I don't know about you, but I'm ordering Michael Lewis' new book "Flash Boys: A Wall Street Revolt" - and I'm ordering it today.
Of course, Michael Lewis is the author of two of the biggest-selling books ever written about Wall Street: "Liar's Poker" (1990), an autobiographical portrait of excessively greedy bond traders during the 1980s, and "The Big Short: Inside the Doomsday Machine" (2010), which chronicles the housing bubble that led to the Great Recession in 2007.
While those earlier books captured how Wall Street excesses can lead to devastating losses for individual investors, Lewis' newest work aims to prove something even more damning - that the U.S. Stock Market, "the most iconic market in global capitalism, is rigged."
I'm looking forward to reading it.
And it looks like the FBI will be ordering a few copies, too.
Specifically, Michael Lewis' book is about high-frequency trading (HFT), a technology that allows certain firms to make billions in profits simply by "beating" investors to the exchanges.
The profits were so big that one firm, according to Lewis, spent $300 million building high-speed fiber optic cables between New Jersey and Chicago just to shave 3 milliseconds off the time the trades could be executed.
If you didn't catch the 60 Minutes interview with Michael Lewis Sunday, you can watch it here.
And late yesterday, the Federal Bureau of Investigation announced it would be investigating some of these financial-market "bad actors."
Of course, let it be known that I've been ranting about high-frequency trading since long before the "flash crash" in 2010.
In April 2010, in Money Morning, I wrote:
"The massive proliferation of exchange-traded funds (ETFs) that have become so popular with retail investors is also a major cause of the misleading stock-market volume statistics. And not because they are traded by investors, but because they are traded by a handful of privileged 'INSIDERS'."
I said it then, and I'll say it again: High-frequency trading is a total rip-off - and it does nothing for markets, unless you consider how it actually makes markets thinner, not more liquid.
And you want to know what's the most damning thing about it?
It's all legal. That's right - totally legal.
I believe it should be outlawed.
Period.
Regulators, namely the pimps and panderers at the Securities and Exchange Commission, and the various stock exchanges, all of them, are in on the game.
The game, known as HFT, isn't arbitrage. It isn't fair. And it isn't consistent with the keeping of "fair and orderly markets."
And that means it should be illegal.
Back in October 2012 I wrote an article here in Wall Street Insights & Indictments called Why High Frequency Trading Is A Scam.
In that article, I wanted to show you how you too can get rich gaming the system. All you had to do is follow the eight rules I laid out for you. It wasn't even a 12-step program. Just eight simple steps.
Well, since that time, nothing has changed. Not one iota.
So, let me share those rules with you once again:
Like I said, I've already ordered "The Flash Boys."
I'll read it and review it for you as soon as I'm done with it...
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