The Two-Way
7:31 am
Mon March 31, 2014

Book News: Stock Market Is 'Rigged,' Author Michael Lewis Says

Originally published on Mon March 31, 2014 9:28 am

The daily lowdown on books, publishing, and the occasional author behaving badly.

  • A new book by Michael Lewis, the bestselling author of Liar's Poker and Moneyball, says the stock market is "rigged" in favor of high-frequency traders. In Flash Boys: A Wall Street Revolt, which came out Monday after being kept under wraps for months, Lewis says that computer-based high speed trading is set up to benefit these traders at the expense of investors by anticipating orders by a fraction of a millisecond. The new book follows Brad Katsuyama, former head trader at the Royal Bank of Canada, who says he realized that when he sent an order to exchanges, it would reach the closest exchange fractions of a second earlier than the others, and that high-frequency traders would be able to use the infinitesimal time difference to buy the stock at the other exchanges and sell it back to him at a higher price. In an excerpt featured Monday in the New York Times Magazine, Lewis writes, "Technology had collided with Wall Street in a peculiar way. It had been used to increase efficiency. But it had also been used to introduce a peculiar sort of market inefficiency. Taking advantage of loopholes in some well-meaning regulation introduced in the mid-2000s, some large amount of what Wall Street had been doing with technology was simply so someone inside the financial markets would know something that the outside world did not." In an interview broadcast Sunday on CBS' 60 Minutes, Lewis said, "Complexity disguises what is happening. If it's so complicated you can't understand it, then you can't question it."
  • In an essay in The New Yorker, HarperCollins editor Barry Harbaugh addresses the pervasive truism that editors don't really edit anymore: "Editors edit. A lot ... I probably mark up fifty to a hundred pages a week, most of it on the weekend. I ask questions and cut sentences and write chapter titles and all that stuff."

The Best Books Coming Out This Week:

  • Leslie Jamison's The Empathy Exams contains universes. Her series of linked essays about empathy are a medley of journalism, memoir, and criticism. Really, though, they're a series of interrogations — of you, me, her, long-distance runners, poverty tourism, people who watch the reality show Intervention, people with Morgellons disease, whatever. Throughout the essays, Jamison keeps popping up from behind the curtain, as if to say, "Hello, I'll be the orchestrator of your emotional and intellectual journey today. Here are my limitations." At one point in her essay on people with Morgellons disease — a controversial condition that sufferers say can cause a crawling sensation, and fibers and crystals to grow out of the skin — she begins to make the disease into a metaphor. Then she stops herself: "It would be too easy to let all these faces dissolve into correlative possibility: Morgies as walking emblems for how hard it is to live in our own skin. I feel how conveniently these lives could be sculpted to fit the metaphoric structure — or strictures — of the essay itself." It is this self-interrogation, this doubt, this resistance to easy narratives that makes The Empathy Exams so memorable.
  • Based on the real murder of 19th century frog-catcher Jenny Bonnet, Frog Music by Emma Donoghue is a pleasantly intricate crime novel. Narrated by Jenny's friend Blanche Beunon, a "soiled dove" (burlesque dancer, prostitute), the novel describes Blanche's search for the killer amidst San Francisco's small-pox epidemic in the 1870s. The writing sometimes approaches camp: Her characters say things such as "A diamond in the rough, that's me!" or, about a gun, "Won that off a California Infantryman in a poker game." Come to think of it, her characters don't say things when they can "wail," "quip," "croon," "howl" or "bark" them, which can get grating. But overall, Frog Music is a rich and rewarding crime novel.
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