Flash Boys’ Michael Lewis Warns “The Problem’s Not Just HFT, The Problem Is The Entire System”

–  Flash Boys’ Michael Lewis Warns “The Problem’s Not Just HFT, The Problem Is The Entire System” (ZeroHedge, March 13, 2015): 

As HFT shops begin to turn on each other, it seems appropriate to reflect on the impact that Michael Lewis’ Flash Boys book had on exposing the ugly truth that many have been discussing for years in US (and international) equity (and non-equity) markets. As Lewis concludes, after explaining the attacks he has suffered from the HFT industry, “If I didn’t do more to distinguish ‘good’ H.F.T. from ‘bad’ H.F.T., it was because I saw, early on, that there was no practical way for me or anyone else… to do it. …  The big banks and the exchanges [have] been paid to compromise investors’ interests while pretending to guard those interests. I was surprised more people weren’t angry with them.”

1 thought on “Flash Boys’ Michael Lewis Warns “The Problem’s Not Just HFT, The Problem Is The Entire System”

  1. FINALLY!!!!
    Somebody is addressing this house of cards…………..but it is even more fragile than cards…….it is a disaster waiting to happen. THANK YOU!!
    In 1929, the US stock market collapsed because 90% of the numbers being traded were only numbers with nothing behind them. An investor could open a brokerage account with $100.00, and could buy $190.00 worth of stock on margin.
    After the crash, the US leaders set in strong regulations that made US markets #1 in the world for the next 70 years. Bonds were considered as good as cash, and a margin account investor could borrow 90% on bonds, 50% on stock.

    Our currency was backed with gold until 1972, when the worst president we ever had, Richard Nixon, took us off the gold standard. He said out technology and MFG was strong enough to back our currency.

    After 1972, the bleeding of jobs began on a smaller scale until Clinton’s cursed NAFTA and his signing away all regulations in our markets. After that, the bleeding began. Junk bonds had grown to a larger scale, and bonds were no longer cash but were treated as such……..That opened the door to what we now face…disaster.

    HFTs are a thousand times worse. A few greedy guts can buy and sell massive amounts of stock in less time than one blinks an eye. Individual investors don’t have a prayer against such odds, and the capacity for abuse is obvious……and it happens every day. The so-called Flash Crash was one of many…..it allows HFT players an open field of outright stealing. What was done about it? Nothing.

    Our markets have lost all credibility. China’s and Russia will soon have their own FED, they already have a stock market, and all the money is going east……..nobody wants to invest in a pirates den……and that is what the US markets are becoming.

    A friend of mine told me all the US news outlets are broadcasting Russia’s economy is in trouble. That is wishful thinking. Russia’s FED is doing what our FED did when we hit inflation, raising interest rates, as we experienced in the early 1980s. It worked, and rates came down. Russia’s debt to GDP is in low 30% , the US hit 100% a few months ago. That means Russia has an operating capital in the 70% range, the US has zero………all US expenditures are borrowed.

    Now, I have read that CEOs of major corporations like Apple Computer are borrowing money to buy back their corporate stock. What kind of laws allows such poor stewardship?

    Who is better off?

    We have a market teetering on a steep cliff, and the only thing holding it up are false numbers and empty pension funds. HFTs make it even more precarious. Only a few people and corporations benefit from what is left of the US economy and its markets.

    HFTs buy and SELL large amounts of securities in less time than one can blink an eye. The key is sell,, because they all take, they never give. At some point, there will be nothing left to take……….

    The US stockholders will be left holding a sack of paper……..

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