Never mind Michael Lewis. The most interesting and provocative thing to be written of late about financial innovation in general, and high-frequency trading in particular, comes from Joe Stiglitz. The Nobel prize-winning economist delivered a wonderful and fascinating speech at the Atlanta Fed’s 2014 Financial Markets Conference today; here’s a shorter version of what Stiglitz is saying.
CNBC might be guilty of a tiny bit of hyperbole when they say that their HFT debate today, between the CEOs of rival exchanges IEX and BATS, “stopped trading on the floor of the New York Stock Exchange” and “Twitter stopped too”. Still, they undoubtedly caused a lot of buzz, and the debate — coming, as it does, in the wake of the release of Michael Lewis’s new book on the subject — is an extremely important one, and it is indeed of great interest to that most endangered of species, the NYSE floor trader.
I’m halfway through the new Michael Lewis book — the one that has been turned into not only a breathless 60 Minutes segment but also a long excerpt in the New York Times Magazine. Like all Michael Lewis books, it’s written with great clarity and fluency: you’re not going to have any trouble turning the pages. And, like all Michael Lewis books, it’s at heart a narrative about a person — in this case, Brad Katsuyama, the founder of a small new stock exchange called IEX.