ENTERTAINMENT (Continued from page 36)
yet, and first-day sales of single tickets were up more than 45 percent from last year, Flint reported. “Business as usual becomes invisible,” he said. “We’re trying to solve that problem. When an organization reinvents itself to be more energetic and alive, people notice.”
Playing Hardball with Wall Street
Michael Lewis had just a few minutes over the phone between speaking in Las Vegas and catching a plane to Germany, where the prolific author (Moneyball, The Big Short, The Blind Side, and Liar’s Poker, to name just a few) was to receive an award. But that was plenty of time for the former financial Salomon Brothers bond salesman-turned-financial-journalist and nonfiction author to touch on both baseball – the Oakland A’s having just lost the wild card game – and Wall Street, the subject of his latest book, Flash Boys: A Wall Street Revolt, another opus in Lewis’s reportorial storytelling style asserting the U.S. stock market is rigged for the benefit of insiders. The book has not only sparked a lot of controversy, it’s also drawn the attention of Oscar-winning screenwriter Aaron Sorkin (The Social Network, Moneyball, TV’s The West Wing, and Newsroom) and producer Scott Rudin (who also worked on Moneyball), who are collaborating on a forthcoming film. Lewis returns to Santa Barbara to speak at the Granada Theatre on Tuesday, October 21, as part of UCSB Arts & Lectures’ Word of Mouth series, a trip he said he’s looking forward to after enjoying dinner at event sponsor Craig McCaw’s house seated next to Don Johnson the last time through. Even as grizzled a journalist as Lewis found the experience eye-opening. “I’m still living off that,” he said with a laugh. “He was so different from what I expected.”
Q. I know we should talk about Flash Boys, but I’ve got to start off with Moneyball, since we’re in the midst of the baseball playoffs. While Oakland lost – the curse of Billy Bean in the post-season – all the other underdogs won by playing some sort of version of Moneyball. What are your thoughts about the season, about the influence of the book and movie on the game? Are there still inefficiencies in the game? A. There’s no questions that the inefficiency in the market isn’t anything like what it was when I wrote the book. But the sport is being studied in a way that’s never happened before, and all sorts of stuff is coming up. There is a really good piece to do on the research and the analytic work that some of the front offices are doing. How I know this is true is that I tried to talk Billy Beane into letting me come in and write a magazine piece about last season. He didn’t want me anywhere near because he thinks he knows things (others don’t). He doesn’t want me to blow it (for them) again. I do think, though, in the long run that they’re doomed, because the inefficiency will be squeezed out of the sport. Okay, so on to Flash Boys and the not-so-above-board ways of exploiting markets. How does this sort of thing happen, that the market and trading can be rigged? Is it just human nature of unchecked greed? Technology not able to keep up? It’s the nature of Wall Street. It’s not an immoral industry, but it’s amoral. The first instinct of the financial sector is to exploit opportunities without thinking about the social consequences. In this case, it was accidental, a combination of well-meaning but somewhat wrongheaded regulation and technology led to this opportunity for some people to front run everybody else in the market. In a more perfect world, people would raise their hands and say “We’ve got to fix this!” Instead, they decided to make a whole bunch of money.
Author Michael Lewis comes to the Granada
When you have an industry that is very complex and regulators who don’t get paid anything in relation to people actually in the industry, that’s a recipe for trouble. How you fix it is a whole other question. The reason I wrote the book was discovering these guys who might actually have a solution through entrepreneurship. I’ve given up on the regulators, because I don’t think they can or will do much. But I do think if you have enough market pressures – if the customers can be organized sufficiently – you might get some movement. You might get more rational behavior. Is there a nutshell way to explain the loophole that’s the subject of the book? The story is about a Canadian guy who figured out the various ways that people are being preyed on in the market by high-frequency traders (HFTs) who are sold an advantage. There are actors in the market who have an advanced view of all prices and are allowed to trade with ordinary stock market orders and old prices. So they already know the result of the horse race before it’s run, and they get to bet against you. That’s a crude example, because it’s actually infinitesimal fractions of a second, which turn out to matter. It creates a totally unnecessary scalping operation in the middle of the market. They only trade with you if it’s at a price that advantageous to them. This would be illegal if it weren’t being done with computers. But for whatever reason, it’s been accepted by the SEC because it’s being done by high-speed computers.
So isn’t that a simple fix? Well, yes. There are things the regulators could do. But they don’t. Because for one, anything they do to change the speed of the market would likely just create more loopholes to exploit. But the bigger problem is whether they have the will to regulate. Which they don’t, because they all want to go work for HFTs. In the book, the main character... does a study about how many people who worked at the SEC left to work for HFTs in the past few years. They stopped looking when they got to 257. I’m not being cynical; this is just the way it is. People go work for the SEC so they can get jobs on Wall Street. The last thing they’re going to do is piss them off. All of your books about Wall Street have created some controversy, but nothing like the backlash for Flash Boys. You know why? Because it’s the first time I’ve tried to take money away from people. The previous books had descriptions of what had happened, but none of them had financial implications for the actors or were going to lead to anyone losing their business. I’m just trying to tell the story of the guys who are doing what they’re doing. But the effect (is threatening) the most lucrative business on Wall Street where people are making a billion dollars a year doing this. If my main characters have their way, the business would be shut down. Is that what you were looking for? I’m not a bomb-thrower. I just loved the story. So, I’m of two minds about the reaction. On the one hand, I think it’s great that all these investigations have been launched as a result of the book, and it might lead to reform. But on the other hand, when a book becomes so controversial, it doesn’t get read as just a book anymore. I’d rather it (just be) a story, not a piece of agitprop. But it’s a small price to pay if it actually might change the •MJ world.
93108 OPEN HOUSE DIRECTORY
SUNDAY OCTOBER 19
If you have a 93108 open house scheduled, please send us your free directory listing to realestate@montecitojournal.net
ADDRESS
TIME
$
#BD / #BA
AGENT NAME
TELEPHONE # COMPANY
2733 Sycamore Canyon Road 1366 Oak Creek Canyon Road 1398 Oak Creek Canyon Road 1522 East Mountain Drive 1620 East Mountain Drive 1445 South Jameson Lane 2170 Ortega Ranch Lane 900 Park Lane West 880 Buena Vista Avenue 805 Romero Canyon Road 734 Via Manana 302 Ennisbrook Drive 11 Seaview Drive 905 Aleeda Lane 707 Santecito Drive 160 East Mountain 645 Circle Drive
By Appt. 1-4pm 1-4pm 2-4pm 1-4pm 1-4pm 1-4pm 2:30-4:30pm 2-4pm 1-4pm 12-2pm By Appt. By Appt. 2-4pm 1-3pm By Appt. 2:30-4:30pm
$15,900,000 $13,800,000 $13,650,000 $7,950,000 $7,500,000 $5,495,000 $4,675,000 $3,795,000 $3,495,000 $3,380,000 $2,650,000 $2,195,000 $1,845,000 $1,499,000 $1,445,000 $1,195,000 $899,500
6bd/7.5ba 5bd/7ba 6bd/6.5ba 3bd/3.5ba 6bd/7.5ba 5bd/6.5ba 3bd/3.5ba 4bd/5ba 3bd/5.5ba 6bd/6.5ba 4bd/3.5ba Land 2bd/2ba 3bd/2ba 3bd/2ba Land 2bd/2ba
Joseph Boudre Loyd Applegate Cecilia Hunt Karen Strickland Linos Kogevinas Diane Randall Andrew Petlow Don Hunt Jenny Hall Wilson Quarre Shandra Campbell Riskin Associates Sally Clyne/Lyla Clyne Patty Schwartzkopf Debby Rexford Riskin Associates Timm Delaney
319-5364 570-4935 895-3834 455-3226 450-6231 705-5252 680-9575 895-3833 705-7125 680-9747 886-1176 565-8600 845-1095 883-8578 886-8773 565-8600 895-1109
16 – 23 October 2014
My uncle’s dying wish was to have me sitting on his lap. He was in the electric chair. – Rodney Dangerfield
Sotheby’s International Realty Village Properties Village Properties Sotheby’s International Realty Berkshire Hathaway HomeServices Sotheby’s International Realty Sotheby’s International Realty Village Properties Sotheby’s International Realty Sotheby’s International Realty Village Properties Village Properties Village Properties Berkshire Hathaway HomeServices Berkshire Hathaway HomeServices Village Properties Berkshire Hathaway HomeServices
MONTECITO JOURNAL
45