A must read: Michael Lewis's book about High Frequency Trading

[dixiegrrrrl]

4 pages in, I can't put it down.
t is a stunning page turner.
The thing I like about Lewis is he writes about complex topics in plain english , and is very engaging. Sort of like Matt Taibbi.

Find out why THIS book is causing heads to explode on Wall Street and has led to the recent announced HFT investigations.

My reaction to the first chapter has been
" I had no earthly idea this even happened"
and I thought I was pretty cognizant of the issue.

Really really worth the read, and a keeper for my shelf.

[lostincalifornia]

1. The day after his 60 minute interview Bloomberg had him on their morning show with host Stepahnie

Rue and her co-host.

There were quite belittling and flippant, almost like accusing him of making things up. At the same they had a trader who makes a living with high frequency trading, and a person from IPX whose company insures that individual investors do not get skimmed by the high frequency trading.

Lewis was terrific, and the representative from IPX who knew his stuff verified everything Lewis was saying. It was like 3 against two. The interviewers from Bloomberg were not objective at all.

Lewis was on several other shows on Bloomberg where the hosts were at least professional, and he wasn't treated like he was on the witness stand.

There is absolutely no justification for HFT, except to enrich a few specialized firms at the expense of everyone else.

Yes, there is a reason Wall Street is defensive, and they should be by creating an environment where they have an unfair advantage over everyone else. They are NOT honest brokers, and that hurts the credibility of the whole system.

Another reason why they NEVER should be given any access to Social Security funds like the republicans have been trying to do for some time.

[longship]

2. It goes to the top of my must read list.

I have his previous Wall Street book, The Big Short which, as the subtitle indicates, gives one a peek within the Wall Street doomsday machine. Michael Lewis grasps the nettle of explaining in plain language the concept of the world of credit default swaps (CDS) and collateralized debt obligations (CDO). He does this by weaving a narrative around some fairly amazing characters who foresaw the collapse and bet on it. It is a compelling read. And you'll understand CDSs and CDOs when you are done. You'll also learn to absolutely despise the Wall Street bankers.

Lewis is a very good author.

R&K

[7962]

3. Does "The Big Short" refer to stock shorting? Because THATS where the real fraud is, IMO.

All the talk Ive heard on the HFT stuff is about how they skim a penny ere and there at our, the average guys, expense. But what I have seen happen is actual price manipulation by short sellers. I've never understood why shorting is allowed anyway. Why should I be able to sell a stock I have to borrow? If you think a stock price is overvalued and prime for a drop, then buy put options. That will tell the market what you think just like shorting. I've seen instances where short sellers will pressure stock prices without even having to actually sell; using the bid/ask to depress the price. They'll do it prior to a news release in order to make people think the news is going to be bad. Then good news is released and they actually sell into the news, which gives the impression that the news wasnt good ENOUGH. I think all short sellers should be beaten.

[longship]

4. Yes, but read on.

It's about the different guys who independently shorted the mortgage securities market because they saw the collapse coming. Yup, they made a fortune on it, but their story is a very good one and Lewis' narrative is very readable.

The principle character is Steve Eisman, a fund manager with next to no social skills and a tendency to speak the truth no matter what. One ends up really liking the guy by the end of the book. One can't help it.

But, yup. This is about shorting markets, which has pretty much been happening since time immemorial.

BTW, it is a really good read.

[eppur_se_muova]

5. +1 for a very readable and enlightening book. nt

[Crewleader]

6. Thanks dixiegrrrl

Wall Street Rigged

[dixiegrrrrl]

7. Yes....indeed.

Of course the bid rigging and other games have been known to a lot of people all along.
I guess Lewis' book was the final straw.
now the regulators are SHOCKED..just shocked, I tell you! to find this problem
and I am sure the fines will be eventually directed at the crooks most likely to afford it, and maybe a sacrifical head or two will roll.
And then it will be onto the next game of "chance".

Truth and justice are rare things in this land of ours, anymore.

[unhappycamper]

8. It's in my 'to read' pile.

I picked it up in COSTCO last week.