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Michael Lewis: Nobody Understands the Stock Market

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April 2 (Bloomberg) -- "Flash Boys: A Wall Street Revolt" Author Michael Lewis discusses his book, trading and the stock market on Bloomberg Television's "Market Makers." (Source: Bloomberg) -- Subscribe to Bloomberg on YouTube: http://www.youtube.com/Bloomberg Bloomberg Television offers extensive coverage and analysis of international business news and stories of global importance. It is available in more than 310 million households worldwide and reaches the most affluent and influential viewers in terms of household income, asset value and education levels. With production hubs in London, New York and Hong Kong, the network provides 24-hour continuous coverage of the people, companies and ideas that move the markets.
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Text Comments (688)
R8 Clubby (1 day ago)
Surprised that they had michael on in the first place, Bloomberg aren't gonna admit the markets are rigged against mum and pop investors/traders.
Brand Account (1 day ago)
Why do the hosts get so defensive when faced with the facts?
john Johnson (2 days ago)
A body regulating a market that affects it
Mike Fedele (4 days ago)
The austrian school seems to offer the most rational explanation of the failure of modern finance. It starts and ends with the prostitution of the money supply by govt and financial cabals.
paul bolger (5 days ago)
hft should be banned its just theft
Jerzy Feliks (6 days ago)
why are you so invested in the idea that this is fair? now that is a silly question. It's a tv show that caters to individual investors, people who need to believe that they are not being conned in order to continue investing in the stock market. An attack on the integrity of the stock market is an attack on relevancy of shows like theirs and therefore their livelyhood
D Wetick (7 days ago)
This interview and its content is not understandable.
TREX LEX (7 days ago)
Its all rigged.
Changling (8 days ago)
That broad is such a dumb whore. Jeeez what an ignorant slut.
Phil Swaim (10 days ago)
The reporters were talking about everything else except what he was talking about. Who are they defending and why?
Anchorsup 2017 (11 days ago)
2 dumbest interviewers in the planet
3Vimages (11 days ago)
Shut up and listen bitch or get the coffee.
colleen t (12 days ago)
Wow, I mean I knew there was cheating going on but Wow.
Ed Va (12 days ago)
He forgot about the media actively advertising the big winners in a rigged casino game.
Milt Farrow (13 days ago)
10 years as a trader ending i987- after seeing that cabal i quit the following year-baer stearns was my clearing house- a total scam
Milt Farrow (13 days ago)
Its' a Bullshit Manipulated market
Bang Duck (14 days ago)
The title should "Nobody really understands latency", maybe show a massively multiplayer game video clip where players are in combat and some players have 10 millisecond latency versus others with 100+. A player on satellite internet will never be competitive in reactive games like Call of Duty, World of Warcraft, Fortnite, to name a few.
Apple Juice Simpson (15 days ago)
*_May 6, 2010_* How the hell. Please try to explain how that happens. How is a flash crash like that _humanly_ possible? But the dangers of HFT are not just seen on the occasionally freak-day, they are constant. I am not one to stifle innovation, nor a conspiratorial type. Simply put, the market should be a market of equal opportunity. I'm not making any sort of authoritarian argument of equal outcome, that's goes against literally ever principal of stocks trading itself, but how in the world is the market a _fairer_ market with the expansion of HFT? It's not. How can anyone sitting in their home in small town USA have the insight and knowledge to invest in the market on a daily basis and hardly ever loose in a day of trading. It's just not possible. *HFT does **_NOT_** investing in ownership of a company, they're just extorting the money of those who do.*
Bryan Hanson (16 days ago)
first thing he is an author and just fishing putting around an idea but never being thorough kinda glad he just a wondering book author kinda like not impressed how he takes the time shovel his crap . very glad he knows no truths of high finance or any finance infact kinda looks like a drunk that had a half ass idea prolly over heard through the real people in the know about what is in play and whats not being in M&A any questions on what i wrote or you have feedback or a crappy input i like to read . peace out .
h (16 days ago)
Why do these interviewers keep cross talking over Michael Lewis?
BOCopy Trading Club (17 days ago)
Male host is a cock.
J. Luke Arenberg (18 days ago)
This guy does not seem to understand the stock market. He hasn’t explained it all aside from value gambling analogies and saying the game is rigged. I think he should stick to writing hack fiction
Pere Davison (18 days ago)
One more way us "little people'' get @#$%ed by Wall Street and our ''Government "
Pere Davison (18 days ago)
The host's show they're stooges for ''Wall Street'' . They come off looking stupid. It's easy to see why Michael Lewis is a very successful author and the interviewers are hourly wage slaves.
Hin Or (18 days ago)
For an average investor front running is not a big deal. A regular Joe who trades a few times a year the difference in price will not be noticeable. Now if you are a day trader, trading dozens of times a day you will notice a difference but most likely you are losing money anyway.
g2gm (20 days ago)
Blockchain!!
4lly0ur8as3 (21 days ago)
The interviewers clearly weren't undestanding or wanting to understand that the exchanges are selling the rights to execute the orders to some third party for the only purpose of front running them, sounds like the exchanges are defrauding their clients.
- Samuel - (22 days ago)
TRUMP WINS!!!
Niket Dube (24 days ago)
The most stupid interview hosts I have ever seen! Bravo Bloomberg, Bravo!
Anthony Salters (25 days ago)
People who think the market is rigged need to stop fighting it. I don't care if its rigged. If they can make money from it others can ride on their coattails. The market is like any other "rigged"system. Some people call opportunities "loopholes" the only difference is one group is not fighting the system and the other is.
KryzMasta (25 days ago)
Ladies, gentlemen, thank you for coming, please take your seats. I’m mr. Buttworth. Welcome to Missing The Point 101. If you think you’re in the wrong classroom, you’re in the right classroom.
Andrew Black (26 days ago)
if no one understands the stock market, then you wouldn't understand if anyone understood the stock market. you would need to understand the stock market to know if anyone understood it.
Anna Allen (27 days ago)
Wow! October 2018 and this is more true than ever. People, get ready for the Mother of all Crashes within a year!
Bunne Rabb (30 days ago)
That's because the stock market doesn't exist. It's a bunch of competing computer viruses running in some server rooms in NJ.
ja maguire (1 month ago)
Hey, Bloomberg, how about putting (in the description for this YouTube video) the names of your employees who are interviewing the subject?
Brent Stewart (1 month ago)
These media people can't seem to grasp whats going on. Why do they think that front running is a justification for lower trading costs. you can have one without the other.
tsuba14 (1 month ago)
wow bloomberg, please get these idiots away from interviewing... fail.
Justin Stein (1 month ago)
4:39
Xenu#Scientology (1 month ago)
I see capitalism as the problem, but i realized this system is a serpent that is eating its tail.
Belladonna xafar (1 month ago)
he does not let anybody talk!
benevolent dictator (1 month ago)
Michael Lewis being polite with the ignorant belligerent. Humorous tragedy...another movie
benevolent dictator (1 month ago)
Dumb-ass TV personality has no idea what his challenge is challenging. Michael Lewis delivers the reality and the egos of the TV personalities can not believe they have been lied to or they have a lobbyist p(L)aying them to perform in there favor.
Brinner Dang (1 month ago)
This is not the first time I've heard of this happening. I came here to learn more about the subject. In between interruptions I learned that these two moderators never heard of google or prepping beforehand. @ssholes.
masny vlas (1 month ago)
iterveiwer is clearly jewnited
Oskar Thunberg (1 month ago)
Screening during interviews, that's American tv to me.
Sean J (1 month ago)
its embarrassing how much they interrupt the guest
Todd Lavigne (1 month ago)
HRT must have killed scalpers, but I don't see how it would have killed swing or longer term traders. If the market was truly rigged then nobody ( the public ) would ever make money and wouldn't the vast majority of money would leave the market ???? why would you invest or trade if you had 0 chance of a return?
Enclave Texas (1 month ago)
These reporters suck. Shitty listening skills and comprehension along with an inability to ask relevant questions.
Ryan (1 month ago)
Bloomberg and CNBC hosts are always so clueless. Just repeating talking points
Judean People's Front (1 month ago)
It's a FRAUD that simple
Only milliseconds who cares. I trade Myself, its easy. Who needs another trader.
CJ F (1 month ago)
Michael Lewis continues to spew misinformation about these topics to sell fear and books. Most investors and traders should not be fearful of HFT algos and trading. The effects of HFT are better for individuals because we are constantly getting priced improved, as HFT firms compete for our order flow. The times that we should be fearful of HFT is when they decide to leave and liquidity dries up. This would mean that there is no longer any bids/offers to help offload our positions when the time to is crucial. The argument that HFTs do not have skin in the game is also incorrect. Unless they are spoofing (which is illegal), they are providing liquidity to the market. This means they are constantly playing between the bid-ask and trying to collect their piece in the value creation in the process. It is no different than aspects of real estate and people taking their share. I would rather that I have to give up .01 spread so that the HFT can get their .01 to get the position on that I want, than pay .05-.10 (OR MORE) spreads in market dynamics like Lewis is advocating for. Algorithms are searching the market for what their models declare as inefficiencies or mispricings as well. They are willing to build a position that the model claims is mis-priced, which they will quickly offload when the situation presents itself. When playing in deep, liquid markets - this often can happen in seconds.
gshiohara (1 month ago)
the reporter got crushed in his attempt to play devil's advocate
Philip Giacalone (1 month ago)
This Bloomberg host are clearly defensive about the fact that the market IS RIGGED. It bothers me that obvious facts are questioned and denied by these Bloomberg hosts. Just because trading fees are lower does not mean that the system isn't rigged. Hello! These are 2 completely different things. These 2 Bloomberg hosts are clearly paid dupes. Nobody is as stupid as they are acting.
Dutchy McDutch (1 month ago)
Dude, why the fuck are you defending people for who are essentially insider traders? Being critical is one thing but Lewis is absolutely right that front running a trade is immoral and it should be illegal.
Alexis Martial (1 month ago)
1/ the hosts are biased [read "bought"], they know what is the topic, they just play around 2/ the real solution is go back to daily [or twice] price arbitrage
Alexis Martial (1 month ago)
Just give me ANY scientific study that shows real-time trading create value ;-)
Joshua Collins (1 month ago)
I want to punch both of these hosts in the face. Especially the guy. HFT adds no value and are just milking the system and creating risk.
Der Gorghast (1 month ago)
Lewis is always a great read! A at times pedestrian, but mostly erudite read. Go Michael !! You be the man!
D Haley (1 month ago)
there is no doubt the stock market is rigged, pump and dump stocks and IPO's are rigged all the time and no one even questions it. insider trades so many ways that the market is rigged
nose job, boom - why do woman make themselves aliens - and yes the market is rigged, by billionaires - who if they buy or sell it changes a companies value. If you own 90% shares in a company and you sell, what would happen to the price? - then all you need is a close group of friends with less money to give them a heads up when you are going to buy or sell. Thus you control the market and a few friends benefit with you by getting rich. On another note i get why he "the interviewer" is trying to defend or be against his notions - cause can't you see what he (the other guy) is doing. He is spouting out the truth of the stock market - being that the truth would set off a whole lot of investors, bringing down the economy. Funny how we lie , to keep the lie going hey. lol
Mark Yates (1 month ago)
The stock market is artificial these days. It's heavily skewed. It's long since been propped up with things such as quantitative easing and other forms of manipulation to keep it from crashing out. It will stay up so long as the federal reserve wants it to be up. There's constant intervention these days. When it does crash it will crash very hard.
bill tomson (1 month ago)
Why is it that the market says bid and ask then I go to buy something and the ask goes up as soon as I put in an order? It is a scam
Jughead Smith (1 month ago)
Cool.. so basically nobody use market orders anymore. Idk about what everyone else is using but if i send a market order in Questrade it will get filled at the best possible price at the time of execution i've gotten filled at lets say 2.31 when my screen said the price was 2.32 and so on. The only time i will send market orders is in a fast paced rally watching the 1 minute chart. Anything other than a rally i use limit orders only.
Daniel Johnson (1 month ago)
He didn’t explain this well.
Gar Leto (1 month ago)
Finally exposed..
Luis Ortiz (1 month ago)
endudstras que estan de mas
Luis Ortiz (1 month ago)
si se deve genarisal
Luis Ortiz (1 month ago)
casino depens wat dec es un fklow
Todd Andrew (1 month ago)
Buy and hold.
fors2345 (1 month ago)
Interactive Brokers. No HFT . Totally New Exchange. The Best, Fairest Brokers in The World. Absolutely No Front Running.
backspace4353 (2 months ago)
wow that is so close to what is going on. Wish the interviewers would let him finish and stop interrupting him.
steven padilla (2 months ago)
Like eddy Murphy said” you two are just a couple of bookies”
Hardware Software (2 months ago)
The interviewers didnt read the book and are ignoring his points. Idiots in suits.
Adam Momot (2 months ago)
What book are they referencing?
Ol Skool Trey (2 months ago)
Whistleblowers make money from their claims, as long as they can publicize their ideas, theory. When whistleblowers try to convince these industry pawn-soldiers (esp on TV), they'll simply play dumb. This applies to almost any industry.
Jacob White (2 months ago)
And that is why the best thing average Joe can do is buy Vanguards VUSD’s... there is no point in trying to beat the owners of the Casino or paying fees to investment bankers who don’t have a say in the game
Daniel (2 months ago)
Wow those hosts are so ignorant. Instead of getting defensive, read the freaken book
Danny Ye (2 months ago)
Arguing against people who twist your words and point into something completely different is the most frustrating and tiring thing ever 🙄 aka when Michael Lewis tried to explain how retail investors are the easiest prey for HFTs and the male interviewer changes the subject into low-performing mutual funds? What?
Joseph Clarke (2 months ago)
“HFTs are bad for average consumers” “But aren’t fund managers also inefficient” Dear Bloomberg, fire these morons.
vrmkk (2 months ago)
Is his sole argument based on HFT?
Haggai Weiser (2 months ago)
Kudus to Bloomberg for letting interviews go long and letting guests talk.
John DeBord (2 months ago)
Plus I don't think this particular problem will ever be solved unless we somehow develop a way to instantaneously send and receive data faster than the speed of light; like through quantum teleportation or something. But that seems very unrealistic. And I don't think we have any evidence that quantum teleportation is even possible.
John DeBord (2 months ago)
But this shouldn't really matter to anyone unless you're a day trader trying to scrape orders. For swing traders, or people trading over a longer time-frame, HFTs are actually a benefit because it adds liquidity. Am I right? Or am I missing something?
tlak (2 months ago)
I always thought the stock market was a ponzi scheme, and detrimental to the American public.
rajat sharma (2 months ago)
stupidity level max...what kind of dumb reporters are brought in to cover such a lucid thinker?
jkidkiloveu bleh (2 months ago)
Bro just look at Federal Reserve, it's all joke. LOLOL
Michael Kummer (2 months ago)
Thomas Peterffy is telling a big portion of the rigging story.. In 1977, Peterffy purchased a seat on the American Stock Exchange and played a role in developing the electronic trading of securities.
gerard pacificar (2 months ago)
If the hosts could stay quiet for 30 seconds, we could all learn something. Maybe they’re stretching out the segment for time.
Willi Hansen (2 months ago)
What utter muppets these presenters are. American news really are the most stupid in the world. No wonder Trump hates them so much (and I hate Trump).
indianetizen (2 months ago)
Somebody please dismiss that dumb lady . No offence, but necessary.
Roland Rick Perry (2 months ago)
Rigged suggests you won't make money, which is of course not the reality. Front-running is just one of the costs of doing business. Also in a casino, you don't have the opportunity to change your bet, after you make the bet. You can change your bet in the stock market. So that analogy has always been weak.
BOETHIUS (2 months ago)
its rigged for the losers and fair for the winners
EyeWitnessChina (2 months ago)
I understand it’s a sham. No actual stock ownership certificates are transferred. You don’t own stock ownership in a company. You simply get monetary share price action in the casino trade. You cannot hav actual equity in a listed company. You used to be able to in the past, though.
Big Jim (2 months ago)
The market is rigged.... Surprise!!!
ABC XYZ (2 months ago)
This guy is brilliant
fredocorleone (3 months ago)
When I used to put stock order trades out, I used to put my real limit order trade on the market and then quickly put a very large limit order trade on the other side, which was 10-20% from the market price...then move it slightly closer to the market price, until my real trade was completely picked up. My real trade would get taken quickly by the market-maker computers, because they also saw the huge demand from my other big-order-bait, then I'd simply cancel the other bigger order. You can manipulate the market maker algorithms with really large orders that are somewhat far away from the market price.
Kathy Ryan (3 months ago)
These two anchors are rude and condescending to their guest.
Thomas Randall (3 months ago)
Basically Michael Lewis is saying that a retail investor has no chance day trading. The small guy should only invest or at the very least hold on to shares for a year or so. That way if you get the short end by a fraction on your initial buy it will be negligible to your overall profit/loss over such a length of time. Fractions are everything in day trading and if you get the worst of it every time you open/close your position you have zero chance. This is the downside of capitalism. You get told that the only way to get ahead of the game (or at least have your savings stay ahead of inflation) is to have a stake in capitalism itself and buy some stock rather than put it in a bank account. But even then you get ripped off for doing the right thing. These institutions with all the dough take zero risk because they are just basically skimming off every retail investors trade but you have to do it because there is no other option. Even if you avoid managed portfolios which are basically a rip off, you still have to use a broker. What they take for what they do is not justified. The woman here is also right, the quotes they give you have been doctored. It probably occurs when you search for the stock symbol before executing the trade (which they make you do on the brokerage platforms). Complete con
Paul Pena (3 months ago)
Why is HFT legal? If insider information is illegal because it gives you an unfair advantage then why not HFT which gives you an unfair advantage.
J P (3 months ago)
He's speaking plain english but these "News Reporters" are complete morons.

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