January 8, 2014
Book Short: Faster Than The Blink of an Eye
Michael Lewis is one of those authors for whom my general point of view is “read whatever he writes.” Flash Boys: A Wall Street Revolt was no exception. It’s a book about the high-frequency trading business, how a difference in microseconds can make a difference, and how the complexity of trading has led to enough confusion that virtually no one on Wall Street actually understands how it works any more.
I am a capitalist through and through, and I never begrudge Wall Street for making money, even though I do have moments where I doubt the amount of value that finance creates relative to the amount of income they swallow up. However, that all goes out the window when there is evidence that some pocket of Wall Street isn’t playing by the rules. I define “the rules” as either the law, or as something more like “a basic sense of morality and fairness.”
Some of what has been going on in the high-frequency trading business, as Lewis describes in this book, may or may not be legal (let’s assume it is), but is almost certainly not following a basic sense of morality and fairness. It’s worth noting that I am purely going off what Lewis wrote in the book, so to the extent that his research is incomplete or his writing is misleading, I am happy to retract that statement. But based on what I read, I’d challenge some of the people in the HFT business to defend what they’re doing publicly, to their mothers or to their own clients. That’s the ultimate test of morality or fairness.
It’s amazing to me that this topic hasn’t gotten more play in the media or with regulators. Maybe it’s just too complicated for anyone to understand or to articulate. In any event, even though not strictly a business book, it’s fascinating and worth a read, as I think all Michael Lewis books are.