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.
Can the FBI Stop the High-Frequency Trading Charade?
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?
About the Author
Shah Gilani boasts a financial pedigree unlike any other. He ran his first hedge fund in 1982 from his seat on the floor of the Chicago Board of Options Exchange. When options on the Standard & Poor's 100 began trading on March 11, 1983, Shah worked in "the pit" as a market maker.
He helped develop what has become known as the Volatility Index (VIX) - to this day one of the most widely used indicators worldwide. After leaving Chicago to run the futures and options division of the British banking giant Lloyd's TSB, Shah moved up to Roosevelt & Cross Inc., an old-line New York boutique firm. There he originated and ran a packaged fixed-income trading desk, and established that company's "listed" and OTC trading desks.
Shah founded a second hedge fund in 1999, which he ran until 2003.
Shah's vast network of contacts includes the biggest players on Wall Street and in international finance. These contacts give him the real story - when others only get what the investment banks want them to see.
Today, as editor of 10X Trader, Shah presents his legion of subscribers with the chance to earn ten times their money on trade after trade.
Shah is also the proud founding editor of The Money Zone, where after eight years of development and 11 years of backtesting he has found the edge over stocks, giving his members the opportunity to rake in potential double, triple, or even quadruple-digit profits weekly with just a few quick steps.
Shah is a frequent guest on CNBC, Forbes, and Marketwatch, and you can catch him every week on Fox Business's "Varney & Co."
He also writes our most talked-about publication, Wall Street Insights & Indictments, where he reveals how Wall Street's high-stakes game is really played.