer understood that market. And their ignorance was forgivable. It would have been difficult to find anyone, circa 2009, able to give you an honest account of the inner workings of the American stock market—by then fully automated, spectacularly fragmented, and complicated beyond belief by possibly well-intentioned regulators and less well-intentioned insiders. That the American stock market had become a mystery struck me as interesting. How does that happen? And who benefits?
By the time I met my characters they’d already spent several years trying to answer those questions. In the end they figured out that the complexity, though it may have arisen innocently enough, served the interest of financial intermediaries rather than the investors and corporations the market is meant to serve. It had enabled a massive amount of predatory trading and had institutionalized a systemic and totally unnecessary unfairness in the market and, in the bargain, rendered it less stable and more prone to flash crashes and outages and other unhappy events. Having understood the problems, Katsuyama and his colleagues had set out not to exploit them but to repair them. That, too, I thought was interesting: some people on Wall Street wanted to fix something, even if it meant less money for Wall Street, and for them personally.
…click on the above link to read the rest of the article…
US Taxpayers Pay For SEC to Arrange Early Release of Data to High Speed Trading Firms
US Taxpayers Pay For SEC to Arrange Early Release of Data to High Speed Trading Firms.
The SEC reportedly does not like trading on information that is not yet public. Just ask SAC Capital, or if you prefer, watch the plethora of insider trading SEC news conferences in general.
Why, even this morning there is a WSJ story about the SEC’s investigation into the early leak and release of Medicare cancer related funding data , which is an investigation into a different government agency!
And remember last year, when the SEC began investigating Thompson Reuter’s early release of ISM data to certain high speed subscribers. While the SEC brought no charges against Thompson Reuters, the data firm did subsequently suspend its “tiered release” practice:
On Monday, Thomson Reuters announced that it was suspending a so-called “tiered release” of market moving data to elite clients. The data and news service had been selling the University of Michigan’s consumer sentiment numbers to paying clients at 9:54:58 on release days—two seconds before the information went to a broader set of clients at 9:55 am. That created an opportunity for high speed trading firms to rake in profits before the rest of the market knew which direction the impending news would propel trading.
– See more at: http://blog.themistrading.com/us-taxpayers-pay-for-sec-to-arrange-early-release-of-data-to-high-speed-trading-firms/#sthash.Q5Ovnhx5.dpuf
