Last evening on APM’s Marketplace, author Michael Lewis further explained his assertion that the stock market is rigged.
The face of the stock market — traders on the floor — is a mirage for the saps who watch TV and actually believe the traders are the ones who are controlling the selling, he said. They’re not, computers are. And they’ve gamed the system.
“Imagine a casino that wants to create a new poker game, and it wants to get people into the poker game. It goes to a handful of good poker players and it says, ‘Hey if you sit at this table you can deal the cards, and you alone will know that the decks have no fours, no nines and no queens in it. Then they go to tour bus companies and say ‘Bring in tourists to come play against these guys. We’re not going to tell those people that there are no queens or nines or fours in the decks.
“Of course, the guys who know the missing cards have this huge tactical advantage over the suckers who roll into the casino…. Basically, in this analogy the casinos are the stock exchanges, they provide this unfair edge to the high-frequency traders who are the card sharks and investors are the guys on the tour bus.”
Listen for yourself.
This revelation is not going over well at all with the people who make their livings on Wall Street.
On CNBC yesterday BATS Global Markets exchange president William O’Brien (BATS is where a lot of the rigging is said to be taking place) said “shame on both of you” to Lewis and Brad Katsuyama, the trader who first realized that a computer was consistently beating him to the punch on trades — by milliseconds — forcing him to buy a stock at a quick profit to the people who owned the computers.
The trading floor — or what they want us to believe is a trading floor — actually stopped to watch the fight, and it is worth every minute.
The only thing that would’ve made the fight better is if Mark Haines was still alive.