The same system that once gave us subprime mortgage collateralized debt obligations no investor could possibly truly understand now gave us stock market trades that occurred at fractions of a penny at unsafe speeds using order types that no investor could possibly truly understand.
by Michael Lewis
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In "Flash Boys," Michael Lewis highlights the complexities and risks associated with modern financial systems. He draws a parallel between past financial instruments, like subprime mortgage collateralized debt obligations, which confused investors, and current high-speed stock market trades that happen at incredibly low prices. This evolution demonstrates how technology has transformed trading into something that is often opaque and incomprehensible to the average investor.

The quote underscores a critical concern about the financial industry's trajectory, revealing how innovations, while potentially beneficial, can also lead to new forms of instability and risk. As trading becomes faster and more intricate, it raises questions about transparency and the ability of everyday investors to navigate a landscape that feels increasingly inaccessible and potentially unsafe.

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January 26, 2025

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