You know Michael Lewis is onto something with Flash Boys when a Forbes contributor writes a painfully sarcastic put-down of the book without even reading the book. Lewis managed to keep the subject of Flash Boys a secret pretty much up to its publication date—a rarity for the publishing industry. And when it was revealed that Flash Boys was going to rip the lid off the mechanics of high frequency trading, Wall Street lost its mind. ("Small investors benefit from the existence of HFT. So do large investors in fact," huffs the above linked Forbes piece. Well. If everybody wins, how can it be bad?)
Will anything change as a result of Flash Boys? Lewis said there was a possibility that nobody will be punished for abuses of high frequency trading. For one thing, the system is pretty much rigged from top to bottom. Lawmakers will do whatever Wall Street lobbyists ask, the SEC has an unbelievably cozy relationship with HFT organizations, and Wall Street is pretty good, Lewis said at running "in the direction in which they're not fucked." In an ideal world, Lewis said to an audience question, "we need more market forces on Wall Street, basically." He says that technology has enabled investors to pretty much take the middle-man out of the stock-buying equation, but that Wall street is "generating complexity" in the system "just to create an advantage for itself." By urging their mutual funds to not invest in HFTs, Lewis said, consumers can take some of the power away from these people who are rigging the system. In the last few days, he's seen quite a few large investment firms, including Charles Schwab, issue stern statements on the topic of HFTs. Lewis sounded surprised by his book's effect, and maybe even hopeful that HFT firms won't be able to get away with gaming the system any longer.