You have to wonder how things got so out of whack that there is so much high-frequency trading. I think the answer may be self-evident. The volumes away from HFT have dried up.
I have long held it's because the asset class has simply lost its luster, as people lost too much money during a series of downturns. What this whole issue says is 1.) they haven't come back, and 2). given how important "60 Minutes" is and the splash Michael Lewis' book has made, they aren't coming back. Not if it is rigged.
What's a shame is there really is only one organization I trust to launch a spirited defense of individuals owning stock, and it's the one that used to do it all of the time: the New York Stock Exchange. Its campaigns for smaller investors to own a piece of a company were priceless.
Now it seems the exchange just wants its own fair share of money from high-speed traders.
So you have taken away a principal champion of the market.
What's incredible to me is that despite the amazing run stocks have had, I still get the sense that every year people are even less interested in the market than they were the year before.
And this news sure doesn't help.
I imagine there will always be a cohort who wants in. And when I travel the country, I still talk to younger people who want to own stocks.
But even I, someone who loves the stock market and recognizes all the long-term good it can do for you, know you can't fight someone as important as Michael Lewis saying "It's rigged," and no one of note even bothers to disagree!
It's a shockingly negative moment.
And it isn't getting any better.
