DOCSLIB.ORG

Flash Boys” Effect: an Analysis of High-Frequency Trading in the Online Media

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
Flash Boys” Effect: an Analysis of High-Frequency Trading in the Online Media The “Flash Boys” Effect: An analysis of high-frequency trading in the online media © 2014 MediaMiser Ltd. © MediaMiser 2014 High-Frequency Trading 1 ExecutiveTable of SummaryContents Introduc6on/Methodology 3 Execu6ve Summary 4 Overall Coverage 5 Flash Boys 9 Darkpools 10 Inves6gaons 11 About Us 12 © 2014 MediaMiser Ltd. © MediaMiser 2014 High-Frequency Trading 2 Introduction/ ExecutiveMethodology Summary What’s this report about? The goal of this report is twofold – to show the impact of the Michael Lewis book Flash Boys on media discussions surrounding high-frequency trading, and to illustrate the nature of that coverage through analysis of top organizaons, top issues/events, and the top outlets and journalists found within coverage. What exactly is high-frequency trading? Good ques6on. Investopedia says high-frequency trading is a “trading plaorm that uses powerful computers to transact a large number of orders at very fast speeds. High-frequency trading uses complex algorithms to analyze mul6ple markets and execute orders based on market condi6ons. Typically, the traders with the fastest execu6on speeds will be more profitable than traders with slower execu6on speeds.” Lewis’s angle to his book – that high-frequency trading is essen6ally a negave prac6ce allowing traders to “rig” the market – was a constant theme in media coverage. What media coverage did you use? The report was limited to men6ons of high-frequency trading in online news stories from major English daily newspaper sites in North America, major financial news websites and newswires, and major general news sites. Coverage was monitored using the keyword “high frequency trading.” When exactly did you look at coverage? Coverage was analyzed during the first half of 2014: January 1 to June 30, 2014, inclusive. © 2014 MediaMiser Ltd. © MediaMiser 2014 High-Frequency Trading 3 Executive Summary • Following the ini6al spike created by the book launch, men6ons of high-frequency trading in the media per week were sustained into May and June as markets and organizaons reacted. • The“Flash Boys effect” on media coverage of HFT was so great that menHons of the pracHce jumped 440 per cent in total in the three months following its release. • The book was the most-covered issue or event during the study period, and was discussed more than 350-per-cent more than June’s Senate hearings into HFT. • Goldman Sachs was the most-men6oned investment bank in coverage, and had the highest SOV of any investment bank in every month but January and June. It was followed by Barclays, which received most of its coverage in June when a lawsuit against it related to its HFT operaons was brought by the New York Acorney- General. • HFT firm Virtu made headlines in early April aer delaying its long-awaited Ini6al Public Offering just days following the book’s release, leading many to speculate that the book influenced the firm’s decision to delay. • Bloomberg’s Sam Mamudi was the top journalist to men6on high-frequency trading in his coverage. His stories were typically published on Bloomberg.com and on BusinessWeek’s website, along with the Washington Post. • Bloomberg was the top online outlet to run stories men6oning high-frequency trading, closely followed by CNBC and BusinessWeek. The Wall Street Journal was next, followed by Reuters. • Dark pools/markets, which are unregulated markets controlled by individual investment banks, had the second-highest share of voice, with men6ons especially picking up in June in conjunc6on with the Barclays lawsuit. • There was virtually no coverage of dark pools/markets before the book’s release, but men6ons shot up 412 per cent between the middle and end of March. © 2014 MediaMiser Ltd. © MediaMiser 2014 High-Frequency Trading 4 ExecutiveOverall CoverageSummary Total Articles: 2,414 Total Circulation: 5,189,474,170 Online arcles menoning “high frequency trading” Barclays hit with 800 Release of 740 Michael Lewis’s lawsuit from NY Attorney 700 “Flash Boys” General 600 500 Senate hearings on high- 400 frequency 339 ArHcles 305 trading 300 258 172 170 200 76 68 80 100 30 0 Jan 02 - Jan 20 - Feb 07 - Feb 25 - Mar 15 - Apr 02 - Apr 20 - May 08 - May 26 - Jun 13 - Jan 19 Feb 06 Feb 24 Mar 14 Apr 01 Apr 19 May 07 May 25 Jun 12 Jun 30 Share of voice – Major discount brokerages • Following the ini6al spike created by the book launch, men6ons of high-frequency trading in the 2% media per week were sustained into May and June as markets and organizaons reacted. 3% 4% • The“Flash Boys effect” on media coverage of HFT 34% was so great that men6ons of HFT jumped 440 15% per cent in the three months following its release. • Men6ons of HFT took off again in late June, aer the New York Acorney General slapped a lawsuit on UK-based Barclays for what he said was unfair prac6ces surrounding its HFT techniques. 16% • The share of voice of major discount brokerages was led by Charles Schwab, followed by TD 26% Ameritrade and E*Trade. • Charles Schwab was men6oned most oden because of statements made by Charles Schwab himself, the chairman of the firm, who called HFT Charles Schwab TD Ameritrade E*Trade a “growing cancer that needs to be addressed.” Fidelity Scocrade Interac6ve Brokers Lightspeed © 2014 MediaMiser Ltd. © MediaMiser 2014 High-Frequency Trading 5 Overall • The launch of Michael Lewis’s ‘Flash Boys’ Coverage Share of voice – Notable issues/events was the most-covered issue or event during the study period, and was discussed more than 350-per-cent more than June’s Senate hearings into HFT. 2% 3% Flash Boys • Dark pools/markets, which are 3% 3% unregulated markets controlled by 31% Dark pools/markets individual investment banks, had the 6% Schneiderman inves6gaon second-highest share of voice, with FBI inves6gaon men6ons especially picking up in June in 8% conjunc6on with the Barclays lawsuit. Flash crash of 2010 Barclays lawsuit • The various ongoing inves6gaons into 9% HFT by the NY Acorney General, the FBI, Holder/DOJ inves6gaon and the Department of Jus6ce received Senate hearing prominent coverage. 14% 21% "Maker-taker" trading • The “Flash Crash” of 2010 was oden Rhode Island lawsuit referenced as an example of negave consequences of automated trading. • The “Maker-taker” trading model was also referenced especially aer NYSE President Thomas Farley said it should be banned during June’s Senate hearings. “A huge number of the (HFT) ouTits he dealt with… no one had ever heard of, and the firms obviously intended to keep it this way.” - Excerpt from Flash Boys Share of voice – HFT firms • 1% While HFT firms aren’t oden men6oned in the media, companies men6oned in 3% Flash Boys such as Getco, Citadel, Hudson 4% Virtu River Trading and Spread Networks were 11% Knight Capital singled out in HFT coverage. 38% Getco • HFT firm Virtu made headlines in early Citadel April aer delaying its long-awaited Ini6al 13% Tradebot Public Offering just days following the book’s release (“Virtu to indefinitely Hudson River Trading postpone IPO: report” in Atlanta Journal- Spread Networks Cons>tu>on (online), April 18), leading 14% many to speculate that the book DRW 16% influenced the firm’s decision to delay. © 2014 MediaMiser Ltd. © MediaMiser 2014 High-Frequency Trading 6 Overall Coverage Share of voice – Investment Banks • Goldman Sachs was the most- men6oned investment bank in 2% 2% coverage, and had the highest SOV Goldman Sachs of any investment bank in every month but January and June. It was 5% Barclays followed by Barclays, which received 5% 22% Credit Suisse most of its coverage in June when a 5% JPMorgan lawsuit against it related to its HFT operaons was brought by the New Cigroup York Acorney-General. 6% Morgan Stanley • Most investment banks referenced UBS 7% in coverage were US-based, but also Deutche Bank 19% from Switzerland (Credit Suisse, UBS), England (Barclays), Germany RBC 7% (Deutche Bank), France (BNP Bank of America Paribas) and Canada (RBC). 10% 10% BNP Paribas • The large majority of men6ons of all Merrill Lynch investment banks relang to HFT were negave. Share of voice – Investment Banks over Hme 0 0 2 6 4 2 0 3 12 2 5 19 3 9 33 8 17 5 8 10 11 6 12 30 2 1 26 14 14 33 0 15 26 14 11 18 5 14 41 19 5 18 5 56 19 6 7 34 75 Share of voice – Discount brokerages 10 18 8 56 8 7 11 29 15 6 26 192 16 63 53 10 123 9 40 Jan Feb Mar Apr May Jun Goldman Sachs Barclays Credit Suisse JPMorgan Cigroup Morgan Stanley UBS Deutche Bank RBC Bank of America BNP Paribas Merrill Lynch • The propor6on of men6ons of Goldman Sachs was highest in every month except January and June, when news broke that the New York Acorney-General was launching a lawsuit against Barclays for what he said are “unfair prac6ces associated with its high-frequency trading techniques” and dark pool fraud. © 2014 MediaMiser Ltd. © MediaMiser 2014 High-Frequency Trading 7 Overall Coverage Top journalists • Bloomberg’s Sam Mamudi was the top journalist to men6on high- frequency trading in his coverage. His stories were typically published Bob Pisani - CNBC 19 on Bloomberg.com and on Kevin Dugan - New York Post 19 BusinessWeek’s website, along with the Washington Post. Sarah Lynch - Reuters 20 • Mr. Mamudi was followed by John Carla Main - Bloomberg 30 McCrank and Karen Freifeld, both of Reuters. Bradley Hope - WSJ 33 Scoc Paerson - WSJ 36 • Mr. McCrank’s high numbers were due to several syndicated stories Ma Levine - Bloomberg 39 that appeared in publicaons such as the Chicago Tribune and South Karen Freifeld - Reuters 49 Florida Sun-Sennel, such as “IEX John McCrank - Reuters 63 eyes stock exchange status as firms come knocking” (April 5) and “New Sam Mamudi - Bloomberg 105 York aorney general accuses Barclays of ‘dark pool’ fraud” 0 20 40 60 80 100 120 (June 26).
Load more

Recommended publications
  • Brian Mccrea Brmccrea@Ufl
    IDH 2930 Section 1D18 HNR Read Moneyball Tuesday 3 (9:35-10:25 a. m.) Little Hall 0117 Brian McCrea brmccrea@ufl. edu (352) 478-9687 Moneyball includes twelve chapters, an epilogue, and a (for me) important postscript. We will read and discuss one chapter a week, then finish with a week devoted to the epilogue and to the postscript. At our first meeting we will introduce ourselves to each other and figure out who amongst us are baseball fans, who not. (One need not have an interest in baseball to enjoy Lewis or to enjoy Moneyball; indeed, the course benefits greatly from disinterested business and math majors.) I will ask you to write informally every class session about the reading. I will not grade your responses, but I will keep a word count. At the end of the semester, we will have an Awards Ceremony for our most prolific writers. While this is not a prerequisite, I hope that everyone has looked at Moneyball the movie (starring Brad Pitt as Billy Beane) before we begin to work with the book. Moneyball first was published—to great acclaim—in 2003. So the book is fifteen-year’s old, and the “new” method of evaluating baseball players pioneered by Billy Beane has been widely adopted. Beane’s Oakland A’s no longer are as successful as they were in the early 2000s. What Lewis refers to as “sabremetrics”—the statistical analysis of baseball performance—has expanded greatly. Baseball now has statistics totally different from those in place as Lewis wrote: WAR (Wins against replacement), WHIP (Walks and hits per inning pitched) among them.
    [Show full text]
  • Execution Venues List
    Execution Venues List This list should be read in conjunction with the Best Execution policy for Credit Suisse AG (excluding branches and subsidiaries), Credit Suisse (Switzerland) Ltd, Credit Suisse (Luxembourg) S.A, Credit Suisse (Luxembourg) S.A. Zweigniederlassung Österreichand, Neue Aargauer Bank AG published at www.credit-suisse.com/MiFID and https://www.credit-suisse.com/lu/en/private-banking/best-execution.html The Execution Venues1) shown enable the in scope legal entities to obtain on a consistent basis the best possible result for the execution of client orders. Accordingly, where the in scope legal entities may place significant reliance on these Execution Venues. Equity Cash & Exchange Traded Funds Country/Liquidity Pool Execution Venue1) Name MIC Code2) Regulated Markets & 3rd party exchanges Europe Austria Wiener Börse – Official Market WBAH Austria Wiener Börse – Securities Exchange XVIE Austria Wiener Börse XWBO Austria Wiener Börse Dritter Markt WBDM Belgium Euronext Brussels XBRU Belgium Euronext Growth Brussels ALXB Czech Republic Prague Stock Exchange XPRA Cyprus Cyprus Stock Exchange XCYS Denmark NASDAQ Copenhagen XCSE Estonia NASDAQ Tallinn XTAL Finland NASDAQ Helsinki XHEL France EURONEXT Paris XPAR France EURONEXT Growth Paris ALXP Germany Börse Berlin XBER Germany Börse Berlin – Equiduct Trading XEQT Germany Deutsche Börse XFRA Germany Börse Frankfurt Warrants XSCO Germany Börse Hamburg XHAM Germany Börse Düsseldorf XDUS Germany Börse München XMUN Germany Börse Stuttgart XSTU Germany Hannover Stock Exchange XHAN
    [Show full text]
  • Slowing Down High-Speed Trading: Why the SEC Should Allow a New Exchange a Chance to Compete*
    Slowing Down High-Speed Trading: Why the SEC Should Allow a New Exchange a Chance to Compete* Julie St. John† I. OVERVIEW ........................................................................................ 207 II. BACKGROUND .................................................................................. 210 A. Issues with High-Speed Trading ...................................... 210 B. How the IEX Delay Technology Combats High- Frequency Trading ............................................................ 211 III. THE CONTROVERSY .......................................................................... 214 A. Regulation National Market System ................................ 214 B. Fairness in the Market ...................................................... 217 IV. WHAT THE SEC SHOULD DO ........................................................... 218 V. CONCLUSION .................................................................................... 220 APPENDIX .................................................................................................. 221 I. OVERVIEW Investors’ Exchange (IEX) is to public stock exchanges what Uber and Lyft are to traditional taxi companies, and what Airbnb is to hotel chains.1 The exchange uses technology called a magic shoebox—thirty- eight miles of fiber-optic cable coiled inside of a box.2 This magic * The SEC made its decision and approved IEX as a public exchange on June 17, 2016. Press Release, U.S. Sec. & Exch. Comm’n, SEC Approves IEX Proposal to Launch Nat’l Exch., Issues Interpretation
    [Show full text]
  • Is the Stock Market Rigged? You May Have Heard About the 60 Minutes
    Is the Stock Market Rigged? You may have heard about the 60 Minutes interview with author Michael Lewis, a former Wall Street broker, author of "Liar's Poker" and "The Big Short," who has just come out with a new book entitled "Flash Boys." Lewis is an eloquent and astute critic of Wall Street's creative and predatory practices, and in his new book (and in the 60 Minutes interview) he offers evidence that the stock market is "rigged" by a cabal of high-frequency traders, abetted by stock exchanges and Wall Street firms. While it is true that certain parties may gain quicker access than others, some believe, the price discovery process (by allowing high frequency trading) is improved and, therefore, makes the process better for all. Regardless, for anyone practicing long-term investing, high frequency trading activities are essentially irrelevant Lewis exposed an advantage that certain traders receive by building high-speed fiber optic cable feeds directly into exchange computers that match buyers and sellers. Some actually have their trading computers located in the same room as the New York Stock Exchange and Nasdaq servers. And some pay extra for access to more information on who wants to buy and sell. All of this is perfectly legal, but Lewis points out that it is also shady. Why should some buyers and sellers have millisecond advantages over others? The problem is that these firms are able to jump in ahead of you and me and buy stocks at lower intraday prices, and then, a few seconds later, sell to the highest bidder before you and I would even see that bid on our screen.
    [Show full text]
  • Download Flash Boys: Not So Fast: an Insiders Perspective on High
    FLASH BOYS: NOT SO FAST: AN INSIDERS PERSPECTIVE ON HIGH-FREQUENCY TRADING DOWNLOAD FREE BOOK Peter KovГЎДЌ | none | 10 Dec 2014 | Directissima Press | 9780692336908 | English | United States Flash Boys: Not So Fast: An Insider's Perspective on High-Frequency Trading Boomerang Travels in the New Flash Boys: Not So Fast: An Insiders Perspective on High-Frequency Trading World. They illuminate the forces that threaten our boys, teaching them to believe that "cool" equals macho strength and stoicism. Kindlon and Thompson set out to answer this basic, crucial question: What do boys need that they're not getting? Flash Boys. The Boys Book of Famous Rulers. Raising Cain. In The River They Flash Boys lacks a single insider's account, and it shows. They use their new podium to investigate exchanges and the firms that specialize in high-frequency trading, while bringing light to many other ways that people cheat the system. Statistics point to an alarming number of young boys at high risk for suicide, alcohol and drug abuse, violence and loneliness. The problem lay in the fact that this route was not straight, as was ideal for speed of communication, but made many twists and turns. It's the story of what it's like to declare war on some of the richest and most powerful people in the world. Peter Hoffmeister was a nervous child who ran away repeatedly and bit his fingernails until they bled. By the age of thirty, he had left behind London's "trading arcades," working instead out of his childhood home. They were unable to find any.
    [Show full text]
  • Book Title Author / Publisher Year
    Parker Career Management Collection BOOK TITLE AUTHOR / PUBLISHER YEAR 10 Insider Secrets to a Winning Job Search Todd Bermont 2004 100 Best Nonprofits To Work For Leslie Hamilton & Robert Tragert 2000 100 Greatest Ideas For Building the Business of Your Dreams Ken Langdon 2003 100 Top Internet Job Sites Kristina Ackley 2000 101 Great Answers to the Toughest Interview Questions Ron Fry 2000 175 High-Impact Cover Letters Richard H. Beatty 2002 175 High-Impact Cover Resumes Richard H. Beatty 2002 201 Best Questions to Ask on Your Interview John Kador 2002 25 Top Financial Firms Wetfeet 2004 9 Ways of Working Michael J. Goldberg 1999 A Blueprint For Success Joe Weller 2005 A Message from Garcia Charles Patrick Garcia 2003 A New Brand World Scot Bedbury with Stephen Fenichell 2002 A.T. Kearney Vault 2006 Accenture Vault 2006 Accenture Vault 2006 Accounting Vault 2006 Accounting Wetfeet 2006 Ace Your Case II: Fifteen More Consulting Cases WetFeet 2006 Ace Your Case IV: The Latest and Greatest WetFeet 2006 Ace Your Case VI: Mastering the Case WetFeet 2006 Ace your Case! Consulting Interviews WetFeet 2006 Ace Your Cases III: Practice Makes Perfect WetFeet 2006 Ace Your Interview! (2 copies) WetFeet 2004 Advertising Vault 2006 All About Hedge Funds Robert A. Jaeger 2003 All You Need to Know About the Movie and TV Business Gail Resnik and Scott Trost 1996 All You Need to Know About the Music Business Donald S. Passman 2003 American Management Systems Vault 2002 Ask the Headhunter Nick A. Corcodilos 1997 Asset Management & Retail Brokerage Wetfeet
    [Show full text]
  • Mark׳S Blog: “Michael Lewis״
    Mark’s Blog: “Michael Lewis” I’m a big fan of Michael Lewis’ books. Liar’s Poker. Money Ball. The Big Short. He’s part reporter, part financial analyst, part social scientist and a great story teller. I’ve just finished a book he published a couple of years ago titled The Undoing Project. It chronicles the lives and work of two Israeli-American psychologists, Daniel Kahneman and Amos Tversky. Kahneman won the Nobel Prize in Economics in 2002 based largely on work he did with Tversky years before. It’s worth noting that Tversky died in 1996 and the Nobel is not awarded posthumously, but he did win a MacArthur prize before passing away. The focus of much of their work was how we make decisions. Most of us view ourselves as relatively rational in that when we’re presented with the facts, we believe we can determine the right course of action to take based on the information we’re presented. Kahneman and Tversky’s research proved otherwise. Ultimately, we carry a bundle of biases that can distort our decision-making ability. Sometimes it is to avoid risk. Sometimes it is to affirm what we have already determined should be the desired outcome. Tversky said “People predict by making up stories.” Lewis said of Kahneman “To Danny the whole idea of proving that people weren’t rational felt a bit like proving that people didn’t have fur.” When asked if his and Tversky’s work fed into the new and growing field of artificial intelligence Kahneman remarked “We study natural stupidity instead of artificial intelligence.” Reading the stories of their relationship and their work I was struck by their ongoing lack of tact with each other and those they met.
    [Show full text]
  • Communication & Media Studies
    COMMUNICATION & MEDIA STUDIES BOOKS FOR COURSES 2011 PENGUIN GROUP (USA) Here is a great selection of Penguin Group (usa)’s Communications & Media Studies titles. Click on the 13-digit ISBN to get more information on each title. n Examination and personal copy forms are available at the back of the catalog. n For personal service, adoption assistance, and complimentary exam copies, sign up for our College Faculty Information Service at www.penguin.com/facinfo 2 COMMUNICaTION & MEDIa STUDIES 2011 CONTENTS Jane McGonigal Mass Communication ................... 3 f REality IS Broken Why Games Make Us Better and Media and Culture .............................4 How They Can Change the World Environment ......................................9 Drawing on positive psychology, cognitive sci- ence, and sociology, Reality Is Broken uncov- Decision-Making ............................... 11 ers how game designers have hit on core truths about what makes us happy and uti- lized these discoveries to astonishing effect in Technology & virtual environments. social media ...................................13 See page 4 Children & Technology ....................15 Journalism ..................................... 16 Food Studies ....................................18 Clay Shirky Government & f CognitivE Surplus Public affairs Reporting ................. 19 Creativity and Generosity Writing for the Media .....................22 in a Connected age Reveals how new technology is changing us from consumers to collaborators, unleashing Radio, TElEvision, a torrent
    [Show full text]
  • USCA Case #20-1424 Document #1894176 Filed: 04/12/2021 Page 1 of 42
    USCA Case #20-1424 Document #1894176 Filed: 04/12/2021 Page 1 of 42 [ORAL ARGUMENT NOT YET SCHEDULED] No. 20-1424 __________________________________________________________________ IN THE UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT __________________________________________________________________ Citadel Securities LLC, Petitioner, v. Securities and Exchange Commission, Respondent, Investors Exchange, LLC, Intervenor __________________________________________________________________ On Petition for Review of an Order of the Securities and Exchange Commission __________________________________________________________________ BRIEF AMICUS CURIAE, BY CONSENT, OF BETTER MARKETS, INC. IN SUPPORT OF RESPONDENT AND INTERVENOR Dennis M. Kelleher Stephen W. Hall Jason R. Grimes Better Markets, Inc. 1825 K Street, NW, Suite 1080 Washington, DC 20006 (202) 618-6464 [email protected] [email protected] [email protected] Counsel for Amicus Curiae USCA Case #20-1424 Document #1894176 Filed: 04/12/2021 Page 2 of 42 CORPORATE DISCLOSURE STATEMENT Pursuant to Rule 26.1 of the Federal Rules of Appellate Procedure and D.C. Circuit Rule 26.1, Better Markets, Inc. (“Better Markets”) states that it is a non- profit organization that advocates for the public interest in the financial markets; that it has no parent company; and that there is no publicly-held company that has any ownership interest in Better Markets. i USCA Case #20-1424 Document #1894176 Filed: 04/12/2021 Page 3 of 42 CERTIFICATE AS TO PARTIES, RULINGS, AND RELATED CASES I. PARTIES AND AMICI All parties to this case are listed in the Brief for Petitioner. Better Markets is not aware of any amici supporting Respondent other than those listed in the Brief for Respondent. Better Markets understands that Healthy Markets Association and XTX Markets LLC intend to file amicus briefs in support of Respondent Securities and Exchange Commission and Intervenor Investors Exchange, LLC.
    [Show full text]
  • The Big Short: Inside the Doomsday Machine
    The Big Short Inside the doomsday machine Also by Michael Lewis Home Game Liar's Poker The Money Culture Pacific Rift Losers The New New Thing Next Moneyball Coach The Blind Side EDITED BY MICHAEL LEWIS Panic The Big Short INSIDE THE DOOMSDAY MACHINE Michael Lewis W. W. NORTON & COMPANY NEW YORK LONDON Copyright (c) 2010 by Michael Lewis All rights reserved For information about permission to reproduce selections from this book, write to Permissions, W. W. Norton & Company, Inc., 500 Fifth Avenue, New York, NY 10110 ISBN: 978-0-393-07819-0 W. W. Norton & Company, Inc. 500 Fifth Avenue, New York, N.Y. 10110 www.wwnorton.com W. W. Norton & Company Ltd. Castle House, 75/76 Wells Street, London W1T 3QT For Michael Kinsley To whom I still owe an article The most difficult subjects can be explained to the most slow-witted man if he has not formed any idea of them already; but the simplest thing cannot be made clear to the most intelligent man if he is firmly persuaded that he knows already, without a shadow of doubt, what is laid before him.--Leo Tolstoy, 1897 Contents Prologue Poltergeist Chapter 1 A Secret Origin Story Chapter 2 In the Land of the Blind Chapter 3 "How Can a Guy Who Can't Speak English Lie?" Chapter 4 How to Harvest a Migrant Worker Chapter 5 Accidental Capitalists Chapter 6 Spider-Man at The Venetian Chapter 7 The Great Treasure Hunt Chapter 8 The Long Quiet Chapter 9 A Death of Interest Chapter 10 Two Men in a Boat Epilogue Everything Is Correlated Acknowledgments PROLOGUE Poltergeist The willingness of a Wall Street investment bank to pay me hundreds of thousands of dollars to dispense investment advice to grown-ups remains a mystery to me to this day.
    [Show full text]
  • Informational Inequality: How High Frequency Traders Use Premier Access to Information to Prey on Institutional Investors
    INFORMATIONAL INEQUALITY: HOW HIGH FREQUENCY TRADERS USE PREMIER ACCESS TO INFORMATION TO PREY ON INSTITUTIONAL INVESTORS † JACOB ADRIAN ABSTRACT In recent months, Wall Street has been whipped into a frenzy following the March 31st release of Michael Lewis’ book “Flash Boys.” In the book, Lewis characterizes the stock market as being rigged, which has institutional investors and outside observers alike demanding some sort of SEC action. The vast majority of this criticism is aimed at high-frequency traders, who use complex computer algorithms to execute trades several times faster than the blink of an eye. One of the many complaints against high-frequency traders is over parasitic trading practices, such as front-running. Front-running, in the era of high-frequency trading, is best defined as using the knowledge of a large impending trade to take a favorable position in the market before that trade is executed. Put simply, these traders are able to jump in front of a trade before it can be completed. This Note explains how high-frequency traders are able to front- run trades using superior access to information, and examines several proposed SEC responses. INTRODUCTION If asked to envision what trading looks like on the New York Stock Exchange, most people who do not follow the U.S. securities market would likely picture a bunch of brokers standing around on the trading floor, yelling and waving pieces of paper in the air. Ten years ago they would have been absolutely right, but the stock market has undergone radical changes in the last decade. It has shifted from one dominated by manual trading at a physical location to a vast network of interconnected and automated trading systems.1 Technological advances that simplified how orders are generated, routed, and executed have fostered the changes in market † J.D.
    [Show full text]
  • Michael Lewis's the Undoing Project: a Friendship That Changed Our
    Midwest Social Sciences Journal Volume 23 Issue 1 Article 12 11-2020 Michael Lewis’s The Undoing Project: A Friendship That Changed Our Minds David McClough Ohio Northern University Follow this and additional works at: https://scholar.valpo.edu/mssj Part of the Anthropology Commons, Business Commons, Criminology Commons, Economics Commons, Environmental Studies Commons, Gender and Sexuality Commons, Geography Commons, History Commons, International and Area Studies Commons, Political Science Commons, Psychology Commons, and the Urban Studies and Planning Commons Recommended Citation McClough, David (2020) "Michael Lewis’s The Undoing Project: A Friendship That Changed Our Minds," Midwest Social Sciences Journal: Vol. 23 : Iss. 1 , Article 12. DOI: 10.22543/0796.231.1033 Available at: https://scholar.valpo.edu/mssj/vol23/iss1/12 This Article is brought to you for free and open access by ValpoScholar. It has been accepted for inclusion in Midwest Social Sciences Journal by an authorized administrator of ValpoScholar. For more information, please contact a ValpoScholar staff member at [email protected]. McClough: Michael Lewis’s The Undoing Project: A Friendship That Changed Ou Book Review Michael Lewis’s The Undoing Project: A Friendship That Changed Our Minds* DAVID MCCLOUGH Ohio Northern University Lewis, M. 2017. The Undoing Project: A Friendship That Changed Our Minds. New York: W. W. Norton & Company. 362 pp., $28.95. ISBN:978-0393-25459-4. ABSTRACT The Undoing Project examines the relationship between two psychologists, Amos Tversky and Daniel Kahneman, whose work altered how we understand the functioning of the mind. In this book, Lewis embarks on a journey to understand and explain psychological research to a popular audience.
    [Show full text]