Guide to Michael Lewis’ top 6 “Flash Boys” videos – Is U.S. stock market rigged?

Monday, 14 April, 2014
Flash Boys cover and TOC

Flash Boys cover and TOC

Flash Boys” is a brand new (published March 31, 2014) book by famed writer Michael Lewis (author of The Big Short and Moneyball) about how the U.S. stock market is “rigged”! Yes a U.S. stock market that is “rigged” so much that big investors (managers of multi-billion dollars pension or mutual funds) to small investors (individuals that invest their own RRSP and 401(k) retirement money) are being electronically “scalped” and scammed. Without further delay, here is a guide to Lewis’ top 6 “Flash Boys” videos. Lewis has done a bunch of media appearances to promote this book. Seeing and hearing Lewis explain things in his words is a ton of fun. You will get to learn how Brad Katsuyama, a Toronto-born former Royal Bank of Canada trader, becomes the reluctant hero in this tale.

1) CBS 60 Minutes March 30, 2014 video segment: The first and most important “Flash Boys” video is the  must watch! All 14+ minutes are highly watchable, insightful, and may make you really angry once you understand some of the ways people rigged the market against investors! The last three out of four of the 60 Minutes Overtime clips add only a little bit of information and can be skipped. CBS has also provided a full transcript of the segment on the same page.

2) April 1st, 2014 live CNBC debate: The ‘epic’ debate on high-frequency trading between Michael Lewis, Brad Katsuyama and William O’Brien (BATS Global Markets exchange president) is another must watch. The debate was so heated and engaging that some traders on the NYSE exchange floor stopped to watch. (note: Some errors were made by both side and one critical factual error was important enough that BATS was forced to issue a correction on April 4th, 2014 “under pressure from the New York Attorney General’s office“.)

The reactions to the debate at the end of this Marketwatch article is worth a read too.

3) Charlie Rose (April 2nd, 2014 video): Charlie Rose did an wonderful job in this 25+ minutes chat giving viewers some great insights. Rose is seen by many as someone who sets the gold standard of conducting engaging and insightful one-on-one interview. Highly recommended. (April 22nd update: Watch full 50+ mins March 31st show on

4) Bloomberg Television’s “Market Makers” with Stephanie Ruhle and Erik Schatzker (April 2nd, 2014 video): The fun starts early when Lewis tried to explain how the U.S. stock market is rigged using a casino example and the poker players are cheated. The hosts didn’t seem to enjoy the example when they, themselves, were set to be the cheated players!

5) Bloomberg Television’s “Bloomberg Surveillance” (April 3rd, 2014 clips): You can watch different clips from the show here, here, here, here, and here. Just wish the hosts asked Lewis and Katsuyama better questions in the show.

6) Live Talks LA - Michael Lewis in conversation with Malcolm Gladwell – Flash Boys: A Wall Street Revolt (April 10th, 2014): This will likely be a very insightful conversation as one can reasonably expect from a chat between two best selling authors and wonderful story tellers. I just checked with Ted from Live Talks LA and was informed that this video will be posted hopefully tomorrow (April 15th) on Live Talks LA’s official YouTube channel first and later on video pages here and/or here. (April 18th, 2014 update: The video is now posted and it is great! Have a watch!)

7) Bloomberg - Book TV: Michael Lewis Takes Viewers’ Questions on His New Book “Flash Boys: A Wall Street Revolt.” Added on April 22nd.

Note: As Lewis and Katsuyama said many times, “High-Frequency Trading (HFT)” is too wide a term and hard to define so it is better to use terms like “high speed computerized scalping” where unfairness is built into the structure of the market (which is bad, very bad) vs “high speed computerized trading” which has reduced trading costs and enhanced investors’ trading experience over the years!

Additional video and audio clips:

* CBC News in-depth interview with Katsuyama (April 4th, 2014). Worth a watch.

* April 9th, 2014 CBC radio audio clip of Lewis (2:10 – 28:09) and a ~50 seconds short clip explaining “how High-Frequency Trading makes stock markets more like rigged casinos“.

* Here is a brief video clip of Berkshire Hathaway’s Charlie Munger saying (in May 2013), “I think it is very stupid to allow a system to evolve where half of the trading is a bunch of short term people trying to get information one millionth of a nanosecond ahead of somebody else“.

Additional references that worth a read:

* “Digging Into The Cliffhanger That Ends the New Michael Lewis Book“, April 7th, 2014. Recommended interesting tidbit of information for readers of the book.

* “Lewis Calls Flash Boys Blowback ‘Thoughtless’” April 2, 2014 Bloomberg Businessweek

* March 10th, 2014 SEC S-1 filing of Virtu Financial where it talks/brags about “As a result of our successful real-time risk management strategy, we have had only one losing trading day since January 1, 2008.” [HT CNBC Bob Pisani's "Michael Lewis' 'Flash Boys and high-speed trading"]

* “High-Frequency Traders Set for Curbs as EU Reins In Flash Boys“, April 13th, 2014 Bloomberg News

* “The need for speed is costing billions New York’s attorney general explains his investigation into high-frequency trading“, April 3rd, 2014, by ERIC T. SCHNEIDERMAN (New York’s attorney general)

C-Span - Q&A: Michael Lewis “The Big Short” - Added on April 22 (video uploaded on April 5, 2010)

NOTE: This article is cross-posted on by me.

Dianne Feinstein on the CIA and the Separation of Powers

Wednesday, 12 March, 2014

Dianne Feinstein, Democrat of California, chairwoman of the Senate intelligence committee, on the CIA and the Separation of Powers.  Watching and reading American history in the making (I hope).

Video via C-Span. Full text via Guardian.

The CIA: the double life of Dianne Feinstein (Guardian editorial)

March 13, 2014 update: “The CIA shows its fangs at home: Neil Macdonald – Spy agency allegedly hacked into senate committee computer

Post-concert thoughts

Saturday, 1 March, 2014

Post-concert thoughts (part 1 of 2)

Rereading “The Art of Producing 監製的藝術” (written 8 days before the concert) gives me a moment to think and reflect.

Post-concert thoughts (part 2 of 2)

For the record, these are my brief comments on the morning of March 2nd, 2 days after successfully staged Kashy Keegan‘s Hong Kong Dreams Come True Concert. I finally have a few moments to relax and reflect. If I can find time, I will try to write a longer article later.

- “Kashy, All those lights were for you!”

I told Kashy after the concert that the lights from the cellphone screens in October 2013 were mostly to support HKTV. Whereas, the cellphone lights when Kashy performed “This Is My Dream” at the end of the concert, the lights were for him! People came from all over Hong Kong to listen to Kashy’s music and support him! As I told Kashy moments after the concert, “All those lights were for you!”

Kashy, All those lights were for you!

Kashy, All those lights were for you!

- “3” for 生生不息 “99” for 長長久久, from 140 to 399

EastWeek 東周刊 interviewed me yesterday to ask about the concert. I told the reporter Kashy and I thought the concert was a success. Some supporters came all the way to Chai Wan to buy Kashy’s CDs and posters. And many came to buy tickets not long before the show starts. It was a bit disappointing (“令人有點失望”) to see only 140 tickets sold on 26 Feb, just two days before the concert. So we were happy to know that when the news of ticket sales situation was reported, Hong Kongers came out in support. And the theatre told us we sold 399 tickets! In Chinese, “3” for 生生不息 “99” for 長長久久, a nice way to symbolize the being of Kashy’s professional music career in Hong Kong.

- Perfect? No. We will get better.

Did we have a perfect concert? No, of course not! No self-respecting artists will say they are “perfect”. In the pursuit of perfection is the ideal. Do it. Learn it. Get better. Do it some more. Learn some more. […] 做。學習。做得更好。做多一些。學多一些。[...]

Big thanks for your support,
Kashy’s Hong Kong Dreams Come True Concert producer

The Art of Producing 監製的藝術

Thursday, 20 February, 2014

Kashy 8pm 2014 Feb 28 Concert Banner

Kashy 8pm 2014 Feb 28 Concert Banner

The Art of Producing 監製的藝術:
My journey as a concert producer 踏上演唱會監製之路
I do many things. I am a management consultant, documentary film director/producer, …, and now I’ve taken on the role as a concert producer. 我做很多種工作。我是管理顧問,紀錄片導演/監製,…,現在再加上演唱會監製的角色。
Some people say when you have done it, it is not bragging.有些人說,只要您真的做過,便不算車大炮。
I’ve never attended film school and then my first and only full-length documentary is in the national archive of Canada. 我從未上過電影學校,而我的第一套紀錄長片現正收藏在加拿大聯邦政府“國家圖書檔案館”之內。
I tell this story not to brag but to illustrate the capacity to learn within each and everyone of us. 我說這故事不是想自誇,而是想帶出您我每人都有的學習潜能。
Do it. Learn it. Get better. Do it some more. Learn some more. […] 做。學習。做得更好。做多一些。學多一些。[...]
Singer/songwriter Kashy Keegan, me and a team of great professionals (theatre & music) and unpaid volunteers (camera and production assistant) are working very hard to organize Kashy’s concert! 創作歌手Kashy Keegan、我及一個專業與義務的團隊,大家正在很努力籌辦Kashy的演唱會!
Kashy’s concert happens in 8 days at 8pm, Friday Feb 28th, 2014 in Hong Kong. Kashy的演唱會8日後,2014年2月28日,星期五,晚上8點在香港舉行。
We still have lots to do, music video to shoot, school visit to sing with students, media interviews, plus trying to sell out this concert! 我們還有許多事要做,拍攝音樂短片,參觀學校及與學生合唱,媒體採訪,試賣更多票,把這場演唱會賣個滿堂紅!
As producer, it is my job to be creative and to make things happen. 作為監製,我的工作是勇於創新,無中創”有”。
We have done some ground breaking things and will do some more in Hong Kong. 創新的事我們已經做了很多,到香港後將會試做更多。
The business/science of producing is not easy but the art of producing is harder. 監製(生意/科學)難,但掌握監製的藝術更難。
The “Art of Producing” is about the magic of producing something, out of nothing! 監製的藝術是一門從無中創”有”的藝術!
Please wish us luck! 請祝我們好運!
– Kempton – 錦堂
Kashy’s Hong Kong Dreams Come True Concert :: Friday 28/2/2014, Y-Theatre, Youth Square, Chai Wan. HK$198 & $168 Tickets on sale NOW! > :: telephone booking: 2111 5999 (10am – 8pm)
Kashy香港夢想成真演唱會,星期五 28/2/2014,Y綜藝館,青年廣場,柴灣。HK$198, $168 門票現正於各城市電腦售票處、網上及電話購票熱線發售!> ,電話訂票:2111 5999 (10am – 8pm)
Ref article: 香港式監製

Wallace & Kempton talk Bitcoin & Federal Reserve Chairs – English version

Friday, 14 February, 2014

Wallace and Kempton talk Bitcoin and Federal Reserve Chairs Bernanke & Yellen (**English** video recorded 20140212, about 20+ Minutes long)

Wallace S.T. Chan, my economist co-host, and I talked about Bitcoin and the two Federal Reserve Chairs Bernanke & Yellen in our first 2014 show. The video discussions in Cantonese and English contain similar but not identical information. We were able to sneak in a little bit more (and slightly different) content in our English chat.

Discussions re cryptocurrency like Bitcoin is very brief, early and preliminary and we didn’t preclude more extensive discussion about cryptocurrencies (Bitcoin or other much improved versions) may happen in the months/years to come. And given we only had 10 minutes or so for our Bitcoin chat, much more technical (crypto) and economics stuff could NOT be discussed. Here is a brief New York Times post by Nobel Prize winning economist Mr. Paul K. bashing Bitcoin to a pulp!

Wallace and Kempton talk Bitcoin and Federal Reserve Chairs Bernanke & Yellen (**中文 Chinese** video recorded 20140212, about 20+ Minutes long)

P.S. Sorry to my tech friends (sorry Austin Hill) who love Bitcoins. Well, I am a technologist/geek at heart but I also try to ground myself in solid Economics and real world insights. Yes, I allow myself to be interested by Bitcoin because it is cute and cutting-edge, whether it is useful or something I trust, that is a different matter. Have a read of what Paul wrote.

P.P.S. Paul is NOT always right but I happen to agree with him here in his way of bashing Bitcoin.

Hong Kong Freedom of Press under attack by CY Leung (HKSAR Chief Executive)?

Thursday, 13 February, 2014
20140213 Ms  Li Wei Ling Press conference

20140213 Ms Li Wei Ling (李慧玲) Press conference

Is Freedom of Press in Hong Kong  under severe attack by HKSAR Chief Executive Mr. CY Leung as Ms. Li Wei Ling 李慧玲 (FB page) alleged? You be the judge yourself after watch the full press conference. I personally believe Ms. Li Wei Ling 李慧玲 is a person of the highest integrity through her years of journalistic work. Have a watch of the clip 李慧玲回應被商台解僱事件記者會 starts at 1m23s (full press conference with Q&A on 2014/02/13, over 1 hour long) and judge for yourself.

Porter Airlines ordered to stop discriminating bumped passengers departing from Canada

Tuesday, 4 February, 2014

*** Porter Airlines ordered to stop discriminating compensation based on departing country

According to a ruling the Canadian Transportation Agency (CTA) handed down on Friday (announced in a press release issued today Monday Feb 3rd), Porter Airlines has been ordered to compensate bumped Canadian passengers travelling to the US. This CTA order finally forced Porter to match the compensation if flights departing from the U.S. So the compensation will now be “$650 or 200% of the airfare for delays of less than four hours, and $1,300 or 400% of the airfare for delays of over four hours” for flights departing from the U.S. (existing now) and from Canada (“by February 28, 2014“).

This positive improvement for air passengers is again the direct result of a complaint by Dr. Gabor Lukacs, a Halifax mathematician and air passenger rights advocate. Lukacs says that he is “very glad that Porter can no longer discriminate against Canadian passengers nor can it pocket the money of passengers without providing them service.

*** The Puzzling “Code of Conduct of Canada’s Airlines”

Lukacs explained in Friday’s decision, the CTA ruled that Porter does not have to comply with the “Code of Conduct of Canada’s Airlines,” a code agreed to in 2008 by the Harper government and Air Canada, Air Transat, and WestJet, and which has since become an industry standard.

Lukacs is puzzled as to why the CTA gave special treatment to Porter. When asked to elaborate on and add colours to his puzzlement, Lukacs explains (emphasis added),

What were are talking here about is the right of passengers for hotel, taxi, and meal vouchers in the case of flight delays/cancellations that are within the airline’s control, and which involve an overnight stay.

The industry standard, incorporated into the Code of Conduct, is to provice such vouchers.

The Montreal Convention only requires reimbursement of such expenses after they were incurred, but claiming expenses from an airline is a tiresome and difficult process. So, the advantage of vouchers is that the airline has to look after the passengers.

Just imagine yourself trying to find a hotel in an unknown city where you are stranded. It makes more sense that the airline will arrange for your accommodation, because they do know the city, they have the resources, and they can be billed directly for your accommodation.

It is also a problem that passengers are unaware of their rights, so if they are not provided vouchers, they do not have the courage to stay at a hotel at their own expense and claim it later – instead, they sleep at the airport, which is awful and unfair to the passengers.

*** The Toothless “Code of Conduct of Canada’s Airlines

Based on paragraph 17 of this Porter ruling, the “Analysis and findings” section states,

The Agency notes, as does Mr. Lukacs, that the Code of Conduct is voluntary, and was agreed upon by Air Canada, Air Transat and WestJet. The word “voluntary”, in and of itself, is clearly indicative of a free and unrestrained will. In that sense, the Agency cannot force a carrier, through an Agency decision, to abide by that Code. In any case, the Agency agrees with Porter that its Proposed Tariff Rules provide, to the extent required, reasonable remedies for passengers who have been affected by flight delays. The Agency therefore finds that the absence from Porter’s Tariff of all of the elements of the Code of Conduct does not render the Tariff unreasonable within the meaning of subsection 111(1) of the ATR.

It may seem to be crystal clear to some observers that a “voluntary” code written in flowery words doesn’t worth the sheet of paper the code is written on. When the CTA has no power to enforce the code given the code is “voluntary“, the welfare of air passengers can be ignored by Airlines which seem to only care about their bottom-lines instead of total customer services and satisfaction.


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