Michael Lewis on HFT

Apr 11, 2014 by

high frequency tradersMichael Lewis is the author of “Flash Boys: A Wall Street Revolt”, on the topic of high-frequency trading, or HFT. Though high-frequency traders have been stealing money from investors for years, thanks to Lewis’ book and last Sunday’s 60 Minutes segment on HFT, the people who are supposed to keep Wall Street from screwing you are at least pretending now to be paying attention. Congress and the SEC will probably take a typically feeble but highly self-congratulatory stab at controlling HFT, declare victory, and go home. Meanwhile, like operators of a crooked casino, Wall Street’s geniuses will simply move on to yet another new way to line their pockets at the expense of small investors like you and me.

Michael Lewis on Bloomberg

If you don’t have time to read Lewis’ book, this interview on Bloomberg will give you a good idea of what all the fuss is about. I love the casino analogy—couldn’t be more apt.

What Are Your Thoughts on HFT?

Have you been keeping up with the high-frequency trading issue? I suspect many are not. The genius of HFT I think is that instead of stealing (and I’m making up these numbers to make a point) $1 million from 1,000 people high-frequency traders came up with a way to steal $.10 from a 10 billion people. Either way, the scam amounts to $1 billion stolen. But with the way they’re doing it—a little bit from a lot of people—nobody cares.

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