Disclaimer: I still haven’t read Michael Lewis’ new book – Flash Boys. That said, I went to hear him talk about the book, and about high-frequency trading, at the LSE a few weeks ago. The public events team storified the tweets during the talk here – which is worth a read. The main takeaway for me was that the SEC can’t solve the problem (of market failures in general) because the regulator is part of the problem. The easy path beaten by retired regulators to Wall St’s door should be worrying for everyone – one former attorney at the SEC said something similar in his retirement speech earlier this year. Nevertheless Mr Lewis is optimistic, and continues to believe in free-market solutions that can fix problems.
I also found it hilarious when Mr Lewis talked about having written Liars’ Poker as a cautionary tale to urge young graduates to eschew finance. At my business school, we were urged to read it as part-inspiration/part-training manual, before we applied for Wall St jobs. Talk about unintended consequences!