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4.03 AVERAGE
4.03 AVERAGE
Excellent read! The mystery hunt at the end made it even more special and for the lazier of fellow readers, here's a hint - Manoj Narang :)
Didn't know I would ever read a feel good story about Wall Street, but this is it. Great read, although very technical for someone not in finance
An intriguing and disturbing look at Wall Street and how stocks are now traded despite the interests of the investors. High speed "trading" by taking advantage of a regulatory loophole combined with investment banks' greed and paranoia has created a messed up stock trading world of deceit.
hopeful
informative
inspiring
medium-paced
Michael Lewis has a way of writing which picks out the human stories in the heart of complex systems. While this means this book doesn’t cover technical detail in any great detail, his writing is engaging, and I couldn’t help reading more and more.
informative
reflective
fast-paced
Human history could also be dubbed the history of unintended consequences. There's no place where this is more apparent than in the American financial system. Don't get me wrong America is great. There's still a lot of opportunity here if you know where to look, how to manage your business, and make good decisions.
There are problems though: a ballooning national debt, addiction to cheap credit lines, and hyper-consumerism. At the beginning of Flash Boys, Brad Katsuyama notes about his first year in America "everything was to excess. People lived beyond their means and and the way they did it was by going into debt" (p.24).
Another problem is that the financial system is made increasingly difficult to comprehend, even for the people who have made it their life's work. How else can short-selling or credit default swaps be explained? It's a game of hot potato that keeps ending in unpopular bailouts. In the race to make money, everybody is looking for an edge. Computers that were supposed to make the markets more efficient, create unfair advantages elsewhere. Banks and brokers that should be looking out for their customers only truly show concern for executive bonuses and their own bottom lines.
So who protects the little guy? The government? As L. Bob Rife notes in Snow Crash "Y'know, watching government regulators trying to keep up with the world is my favorite sport"(p. 130). There are only a couple of avenues for the rest of us: 1.) hope that someone honest can gain such footing and power within the system that they can force change or 2.) take the power back Wall Street Bets-style (and possibly face prison) or 3.) we can hope that everyone in the financial industry grows a conscience overnight. There's also the alien invasion that would make all money worthless.
Flash Boys is full of many of the same hijinks and shenanigans that lead to the some of the greatest hits throughout the history of the market including: Black Monday, the Global Financial Crisis and many more. The story circles around two primary evils of the modern market. First there are the dark pools. Nothing with the word "dark" in it is ever good. Dark side? Dark money? Dark chocolate? This is an unofficial market place where big banks and brokerages can execute buy and sell orders with little or no oversight and rarely at the fair market price. Why don't they achieve a fair market price? That would be due to the second big problem: High Frequency Trading. These two entities got together to design a bunch of strategies to inflate their own pockets at the expense of small investors.
There is some hope though as Flash Boys also shines a light on the Investor's Exchange (IEX). This is a stock exchange designed (if the Lewis and the owners are to be believed) to create fairness in buy and sell orders. I think it's at least worthy of a look if you are interested in economics, finance, or investing. If nothing else, it will make you even more aware of things you may need to be on the lookout for.
There are problems though: a ballooning national debt, addiction to cheap credit lines, and hyper-consumerism. At the beginning of Flash Boys, Brad Katsuyama notes about his first year in America "everything was to excess. People lived beyond their means and and the way they did it was by going into debt" (p.24).
Another problem is that the financial system is made increasingly difficult to comprehend, even for the people who have made it their life's work. How else can short-selling or credit default swaps be explained? It's a game of hot potato that keeps ending in unpopular bailouts. In the race to make money, everybody is looking for an edge. Computers that were supposed to make the markets more efficient, create unfair advantages elsewhere. Banks and brokers that should be looking out for their customers only truly show concern for executive bonuses and their own bottom lines.
So who protects the little guy? The government? As L. Bob Rife notes in Snow Crash "Y'know, watching government regulators trying to keep up with the world is my favorite sport"(p. 130). There are only a couple of avenues for the rest of us: 1.) hope that someone honest can gain such footing and power within the system that they can force change or 2.) take the power back Wall Street Bets-style (and possibly face prison) or 3.) we can hope that everyone in the financial industry grows a conscience overnight. There's also the alien invasion that would make all money worthless.
Flash Boys is full of many of the same hijinks and shenanigans that lead to the some of the greatest hits throughout the history of the market including: Black Monday, the Global Financial Crisis and many more. The story circles around two primary evils of the modern market. First there are the dark pools. Nothing with the word "dark" in it is ever good. Dark side? Dark money? Dark chocolate? This is an unofficial market place where big banks and brokerages can execute buy and sell orders with little or no oversight and rarely at the fair market price. Why don't they achieve a fair market price? That would be due to the second big problem: High Frequency Trading. These two entities got together to design a bunch of strategies to inflate their own pockets at the expense of small investors.
There is some hope though as Flash Boys also shines a light on the Investor's Exchange (IEX). This is a stock exchange designed (if the Lewis and the owners are to be believed) to create fairness in buy and sell orders. I think it's at least worthy of a look if you are interested in economics, finance, or investing. If nothing else, it will make you even more aware of things you may need to be on the lookout for.
This story recounts unsung modern day heroes who were willing to look beyond everyday greed. Amazing to think that high frequency trading was happening at almost the same time as investigations into the subprime mortgage credit default swaps. Both depressing and incredible - but at least the story seems to have a happy ending.
This:
“Once very smart people are paid huge sums of money to exploit the flaws in the financial system, they have the spectacularly destructive incentive to screw the system up further, or to remain silent as they watch it being screwed up by others. The cost, in the end, is a tangled-up financial system. Untangling it requires acts of commercial heroism—and even then the fix might not work. There was simply too much more easy money to be made by elites if the system worked badly than if it worked well. The whole culture had to want to change. “We know how to cure this,” as Brad had put it. “It’s just a matter of whether the patient wants to be treated.”
This:
“Once very smart people are paid huge sums of money to exploit the flaws in the financial system, they have the spectacularly destructive incentive to screw the system up further, or to remain silent as they watch it being screwed up by others. The cost, in the end, is a tangled-up financial system. Untangling it requires acts of commercial heroism—and even then the fix might not work. There was simply too much more easy money to be made by elites if the system worked badly than if it worked well. The whole culture had to want to change. “We know how to cure this,” as Brad had put it. “It’s just a matter of whether the patient wants to be treated.”
I liked this, but ultimately I wanted more detail, BUT IT WAS GOOD