Bari Weiss of The Wall Street Journal reports on newly released book titles and the world of publishing in "The Book Reader."
If you enjoyed reading "Liar's Poker," "Moneyball," "The Blind Side" or "The Big Short," good news: Michael Lewis has a new book.
Out this week, it's called "Flash Boys: A Wall Street Revolt." And whether you're a twentysomething with a new Schwab account or a highly sophisticated trader, the story Mr. Lewis tells in "Flash Boys" is one that you'll want to know about.
The stock market that most of us think of — screaming alpha males wearing bright jackets on the floor of the New York Stock Exchange — is dead, explains Mr. Lewis, as is the old way of buying and selling stocks. Those people have been replaced by advanced computers that are capable of making trades in a fraction of the time.
"The U.S. stock market now trades inside black boxes, in heavily guarded buildings in New Jersey and Chicago," Mr. Lewis writes. "The world clings to its old mental picture of the stock market because it's comforting; because it's so hard to draw a picture of what has replaced it; and because the few people able to draw it for you have no interest in doing so. This book is an attempt to draw that picture."
Mr. Lewis has a gift for making highly complicated issues accessible, and this book is no exception.
The picture he paints is clear, and shocking for the average reader. According to Lewis, high-frequency traders have gamed the new, computerized stock market by exploiting a technological arsenal of servers and fiber-optic cable, plus simple geography, to trade milliseconds ahead of everyone else. Those milliseconds translate into tens of billions of dollars.
The heroes of "Flash Boys" are an unlikely ones—Brad Katsuyama and Ronan Ryan, former traders at the Royal Bank of Canada. Together with some others, they figure out the way high-frequency traders are, as Mr. Lewis puts it, "legally front-running" and eventually decide to start their own exchange, called IEX, to combat such practices.
Is the stock market rigged, as Mr. Lewis alleges? You’ll have to pick up the book and follow the debate that it's already set off.