I just finished reading Michael Lewis’ latest book – Flash Boys. I think whatever respect I held for Wall Street has been crushed.
I am sure that there are good people, just like there are bad people. But it feels like the good people are so out weighed by the bad people that the overall perception is that everyone on Wall Street is bad.
Lewis does a good job at explaining what High Frequency Trading (HFT) is – at least I can follow what he was explaining – and how a greedy group of folks are raking in BILLIONS (yes with a B) of dollars by doing nothing but manipulating the markets.
Brad Katsuyama feels something is off and starts poking around and discovers things about Wall Street that I am sure only a very few know – how it works. And he discovers how the High-Frequency Traders are using speed and technology to manipulate the price of stock and make money off of the cents – or fraction of cents. But in enough volume, even the pennys add up
So he sets out to open his own Exchange (where stocks are traded) that levels the playing field. As he explains what is going to the folks that do the investing he opens many eyes, pisses off a lot of folks, and picks up some backers on the way.
But he is fighting a way of business that has been institutionalized on the Street and folks are hesitant to rock the boat.
But he gets IEX off the ground (they went live just Oct 2013 – less than a year ago) and seems to be slowly making a difference.
Here is to honesty and fairness.