Michael Lewis is one of America’s most successful story-tellers. But in his new book, Flash Boys, a superficial one-sided discussion of “High Frequency Trading” (“HFT”) — and his repeated pronouncements that the stock market is “rigged” and a “fraud” — Mr. Lewis’s bombastic conclusions are as harmful as they are overstated.
High Frequency Trading is a term widely used — and misused — by people who know little of financial markets. It can mean so many things as to be nearly meaningless since almost anything a trader can do with a computer is much faster than what traders (like me) did in pits in years past. Compared to even recent trading history, nearly everything seems “high frequency” these days.
Among the HFT strategies that can be implemented by computer are some that are unobjectionable, such as “stat arb,” and some that are more controversial such as using high-speed exchange data feeds to try to “front run” large orders in the stock market.
Even here, however, the terminology is misleading because it implies that a firm is trading based on knowledge of an existing large customer order (generally one of the firm’s own customers) whereas the HFT strategy so detested by Mr. Lewis and others involves no such knowledge, but rather using clever logic and fast computers to guess whether a large order exists, and then to try to profit from that guess. Other than the compressed time frame, this is no different from what has happened in markets throughout centuries of trading history.
Flash Boys skims HFT like a surfer, thrilled by the ocean’s waves but not understanding the depths or the currents that really define it.
Please read the entirety of my article for The American Spectator here:
Here in Colorado, Republican state senator Scott Renfroe is taking his third shot at banning photo speed cameras and photo red light cameras. In large part due to Democrats' concerns with privacy following the revelations about NSA spying, Renfroe now has key Democratic support, including the president of the state senate and the speaker of the state house of representatives.
The Denver Post recently published an editorial arguing (unconvincingly) that the use of photo radar should be limited but not banned.
In my current piece for the Denver Post, I strongly disagree:
UPDATE: In testimony to the Colorado Senate committee hearing the photo radar ban bill, the Denver Auditor implicitly skewers the city's program with a few facts:
- The Denver Police Department have never shown a safety impact of either photo radar or red light programs despite the Auditor specifically recommending such studies: "To our knowledge, the Denver Police Department still cannot demonstrate that either program has had a tangible impact on improving public safety."
- The two programs "are generating over $7 million combined annually."
- "Because these programs were sold as public safety enhancements but are widely viewed as a 'cash grab' by the public, it undermines public trust to maintain photo enforcement programs that are profitable but whose safety impact has not been conclusively shown."
- One intersection chosen for installation of a red light camera "was not on the list of the Top 100 intersections in Denver by total crash count" and another was 32nd on the list.
By a 5-4 vote along the usual “conservative versus liberal” fault line, the Supreme Court has struck down aggregate limits on political contributions. Currently, the federal government restricts the amount of money a person may contribute to a political candidate, party, or PAC — these are called “base limits.” Base limits were not the subject of this case, McCutcheon et al vs FEC; instead the issue was the total amount a person may contribute, complying with base limits, across multiple candidates, parties, and committees. The effect of aggregate limits was to limit the number of candidates, parties, or PACs a donor could contribute to (without having to reduce contribution amounts to comply with the aggregate limit).
As the Court’s opinion, written by Chief Justice John (“Obamacare is really a tax”) Roberts, lays out,
For the 2013—2014 election cycle, the aggregate limits in BCRA (the Bipartisan Campaign Reform Act, also known as “McCain-Feingold”) permit an individual to contribute a total of $48,600 to federal candidates and a total of $74,600 to other political committees. Of that $74,600, only $48,600 may be contributed to state or local party committees and PACs, as opposed to national party committees. All told, an individual may contribute up to $123,200 to candidate and non-candidate committees during each two-year election cycle.
As of today, those limits no longer exist.
The majority’s decision is a tremendous blow for political liberty and free speech — which is no doubt driving Democrats crazy at this moment. Just wait until you read the next round of “The evil Koch Brothers” panic coming to MSNBC and an editorial page near you in the next several hours.
Please read the entirety of my article for The American Spectator here:
The Associated Press is reporting, quoting unnamed sources, that Attorney General Eric Holder is preparing a criminal indictment of Health and Human Services Kathleen Sebelius based on a still-secret joint finding by the Government Accountability Office (GAO) and the Justice Department that Sebelius received payments from a secretive conservative organization – thought to be tied to two wealthy drug dealers (known to their customers as the "Coke Brothers") and an associate of theirs in the arms trafficking business – in order to intentionally damage the functionality, credibility, and roll-out of the web site for the federal Obamacare exchange.
According to the sources, Sebelius received cash, a remodeled kitchen, and a red Tibetan Mastiff puppy (sired by a champion) valued at over $100,000, with the total compensation approaching $425,000.
In return, Sebelius agreed to publicly confirm and amplify statements made by President Obama and others – statements which Sebelius knew to be false – about the readiness of the exchange, the impact of the law on health insurance prices and on doctors' willingness to remain practicing medicine, the ability to “keep your plan” or “keep your doctor” if you like them, the assertion that they would not delay various deadlines, and other deceptions made to a gullible media along the lines of "everything's going as planned."
AP's sources state that the Department of Justice has captured (on both audio and video) a meeting of Secretary Sebelius with a representative of the organization in which an unidentified man, speaking with a heavy South African accent, argues that Sebelius should not receive as much money as previously agreed because the Exchange web site implementation by CGI Federal was so utterly incompetent that at least a third of Sebelius' responsibilities under their agreement were not needed; the system would destroy trust in itself without Sebelius' help.
Sebelius would have none of it, saying that the ineptness of the contractor and the hopelessly inefficient and bureaucratic staff at HHS were "some incredible dumb luck but I still did my part by refusing to offer even a 'first year business student' level of management or oversight."
The goal of the “brothers” was to fatally damage the trust of Americans in the Obamacare exchanges specifically, Obamacare more generally, and "big government" most broadly, especially among young adults and college students. In this, they seem to have succeeded, according to Obama administration internal polling cited in the criminal complaint against Sebelius.
The conservatives, through the front organization, further agreed to hire Sebelius to a "consulting" position if she were fired by President Obama. In that position, she would work with former Ohio Congressman Steve LaTourette who heads an anti-conservative “Republican” lobbying organization. In the same recorded conversation, the South African speaking for the organization says, “While Steve pretends to be a Republican, you can pretend to be a Democrat. Two can play at that game.”
However, both sides considered the “hire-if-fired” contingency unnecessary given the president's unwillingness to terminate the employment of other high-ranking officials whose records implied incompetence, corruption, or both, particularly Eric Holder himself, which the AP reporter notes as an ironic twist in this rapidly evolving story on this first day of April, 2014.
As education scholars at AEI put it, Douglas County, Colorado is the "most interesting school district in America" as it "tests the limits of education reform." And like any good reforms, Douglas County's revolutionary changes (which are likely important factors in making DougCo one of the fastest growing counties in the country) are being attacked by teachers unions, the ACLU, and other statist and anti-religion interests.
The Colorado State Supreme Court recently announced that it would hear the challenge against Douglas County's school choice program. While most observers expect (though without great certainty) that the Court will uphold the appeals court's ruling in favor of the program (overturing the prior ruling against the program by a liberal activist judge), the fact that this is going to the state's highest court makes it a critical and highly visible event in nationwide efforts to wrestle control over our kids' educations from teachers unions and bloated school district bureaucracies and return them to people who actually care: parents and teachers.
Although I am not religious, I find the arguments of the ACLU and others that these programs represent a constitutional violation of the prohibition against government establishment of religion to be ridiculous as a matter of law and to be harmful as a matter of public policy, trying to strip parents of the right to seek the best possible education for their children.
Many of those opposing DougCo's school reforms seem to have gone to the Melissa Harris-Perry school of parenting: "We have to break through our private idea that kids belong to their parents..." (For the record, although I have heard lots of liberals say lots of things, I have rarely heard anything as reprehensible, as harmful, as tyrannical as this point of view -- which is nothing more than the logical extension of Hillary Clinton's "It Takes a Village.")
Clearly, and the Supreme Court of the United States has already made this clear in the Zelman case, if the program is neutral as to religion, if the aid is going to the parents, if the program's aim isn't religious, if many different kinds of people can benefit, and if any benefit to a religiously-affiliated organization is incidental to the program's results, then the program is constitutional.
As an attorney for the Institute for Justice, which is representing the Douglas County School District, notes, "It’s not surprising that the court accepted the case, but it’s unfortunate because the scholarship program’s implementation is going to be delayed."
Colorado Senator Mark Udall didn’t get the memo (penned by Alex Sink, no doubt): Standing up for Obamacare isn’t exactly a winning strategy for Democrats in 2014. In an interview with Colorado Morning News (on 850 KOA in Denver, where my Saturday radio show airs), Senator Udall said that given the opportunity he would vote for Obamacare again. Likely Republican nominee Congressman Cory Gardner is already running an ad featuring the Udall interview, letting the incumbent’s words speak for themselves.
Never one to miss parroting a DNC talking point, when asked about an Americans for Prosperity ad running in Colorado tying Udall to the health care law which “just doesn’t work,” Udall attacked the Koch brothers, saying the billionaire supporters of pro-liberty candidates “really don't have the interest of Coloradans in mind.” (Udall didn’t get this memo either.)
Given Udall’s near-perfect record of voting with the Obama administration, it seems that the Kochs care more about my family’s welfare than Mr. Udall does; Mark wasn’t satisfied with voting in favor of the president’s policies 96 percent of the time in 2012, so he upped it to 99 percent in 2013.
Almost responding to host Steffan Tubbs’ question whether Udall would “still cast that vote” for Obamacare, Udall, again reading from this week’s Democrat script, said “The law is far from perfect,” but when pushed again he did actually answer the question: “I would do it again. Yes, I would…I think, look, if I were there I would say here are some things that we should have done differently…”
One has to wonder what part of Udall’s “Yea” vote on Obamacare on December 24, 2009 would support his strange hypothetical, “if I were there.” Just where do you think you were, Mark? I mean, pot wasn’t even legal in Colorado in 2009.
Please read the rest of my article for the American Spectator here:
Most of today’s discussions about “income inequality” focus on the economic and political impacts of Democratic tax and labor policies such as more sharply “progressive” income tax rates, raising the minimum wage, or increasing eligibility for overtime pay.
On the left, Paul Krugman, President Obama, media economorons (such as MSNBC’s Mika Brzezinski, poster-child for economic illiteracy), labor leaders, leftist think-tanks, and Democrats everywhere argue that redistributing income is either good for the economy or good for their political prospects or both.
Every once in a while, an honest leftist — which does not mean a correct one — makes an ethical argument such as Senator Elizabeth Warren’s (D-MA) comments (regarding Social Security, but she uses similar language to discuss most economic policy) that “this is a conversation about our values. It is a conversation about who we are as a country and who we are as a people.”
Putting aside Warren’s hyperbole that Republican tax policy is analogous to “deciding who among our most vulnerable will be left to starve,” at least she attempts to make a moral argument. (She’s roughly parroting the words of the single most reprehensible member of the House of Representatives, Alan Grayson (D-FL), who said in 2009 that the Republican health care plan was “if you get sick, die quickly.”)
Before proceeding, I offer one immediate concession: In a country which since at least FDR has been more interested in claimed good intentions and “fairness” than in positive outcomes, which for the last generation has seen politicians of both parties unabashedly unafraid to bankrupt the nation’s future in order to buy votes today, and which for the last half-dozen years has seen American voters, especially our young adults, taken in by a snake oil salesman of no accomplishment who nevertheless rose to become president and proceed to demonstrate why he had never accomplished anything else of note, it is not easy to sell moral arguments, especially regarding economic policy.
Please read the rest of my article for the American Spectator here:
Most Americans, and certainly most liberals, are uncomfortable with silencers on pistols. After all, it stands to reason (even if not always the case) that someone who has acquired the ability to use violence with a low risk of detection is more likely to be violent; silencing a weapon might indicate that someone is already planning such an act.
But when organizations which do violence, in both literal and figurative senses of the word, to far more people than criminals ever could, aim to do their dirty work in silence, those same liberals have no objection.
The most important institutional pillars of a free country include the government (not just the elected politicians, but also the bureaucracies which they spawn), the schools which mold our future leaders, scientific organizations (especially those which impact public policy), and the media which informs the citizenry.
In each of these areas, the detection of misdeeds, of a breach of faith, of inappropriate bias, should be open to exposure. Whether from a “customer,” an employee, a journalist, or even just a concerned citizen, the ability to discover what powerful societal forces are doing and to disclose that information is the political and academic equivalent of the retort of a gunshot. It alerts all around that something has happened. Just as most weapons (outside of war) are fired at targets or while hunting, the sound of a gun is not necessarily an indication that something bad has happened. But when it comes at an unexpected time and place, that sound is the best indication that some investigation, and perhaps some caution, is in order.
Instead, liberals in so many critical areas for civil society are walking around installing silencers (the more correct technical term and equally appropriate for this discussion being “suppressors”) on their colleagues and critics alike. No good can come of this; but then no good is intended of it.
Please read the entirety of my article for The Federalist here:
I don't mean that there are enough women in the workforce, or that women should be "barefoot and pregnant." After all, my mother was a US Navy Admiral.
What I mean is that I'm so tired of hearing people like the Obama administration economist who is speaking at today's White House press briefing, talking about all kinds of data regarding women in the workforce and elsewhere, and the left's obsession with a "wage gap."
Women have a lower unemployment rate than men, are a higher percentage of college students than men, and roughly equal percentage in graduate schools.
This economist (a woman, of course) makes the insane claim that raising the minimum wage would narrow the gender wage gap (because more women than men work in minimum wage jobs), when the primary effect will be to raise unemployment among women. Furthermore, all minimum wage workers make...wait for it...minimum wage, so there is precisely zero wage gap among minimum wage workers. So she's saying that a wage gap among highly-paid professionals should be addressed by raising the minimum wage?
Does she even believe her own words? Does anybody with half a brain take any Obama administration economic policy as anything but a naive leftist ideological joke utterly unhinged from reality?
I'm just so damn tired of hearing these people talk about women in the workforce.
How about having an economist stand up in the White House Press Room to talk about men in the work force, challenges facing men, etc? That would be "sexist" you say? Then how is this not equally sexist? It's just more of the same: the politics of division. This has to stop.
For anybody in or near Denver, I'd like to consider doing business with the first sponsor of the Ross Kaminsky Show on 850 KOA in its new Saturday morning time-slot. Metro Screenworks.
Metro Screenworks repairs and makes new window screens, door screens, and sliding screen doors in a big range of screening and framing materials, including pet screen which stands up to the wear and tear of my dog...the reason I found and went to Metro Screenworks myself well before they got involved in advertising on my show. In fact, it was when I was at the showroom as a customer that I first asked Randy, the owner, about possibly advertising with me.
They made new custom-size sliding screen doors for me in great materials, in a short time, and at a low price. That's what they do for everyone...not just me.
Actually, they did one thing new for me, which they're now offering to everyone: I had a sliding screen door made with a pet door built into it, with the pet door made from their sturdiest stainless steel material. Cost a few bucks more but wow was it worth it. It's standing up to my puppy in a way no other screen door ever did.
So if your window or door or sliding screens are torn or missing or the wrong size, please do me a favor and contact Metro Screenworks and let them earn your business. They earned mine...and I'm a very picky shopper.
You can call them at 303.531.2610 or visit their web site at http://metroscreenworks.com.
Their factory and showroom are at 2795 S. Broadway just south of Yale. It's technically Englewood but basically the south side of Denver, and not far from I-25 or Santa Fe.