Michael Lewis, author of Moneyball and The Blind Side has released his latest book, Flash Boys. It is a story about how Wall Street is rigged and people are making tons of money offering little to no value to clients while the lower crust of the investment world is paying the price. The reason the story bears this title is because high frequency traders (HFTs) were supposedly taking advantage of how quickly trades can arrive based on technology and location. To explain, the idea is that if someone in Canada is placing a trade with the NYSE, a person on Wall Street can see the interest, and then buy and sell for an immediate profit.
Lewis can be rather convincing because while he not only tells people what they want to hear – that the system is rigged by the rich and powerful elite – but also because he had a brief tenure as a bond broker at Saloman Brothers in his 20’s, giving him the vocabulary to get on the same level as those who don’t quite understand the more basic financial concepts. Like many of his books, Flash Boys has been optioned for a movie, leaving some to wonder if the big PR run is a lead-up to the film, a decent marketing budget for the book, or a combination of both. Like many great novels, it is based in a background of certain facts, but like many bad novels, he’s pushing it as pure non-fiction.