[laughter] i, i have a theory, i have a grand, unified Michael Lewis theory, and i thought that we would start there. I havent heard it, id love to hear it. And im going to, this is going to be i would like to see whether you, whether you get the theory, so im going to give you an opportunity to answer. Youll see. The theory [laughter] the preamble to the theory is that you are principally a moralist. In fact, i believe you are americas leading nonfiction moralist. What do you mean by that . Well, you re someone whocc. And as proof, i would like to point out that in five of your bestsellingj a financial ark. Perfect. [laughter] okay, so, but flash boys is, its the most perfect biblicallal gory of all. Which one is it, do you know . No idea. [laughter] its jesus and the money changers this the temple. Ooh. My Fathers House is a place of prayer, but you have turned it into a den of thieves, jesus said. Flash boys [laughter] [applause] i was looking, i got the book, and i was, like, wheres the biblical epigraph from second matthew, like matthew i, whatever it is, 24. Couldnt find it. You know, what i want to know is why i dont feel better understood than i felt two minutes ago. [laughter] its okay. The you, wait, youre not disputing that there is a deeply moral center to all of yourr[ books . This certainly in this case it is more moralistic, i think, that many of the things ive written. Oh, i think theyre all, i think theyre all moral. Probably, its probably hard to write without thinking,jdtqih some sort of moral sensibility. I, its on the surface more in this book because its on the surface with the characters. A lot of my characters dont feel that way about the world around them. In this case you have, you have a canadian such as yourself who walks into the american finance, and what he finds eventually appalls him because hes canadian. [laughter] and its a, that he is so clearly not just appalled, but he has such a clear sense of right and wrong and whats going on is wrong, and hes going to fix it. Its a little different for me. Its hard to make swing on the page than some ambiguity. Many of my characters have a lot of moral ambiguity about them. He has less than anyone ive ever written. Ill grant that, but you surely arent saying i mean, i find that same, i just explained, i find that same moral centeredness in think of all of your, think of the great, the characters in those five books. Theyre all this some way in opposition to the world around them. Yes, its absolutely true. And they all have a moral position on the world around them. What is billy beans moral position . [laughter] his, well, were going to get to that in a moment. [laughter] he has a moral position, and that is that the moneyball was an argument about privilege, right . On one level. To me, it was a book about privilege. I think of it as a book about value and about, about how i think it is a book about how difficult, how much difficulty markets have placing value on human beings. But billy bean didnt think of it that way. Billy bean could have given a ratskzr ass about things like that. He thought about it as a book of war. His war and the book around him. He budget thinking right and he wasnt thinking right and wrong in a moral way. He was thinking right and wrong like my math is better than your math. I know. But you dont think theres a moral dimension to someone who says we have fundamentally misunderstood peoples true values in the world . I say that. Yeah. He doesnt. But he didnt write the book. Yeah, thats true. [laughter] so, you know, i think it is true that but i dont think this makes me unusual as a writer. No, no. It is true that, i mean, what causes you the pick up, to sit at your machine and type words out in the first place . Its some sense of, like, somethings wrong or the world misperceives something. Yeah. You have a sense of, a view of events that feels at least to you perhaps erroneously fresh, different, and often that view is driven by some moral concern. Thats fair. Im not sure i think im more this way than other people. You think i am . Oh, heavily. Really . But i want to point out, to go back to your characters again, i think theres, i think that if you list them, lee january tuohey, michael bury in big short, billy bean, brad whatever his last name, how do you pronounce his last name . Even maury taylor, they all have, theres a Common Thread that runs through them, dont you think . Um, i said before theyre all in opposition to the world around them. Every one of those people. But the ant, i mean, look, everybodys got a moral position even by default. Take a character like Michael Berry in the big short. Hes someone who goes into finance after he boons medicine abandoned med sane because he realizes i care about people but not really. [laughter] and is souon indifferent that he takes refuge in numbers. Now, i guess thats a moral position, but it isnt what most people think of as a moralistic character. Yeah. But the point is i thought when i read that i found Michael Berry to be very moving. He too. Yeah. I thought it because you did. [laughter] but this is true. Can i interrupt you for a sec . Im trying to find some truth in what you just said. [laughter] im doing my best here. My wheels are spinning. [laughter] there is some truth, its true that, um, i have no interest in writing a book unless, unless i feel something. The bottom of all of them is emotion. Its absolutely true. So i write about often very dry things; baseball statistics, subprime mortgage crisis, High Frequency trading. Who caresc really . I mean, the you had told me if you had told me, if all i knew was that the stock market was rigged and heres how its rigged and, michael, you can go explain how its rigged and no one else knows, im not sure i have that much interest. I care a little bit, but i dont care enough to sit down and write about it. What i cared about, what i care about is that this character walks on, walks into this world, discovers its rigged and how he behaves with, once he has the understanding. The moral choices he makes. No question about it. And that engages my emotions. Thats what causes me to care about the story. So i have to, i have to feel something. Yeah. And its funny, and it is true, i would also say its true that what i feel is quixotic sometimes. I was sitting there watching, i realized when i had my 7yearold on my lap and i was watching the 60 minutes show about the story two sundays ago, and i realized i was crying. I had tears coarsing down my face because i was kind of embarrassed. But i was crying because i could see the character of the main, of the guy i wrote about, brad, on the screen displayed so clearly, and i found that character moving. That causes me to put any effort into this. Were you more moved by his character than some of those previous, some of your previous heroes . I find all of them kind of moving. Yeah. He was i like brave people, and a lot of my characters are brave. He is, i will say this, what he has done is peculiarly brave because hes brought on the wrath of the gods. I mean, he really has, hes gone to war with his own industry in a way billy bean didnt even do until the book came out. Billy was forced into that position by the book with. Brad went to war with the industry all by himself. And so i found and i findc m as ac character, becauseni he t by nature a troublemaker. By nature someone who goes out of his way to antagonize systems. I find him, i find that moving, that he was forced by circumstances to make choices that were really almost unnatural to him, to step outside of a system in which he was quite comfortable personally this response to a moral reaction he had. So hes forced, almost forced into the role, and that once forced into the role, he behaved so bravely. So what i had in mind when i finished this book, i thought to i had this strange feeling that id read this book i just wrote. What is this reminding me of . And it took me a while to put my finger on it, but here you had this character, brad, who had unleashed, who had triggered was sitting in the middle of this great war, and the war was between people with money to invest and the people who were mishandling the money. The middleman and the investors. A war that none of them really wanted in some way but now is happening, he was in the middle. And hes short, very short. And hes in some ways a reluctant middleman in this war, reluctant participant. I thought, oh, my god, ive just written lord of the fringes. [laughter] and i think of him as frodo. Yeah. In a frodolike way. Hes got that situation. And i find his bravery, like frodos what does it say about the difference between you and me that im drawn to the most dramatic story in the new testament, and you think of lord of the rings, . [laughter] you were raised with religion. No, i have much grander aspirations for your imagination than you do. Right . [laughter] i think the lord of the rings is pretty terrific. Actually doesnt reread very well. But i read it the first time, i thought it was pretty terrific. So i think anyway, so what do all these people have this common . Theyre troublemakers this their environment, theyre disruptive in some way or another, they have problems with their environment all of which is very useful this describing the environment. Theyre all characters this situations. In situations. Beyond that what is it about you that is drawn to that specific profile . You know, its funny, malcolm and i have done this once before a long time ago. You wont remember because there were six people in a barnes noble in new york. The blind side came out, and you were perplexed that all my books seemed to be the work of, bp r p ly, someone who has radical hostility towards the world around him, and you couldnt understand because i had rich parents, i was raised by people who loved me look at you with your blond hair. And then im it was what is, where does this hidden neurosis come from, is basically your question. [laughter] and i dont know if i answered you properly at the time, but i dont know if it was a good answer, probably just partly in some way im wired. You know, i dont look the way im wired, but i do think that it helps me as a writer that i grew up in a world that i loved. I grew up in new orleans. And it was a world that was outside in many ways American Culture. And American Culture was clearly hostile to it. It was3z not going to survive American Culture. And a lot of things i valued this that world were crumbling in that world were crumbling before my eyes. So i could see that hi fathers way of life was unsustainable, for example. I think that probably helped. What do you mean by that . I mean do you mean what kind of what was unsustainable about your father . Well, it was unsustainable not to care very much what you did for a living or get your status from your achievements in the world as opposed to just your personal relationships from your family. It was not a success culture. It really people were largely indpirvelt to what other people did to make a living and much more focused on family relationships. And there was kind of an ironic twist or an ironic string in life, a kind of detachment, amusement, a gift for creating the culture had a gift for creating wonderful moments. It wasnt, it was a naturalness about it. I just felt but it was, it was not a successful place. It was a failed place in many ways, and a kid could see that. You could see that, you know, you could see that even the things you loved were not sustainable. So i think it makes you question, makes you question success when something you feel is very successful at a very deep emotional level is by the standards of the world a failure. So thats probably, that probably has something to do with how i approach subjects, but i dont know how much. The answer to the question may be im, actually, basically lazy, and its much easier to write a story about a disruptive story in an environment than it is to do, say, the kind of thing you do where you actually have to think through the idea very clearly from beginning to end. [laughter] i mean, i weve had this conversation before. I maintain what you do is harder c0v yeah. So to tie these two things together, the lewis family motto, i kid you not, when i was growing up my father said on a coat of arms is passed down from generation to generation was this do as little as possible and that unwillingly. [laughter] [applause] wait, theres more. For it is better to receive a slight reprimand than to perform an arduous task. [laughter] and i thought that was serious. I mean, i thought that made total sense to me. [laughter] and so my writing life, it is influenced by that kind of approach. I mean, i dont look for trouble or hard things to do. I look for, i look for things i can to without too much trouble. And i you understand this, youre making no sense whatsoever right now. [laughter] why . You are, first of all, insanely prolific. Yeah, but its not hard. [laughter] that does not make me feel were better, by the way. Once i find a story that engages me and a character and a situation that engages me, its very easy. I mean, i have to spend time with him, which to other people might be onerous. But and i have to kind of learn some things. But if situation and the characters right, the rest often just kind of takes care of itself. And so maybe its just, for me, maybe given my proclivities, maybe its just what i am doing is finding the path of least resistance. Which of your books was the hardest . To write . To write. Probably the new new thing. And its a good way to judge t9n i think back on them, i think almost on olympic dives, you have to have the degree of difficulty as well as the execution. Yeah. And the degree of difficulty was high there because i had a character i knew the reader wasnt going to the whole point of the character is hestg incredibly uncomfortable to be with, that he doesnt the minute you get settled, he unsettles. So he never gives you a place to rest. And its the culture of Silicon Valley embodies in a embodied in a person. Thats are hard to make he doesnt form attachments. Very hard for the reader to form an attachment with him. So that was, i think, probably the hardest. This one and the big short had these Technical Details that were difficult to kind of bring across a bit. Its hard its basically impossible to describe a collateralized debt obligation. [laughter] i mean, nobody, no matter what you do, the best you hope for yeah. Is that you fool people into thinking they understand it. [laughter] and so when they put the book down they say, i got that, and they go tell people they understood it, but they dont really understand it. [laughter] so you have to give up artfully with some things. So that was true in this case. There are some laces where i just hope the reader felt they didnt want the know any more. [laughter] but the, but theyre all, i mean, i find the hard part of these things is structure. Its like what is the way to tell a story, and once you find a way to tell a story, it kind of tends to almost write itself. Uhhuh. And, by the way, which was the easiest . Wives poker because it was just about me. I was so vastly amused by myself too. [laughter] and it never, i mean, i am told this is true. My wife, tabitha, tells me so i write with headphones on, i listen to music, and i will listen to the same song over and over and over on a loop just because it shuts everything out. I wrote an entire chapter of this book to let it go. [laughter] i was like an insane person. I walk the world and i hear that song, i start to write because i got so used to it. [laughter] but liars poker, im told she tells he im cackling with, ic laugh at my own jokes. c [laughter]nrxd and i, and with liars poker, id never written a book. Id written very few magazine pieces. I had no sense thered be actually ay critical reaction to this except we love it. [laughter] so it didnt occur to me to have fears or anxieties. Yeah do you have any fears or anxieties . Of course. What are they . [laughter] well, i think i see, i mean, maybe not as much as some, but i fear the disapproval of others, and, you know, its not nice to get bad reviews. Beyond that, i mean, in my literary life . We have a lot of time. You can want to think about it . [laughter] no, i think could you come up with something . Not really. You know, probably not. Probably not. I dont feel so you have, i think you must be this way too. There are layers of insecurity underneath layers of confidence. At the bottom is confidence. I know at bottom im not really that worried about anything when i write. I dont worry its going to be bad really. I think that if i work hard enough at it, its going to be find, but usually it comes very easily, so i dont even get that far. Be so i dont its problematic, right . Because writers are supposed to be tortured and miserable. Yeah. [laughter] and poor. [laughter] and im none of those. [laughter] im very happy, more or less well adjusted. Plenty rich [laughter] and, you know, i just im at peace with the world around me more or less. So im sorry i cant give you what you need here. [laughter] im not requiring [applause] you know, i find this deeply refreshing. [laughter] our mutual friend, another michael, told me the key to understanding you is that the commencement address you gave at princeton several years ago, which i read this afternoon. Two years ago, yeah. Two years ago, which i read this afternoon. From the pulpit in the church. First time id within in the church, much less the pulpit. And you describe a little bit of what that commencement address was about, and then do you agree that there is something, do you agree that it encapsulates Something Real about the way you see the world . Yes. Central. So you have 12 minutes to address theze from princeton. And i got this nice note from a lady two days later saying charlie was there, my husband charlie was there, and he thought it was really very funny that you didnt remember what he said. [laughter] would you like to come to dinner . So theyve actually become friends. [laughter] so the theme of the speech was the role of luck in life, accident in life. And that the people in the audience, probably even more so than when i was graduating from princeton, think of themselves as deserving, everything that comes to them, because theyve passed through this ruthless merit accuratic filter. Theyve gotten the right scores, the right grades, everybody tells them they deserve to be there. I knew i was there because my father had gone to princeton, so i didnt think i actually even deer deserved to be there. I thought it was a privilege to be there. But because they were programmed the way that theyre programmed now, i thought it was important to tell them how much luck was involved in them being there and how much luck would be involved in whatever happened to them afterwards. And that it wasnt just enough to appreciate their luck, that they owed a debt to the unlucky. And it was a way, what i was doing, was smuggling into princeton, back into princeton the ideology i grew up with which is, you know, its one of those ways to [y redress the inequality in the society for the people who are the elites, to think a little bit about their responsibility to the people who are not rather than just coast on the fact theyre elite. Part of the outrage of the story of this book is elites are doing the opposite. Elites are, instead of taking kind of responsibility for the rest of the society, are scamming it. But [applause] its good to get to know the audience, isnt it . [laughter] kind of know which way theyre going to drift. [laughter] so i think were drifting left in here. [laughter] the, so and the point, and it was true that this theme tied into some of my books. And i mentioned that moneyball yeah. Was, i mean, part of moneyball is the as, the oakland as figuring out how much luck there is in a baseball career and trying to strip out the luck to get to the true value of the player. But how hard that is to do. So i was justing, i was trying to bring that across to them. And im sure theyve forgotten it already. [laughter] i mean, their parents may not have though. [laughter] but its, do you think that idea, i mean, aside from moneyball, has that idea surfaced in i mean, because it is, to go back to my argument about moral themes in your work, there is a constant engagement with this idea of privilege about institutions that have become corrupted with this isnt something i guess when you put it that way, thats true. You mentioned books are about, so moneyball, you think about the privilege is the privilege its the club of the old baseball scouts. But more than that, moneyballs also about arrogance of the rich, the way arrogance has blinded the wealthier clubs. Thats the other half of the puz until that, right . True. How the new york yankees of the world have been his led by their riches. Whats more moral than that argument . We going to spendpv this whoe conversation you proving the point you made in the beginning . [laughter] no, no, no, i dont want to belabor it. Okay, i love bomb you and i cave, and i say, okay, youre absolutely right this is not about me making some, you know, ridiculous argument. God knows i do that enough. [laughter] this is, but, i mean, and then im going to leave it. Years ago when we had our thing on stage for blind side, the other thing i said then and i still believe is that, to me, blind side, i thought the book was mistitled. You made it sound like it was a book about football, and it wasnt a book about football. It was a book about charity, right . Its a book about lee january tuohey i think the book is about all the forces that affect the value of this child at the center. Yeah. And howc the outcomes in ths childs life are so serendipitous. Thats what it is. Its the football season, it all comes back. Thats, the question is structural. Whats this book about . The question is, is why how does this boy go from being the least valued human being on the planet, a homeless, illiterate kid eating out of garbage cans on the streets of memphis to four years later being among those highlyprized 18yearolds onbe the planet . One of those forces is things that have happened in football strategy to elevate the value of what are you so peculiarly, you do so peculiarly well, and then the mother that all of a sudden he had. So it all fit together for me. Youre right, it wasnt just about, obviously, it wasnt just about football. Yeah. I say that, by the way, thats the only i think that book is perfect. There is not a single word out of place. I mean, i love all your weeks, but books, but that is, to me, it will be read 50 years from now. I really believe that. It was hardly read at the time. [laughter] well, yes, you find when you write a book about football that people who like football dont like to read. [laughter] [applause] this is my gu anyway, we will, then it shouldnt, that was my frustration. I worried that people would think it was a football book when i felt that and the few people who do read who like football, they really, really dont want a chick flick in the middle of their football book. [laughter] they dont. So i liked shoving those two things together. But it did miss its market. And the movie, the movie solved that problem, but if the movie hadnt been made, it would be my leastread book. Will yeah. I liked it though. Im with you. I felt very good at the end of it. [laughter] lets talk about this one. I dont know how much i dont have a watch. I dont know how much time we have. [laughter] lets get to the book at least a little bit. [laughter] talk a little bit about the origins of this. Im guessing that, did this grow out of the piece you wrote for van an fair on the ru highspeed Trading Program . oniqok twominute summary of how this came about. E summary of how the russian Computer Programmer caught my eye, and this was in 2009. High frequency Trading Programmer in his early 30s, a russian kid, left Goldman Sachss and mailed himself some code. And a couple of days later the fbi arrested him, and i followed this in the newspapers. A year or so later hes sentenced to seven years in jail. And so the first thing i wondered was why on the back end of this financial crisis that goldman had so much to do with was the only person who went to jail the person Goldman Sachs wanted to go to jail. He was the only goldman employee that went to jail. But the thing that really caught my eye was that when they arrested him, the prosecutor said that this code, he had to be denied bail, couldnt be let back on the streets because this code that he had could be used to manipulate or crash Financial Markets if it was in the wrong hands. And i thought goldmans the right hands . [laughter] ask i couldnt [applause] it was breathtaking. I thought, could it have been in worse hands already . And then this stuff had to do with High Frequency trading which at that time no one had ever heard of. It was a term of art that all of a sudden was in the newspapers ex. It was just computerized trading. So it took he a couple of years to actually come around to doing the story. But when i got into it, i realized i needed a primer on High Frequency trading. And i just called friends on wall street, people who were investors, and i said do you know anybody . They said, very weirdly, theres this canadian guy whos wandering around, and youre not going to believe what he will tell you. And, yes, he knows it hes the only guy whos not an area 51 guy. So i went to find brad, but really just for background for the thing, the magazine piece i was doing about sergei, the russian. And a couple of days into it i realized just with him, i realized that, you know, i was very pleased to be doing a hag zien piece with magazine piece with the russian, but there was a book in this guys experience. And there was a question of persuading him to do it and persuading him to letted me move into his life which i did for a little more than a year. This is a small point. Im wondering whether it has larger i would notice when i was reading the book you return again and again to the question of with each of the, as brad gathersc his confederates aroud him, you over and again return to the question with each of these people about how they were changed by 9 11. Thats true. Three or four times. I feel like theres that and im curious, im guessing thats for a very good will be. So, a, id like to know what that reason, but more broadly, do you think the fact that 9 11 was so much a calamity of the financial district in some way alter the generation . I mean, is it, does it have a kind of material effect on the way people involved in the markets thought about what they did . Is that a point you were making by bringing it up . No, that wasnt the point i was making. But i do think that 9 11 gave wall street cover to behave very badly for a26n long stretch, because all of we were, we shared an enemy with them. And, but that was almost a separate point. The point i was making, one of the things i wanted to kind of get at without actually saying it was, kind of just raise the question why do some people in this environment decide to behave well . Why does someone who sees whats going on in the markets a lot of people knew that the stock market was rigged. Why this canadianfy canadian guy and this group of people that he brings together, why does it bother them more than anybody else . And i think the answer is more complicated than a few of them had traumatic experiences during 9 11. But all of them did have this tendency to have a long view, a perspective on their lives from kind of trying to live their lives the way they wanted to look back on it rather than living their lives looking forward to the next bonus. So they werent as narrowly motivated by money as others. In a couple of cases, i really think 9 11 had a lot to do with that. And so thats why i kept coming back to that. The most specific, the person thats most blunt at it, theres a great hes only in the book for a little bit, but theres a kid who works for brad named josh blackburn, and he was a freshman in college when 9 11 happened, on 9 11. He walked out of college and over to the air force recruitment center. They wouldnt take him for a year, and he ends up, anyway, devoting his life to helping generals map the battlefield in iraq, and when he comes back after seven years, hes traumatized because he cant find anything in the economy, any job for his skill set that feels purpose beful. Purposeful. Hes a computer, a technologist. He got job offers from all the High Frequency trading firms. Hes perfect for them. He goes in and and finds it completely hollow, like he doesnt actually want t to gett of bed every morning until he bumps into brad. So they all had this need for a sense of purpose that was greater than just how well they were doing that day. And so i wanted the reader to have some clues as about why they might be that way, why they were different. Because this this is a question. I mean, its why them, you know . Its really, its odd that the messenger in this case is odd, this canadian guy who really is not in the center of things in the beginning decides that the world needs to know some truth thats going on and ends up i mean, this is the role hes going to play in life he is, essentially, has walked into a place with a advantage can qume of trust a vacuum of trust, and he becomes a source of trust, and everybody trusts him. And the power of that is incredible. But why . Why him . And so thats the, those were ways to prod the reader into thinking along those lines. Uhhuh. Do you, has your own feeling about over the course of say youve returned to you started off writing about wall street, and now youve written about it twice if you include boom rang, three times. Have your feelings about Financial Markets evolved over that time . Are you more outraged now than you were at time of liars poker . Re. Whats changed . What looked like comedy has become tragedy. When i was leaving solomon brothers, i had very mixed feelings. I didnt think i was i thought it was silly. What bothered me then was i had seen just too many young people who really had some other purpose in their lives be diverted into work that wasnt of the money. And i thought that was dumb, and i thought that i could write a book then that would show people what it was, and that they would be, they would demythologize it. Instead, of course, what i did n advertisement for what i did wall street. [laughter] i mean, i did think, i mean, it is amazing. You never know what book youve written until people read it. But, you know, six months after liars poker i had a thousand letters from students at Ohio University that said, dear mr. Lewis, ive read your instruction manual how to get ahead on wall street, and i just want to make sure there were no tips you left out, because i really want to work on wall street. [laughter] so there was enough ambivalence in me, i didnt feel, i didnt feel i was on some i wasnt writing from a moral, it wasnt a moral high ground exactly, it was just a distance, a detachment i had from it. What changed my mind was the financial crisis. I mean, what particularly started to change my mind was when all these places, all these big banks committed suicide. I mean, when they all made all these horrible bets, and they all should have failed or almost all of them should have failed. And i thought, because up to that point i thought i thought a couple of things. I thought they were exposed to Market Forces measure they actually were more than they actually were. But i also thought how peculiar it was that these institutions that suck in the best and the brightest, they can have anybody they want almost, and these people who they suck in are not unselfinterested people. These are very ambitious, you know, people that when brought together, they commit, they were a failure. In the way they were brought together. I thought that was interesting. But i also thought that things that seemed absurd and comic in 1987 or 1988 seemed disastrous now. How much more complex the whole system had gotten so nobody could actually see what was going on inside of it. The consequences for the larger economy, all that. And the kind of steady draining of the soul of the place. Its become much more corporate, much slicker. Soc ive become,cco[jw6vonr, feeling less warm and fuzzy about it. Yeah. And the stories, look, and a lot of times youre just sort of at the mercy of the story that walks in the door. This particular story is so much more black and white than most of the stories ive had to deal with. I mean, it isnt a question of whos right and whos wrong. Theres not, and theres not a lot of middle ground. You have, you have its about a young man figuring out how the stock market works, and he shows you how its rigged. He shows you the predatory activity thats going on. The evidence is incontrovertible, and it shouldnt be going on. And that, he is attacked for delivering the truth. I dont know. So i, it just seemed that, the interesting thing about the story wasnt is this you could read liars poker, and you could obviously say i admire this sort of economic activity, i dont admire this. There was a choice. I dont think you can read this and say i admire this sort of economic activity. Have you i want to make sure, one more question . One more, time for one more . Yeah. Um, i have to go to q a, we have to go to q a. Sure. But before we do, one last bit on this. The reaction to this book has been extraordinary. Were you prepared . Is this what you expected would happen . I did think it was an explosive story. I dont think i could have ever imagined it would be as explosive as it has been, and its played out as theater on tv. In the most extraordinary way. I didnt so i didnt know exactly what to expect. Heres what it had going against it. What it had going against it is its complicated, and the main character is a nice canadian. [laughter] i mean, no offense. [laughter] but, no, when you remember this. At the new republic they used to have a headline, a boring headline competition. And every week readers would submit the most boring headline they could find in the newspapers, and thered be wanier, wed print it. At the end of the year we put all of them in a bucket, and the winner was Worthwhile Canadian Initiative. [laughter] do you remember what came in second . I dont remember what came in second. Second was university of rochester decides not to change name. [laughter]yo so i cant believe ive written a book. Its about a worthc while canadian initiative. So i had that going against me. [laughter] i feel like i deserve some credit for just, for taking a Worthwhile Canadian Initiative and putting it in the middle of my narrative. And im not getting that credit yet, but i will eventually. What i had going for me is that theres a war waiting to happen, and its a war about, over the role of the Financial Sector in our lives. And so theres one moment that a crystallized this whole, the war for me. And it was i was sitting there, i was on tv, but i was just watching it. Cnbc decided the first day the book came out to stage a debate. It wasnt really a debate, it was people shouting at each other. [laughter] i was in one room, you know, in midtown manhattan, and brad is on the New York Stock Exchange sitting beside the head of one of the exchanges thats been rigged by High Frequency traders, thats owned, was created by High Frequency traders and owned by middlemen. And the head of the batts exchange. And this guy proceeded to make an ass of himself. He was a crazy person, screaming and yelling. He was very odd. But the, it was a story i heard after that told me, you know, why this thing so explosive. Apparently, the trading floor, a lot of the trading floors on wall street just stopped. The New York Stock Exchanges stopped when this was going on. Its now the mostwatched show in cnbc history which is, i mean, its the tallest midget, but nevertheless. [laughter] its something, right . And, by the way, i try to get the word midget into every one of my books. [laughter] the first time i used it, people were offended, ive got my back up against the wall about it. [laughter] one more moral there was a midget this that book. [laughter] buto the, one of these trading floors, it was the Goldman Sachs trading floor, theyre all watching. And the guy who tells me the story says were watching, and the guy next to me, an old Goldman Sachs guy, says the angry guy, is it true we own a piece of his exchange . And he goes, yeah. He goes, the little guy, we dont own a piece of his exchange . No, we dont own he goes, were fucked. [laughter] and so wall street, wall street realized, the smart people realize theyre fucked. Theyre on the wrong side of the argument. And its going to change. And so, but what does that mean . That means sucking. I heene, in just the narrow sector of the stock market billions of dollars a year out of wall street. But this model for how a computerized Financial Market works has been grafted onto the Foreign Exchange market and stock markets that if a fair market becomes the model, wall streets screwed. Its all, it only works if theres unfairness. A lot of wall street just vanishes. So youve got at stake huge sums of money and the sense theyre screwed. And once you get that, you get a different sort of reaction from wall street than you get from my previous books. And this is what it feels like in retrospect, not at the time. But in retrospect, what i have been doing is kind of blindly whacking away at a great beast with baseball bat. And liars poker was the first whack, and it didnt really bother the beast very much. I hit it, you know, someplace where its they have beens were not very sensitive. The big short, the second whack, again, doesnt do very much. This time i whacked it in the balls [laughter] and it just, the beast woke up. [laughter] and because i hit it where the moneys made. I mean, the money is going to be taken away, and they know its going to be taken away. And that just erupted. And it erupted in every which way. Football journalists financial journalists, part of the eruption. Anybody whos got a stake in the revenues is disturbed. So that explains the reaction. Yeah. Yeah. [applause] well, thank you, michael. [applause] thank you very much, malcolm. Now we go into the q a part of the evening. Just a quick reminder, questions generally start with a w and h and sometimes a d. They are short. We do not believe in twopart questions, and only malcolm gets to ask followup questions. First question. [laughter] i havent read the book, i saw the 60 minutes piece. Who are these bad guys with these high im sorry, who . Who are they . Who are these bad guys collecting these billions of dollars . I didnt see that in the piece. the so im not going to name names, and i tell you why, because the problem, as unsatisfying as it sounds, is the entire system. The point of take where the scalp happens right now in the market, High Frequency trader is scamming you in the market. Scalping you in the market. And thats the revenues for this system of a lot of unnecessary financial mediation. But the revenues are shared with the exchanges who rig the exchange for the High Frequency traders, and the banks and the Online Brokers who sell, essentially one way or another, the customer stock market orders to the High Frequency traders to trade against. So identifying a single villain is nuts. The minute and at some reputational risk, i kept the names out on the other side. The villain is not named, not a one, because i now know what would have happened. What would have happened is someone would have gotten lynched in the best case. And the problem is if you go and lynch one or two of these High Frequency traders, youre knot attacking the system youre not attacking the system. If you google High Frequency trading, if you really wanted to know who the people are who are the best at scalping you in the market, but thats not, you know, arguably, theyre not the arguably exchanges are the villains because theyve created this environment where they can do it to you, or the banks or the brokers are the villains because theyve sold your information out to them. If you really want to know what you need to know are who are the High Frequency trading firms that care the most about speed. There are some that dont care and there are some that care a lot about speed. The more they care about speed, the more theyre involved this the pad activity. And you can google in the bad activity. And you can google and get the answer. Next question. Michael, thank you so much for being here. Michael, i though youve within very critical of the goliaths of the Financial Service administrations. Who would you say are are the david cans . And davids . And also, what would people like us, what should we do if the stock market is rigged to save for our futures, to save for retirement . Thank you. In the financial system, and its this exchange, Stock Exchange called ix. They built an exchange thats owned by investors. The whole point of it is it crypts an environment where creates an environment where investors are not exposed to the predator. Who else are the davids . Theyre the first, best david because theyve actually created a kind of solution to a rob. And if it works to a problem. If it works, what youve got is a model how you solve other problems, bringing Market Forces to bear in a particular market. Your own money is a different question. Its interesting, because when i say its rigged, theres a systematic scalp that goes on every time a market, an order enters the market. Its a penny, its pennies. Its tiny sums of money. Spread out over the whole market, it adds up to huge sums of money. So its not that youre never going to headache money in the stock market to make money in the stock market. Thats not the point. The point is that the market is, the market is charging, it has found a way to catch you and all investment dollars totally unnecessarily. And its a problem more of a system wide rob than it is a problem for your individual savings. As an investor, you almost should be more concerned about the instability caused by the rigging. Its not the pennies you lose every time you trade in the stock market, its this whole, you know, ac[kc the guys at goln sachs say when they decide they dont want any more to do with High Frequency trading and the current stock market structure, theres going to be a calamity if we dont, if we continue down this path of exchanges making this system ever more complicated for the benefit of High Frequency traders. What can you do . The simple answer is go on a web site that ix has created called i am an investor. Org, and it explains how you can take control of your own stock market orders and create pressure on the bankers and brokers not to sell you out. Its already happening. I mean, its actually its interesting, theres a Political Movement going on in finance right now. In the last week Charles Schwab has come out and said this is a cancer on the industry that needs to be stopped. An Online Brokerage Firm called Interactive Brokers has said theyre now going to allow their customers to send their orders directly into iex. If the orders are moved on to Fair Exchanges and i have no doubt the competition will arise, but whatever the Fair Exchange is, you starve the predator, you starve the beast. So thats what you do, you try to put pressure on whatever Stock Market Investments you have, you try to direct them away from the system. c mr. Lewis, my question is about front running. I wasnt aware that there was such a momentum tuesday of exchanges and [inaudible] reliant upon the [inaudible] so my question is [inaudible] the solution is to create an exchange which disallows front running to happen by slowing the process down. Wouldnt a simple solution be just to have a Single Exchange so that [inaudible] couldnt take place at all . Absolutely. Theres no question about that. And the problem with that is the regulators believe that competition is necessary for the exchanges to stay, to be efficient. And so in the name of competition, theyve encouraged this proliferation. But the fragmentation, actually, doesnt benefit the investor. So, yes, the sensible solution is for the Stock Exchange to be a kind ofyo utility. And we all meet in one place. And that, it could happen. I mean, it could happen. I mean, one path this whole episode may take, the New York Stock Exchange has been trying for several months to buy iax, and theyve iax, theyve already turned down, they all could have been rich already. They turned it down because they cant allow themselves to be sold to the New York Stock Exchange unless the New York Stock Exchange gets rid of all the bad stuff thats going on. Otherwise its not credible. But if the New York Stock Exchange caves and says we will, not only will we buy you, but well get rid of all the High Frequency traders who are in the place, no longer giving them preferential access, youll be the New York Stock Exchange, its easy to imagine exchanges folding, all the businesses going onto the New York Stock Exchange, and we kind of two back to the way the market was structured ages ago. But without human beings in the middle of it. Without the investment orders passing through hands at all. Just buyers and sellers just meeting. So that is, that is the natural solution. So i think you kind of just touched on this a little bit, you know, before i decided to come up here, but i me question was doing to be i need x. I guess up until now how successful have you been at doing that theyre trying to do . I dont know if theres other exchanges, but how successful have they been so far . Well, if you talk to investors whose orders are being directed on the exchange, extremely. All of a sudden, you know, the problem, you know, as it manifests itself to investors is that they think theres a market. They think that in these 13 stock markets today there are 10,000 shares bid for of microsoft at 20 a share, and then they go to do it, and the market somehow anticipates what they want to do and vanishes and goes up. It doesnt happen when they go on to iax. So theyve been very successful in, you know, the measure of how successful theyve been in eliminating the predatory activity is, basically, High Frequency traders dont want to bxr connected to them, because theres no point. But the size of the exchange is still small. I mean, theyre incredibly successful for a new exchange, starting a new Stock Exchange always takes time. Theyre trading, yesterday they traded 65 million shares. A fraction of the stock market. Its enough so that theyre profitable or just about profitable and sustainable. But theres a break, and the break right now is that 70 of the stock market orders in this country are handled by eight banks. Only one of those banks is actually treating the exchange, this exchange honestly. The other seven are doing what they can to avoid sending their orders onto the exchange. And so pressure has to be brought to bear on those banks to start moving orders onto the exchange when their customers ask them to. The one is goldman. The one is goldman, yeah. The other seven are behaving uniformly badly, there are different degrees of badness, but it means that combined with the fact that none until Interactive Brokers did this, one of these online brokage firms are sending their orders either. Theyre starved of activity a bit, but its changing. I heene, the books been out eight days. Theres enormous pressure in the system for people to, if the investors ask for their orders to be directed this way, for them to be directed this way. So its a pretty hopefullooking situation right now. Hi. Thanks for being here. So id like your opinion about what i look at as the 50,000foot view, and that is when you have guys like hank allson who used to run paulson who used to run goldman and then was running the Treasury Department and other former bank guys in government positions, its sort of like the fox in the chickenc coop. Regardless of all the things that are going on with High Frequency traders, if the problems stem at the top and that is the guy that winds up going to jail is some shmuck for seven years and the big guys like Lloyd Blankfein or other goldman execs who are purposely betting against their climates, and]in nobodys going to do anything about it because when these fed guys are finished with job, they wind up working for the banks. Whats to be done . Thinks theyre never going to do anything and goes back to his Canadian Bank and the talk about, why would they be that way . They do a study and find out 250 people have left the fcc to sec to go to work to for the traders. So do you despair . The whole system seems to about riddled. This market is a microcosm of the larger problem. The industry generates so much money that it is captured, not just the regulatory process but the legislative process, and so you could theres no i think futile to look to washington for a solution to the problem. However, we live in a country where people worship entrepreneurship. Love marketbased solutions. Whats so and theyre doing it. So, its now a matter of the rules being enforced more than anything else. Our final question . So, after what you just said i can see why you have some optimism it could get turned around because the individual does have some power. So, therefore, how would you rank this against Something Like the municipal bonds, scams like j. P. Morgan does to places like alabama and stuff where they get no big heres the this is clearly other thing about the story, the piece with the spirit of the age and the Financial Market. Everywhere you look markets are getting rigged. The Foreign Exchange, a Foreign Exchange rigging scandal. Commodity price rigging scandals. Why are market so heavily manipulated by bilawal str [inaudible conversations] tweet us your feed baeck, twitter. Com booktv. Jackie seow what do you do here. The executive art director. What does that mean . Well,cae oversee and artdirt and design the Simon Schuster imprint and many different imprints. Theres all different art for those that i solely do the Simon Schuster. You do the covers of books. Yes. What goes into a cover of a book . Well, the first thing that when we hear about the project, usually from the editor, we find out what the book is about, theres a manuscript or sometimes just a little bit to read and you get a flavor of what the voice of the author is. And from that we kind of have a discussion with the editor, the publisher, and the author, to find out, do they have any preconceived notions of what theyre looking for . And its always good to hear that up front. You get even if they dont, you get a sense of their esthetics, and you can do some research. At the book stores, see what the competition is like, what the books will be facing in that bookshelf space. I want to start with this one. This is a former senator james webb. His new book i heard my country calling. How did this develop . How did this cover develop . Well, this is actually pretty straightforward in that its thd story of his and his fathers years in war, and he had these photographs, and so we knew we wanted to kind of give it a little illustrative look, nostalgic feel so it was marrying the two photos together so that they were cohesive. What went into your madison, five partnerships that built america . A new book. Well, it is madison, so kind of÷ called for having his photo on it. And because of the subtitle, the five partnerships, you kind of need to explain that. What does that mean and who are these five people . So, in this case, it worked out nicely that we had five beautiful portraits of the five people that mattered. One of the other books you worked on, jackie seow, was the bully pull pit, and pulpit, and we all know what the cover looks like. Heres the cover and thats the finished product, but what was this . So, when we first learned about a book and we do a little explore asia as to what the photographs out there, there were great photographs of the two of them together, and so we thought that was a great opportunity to design something with that. But when we started to look at it, it didnt have the big look that we wanted, the epic feel, and you see that typography has the feel the historical feel, but then we started to think maybe it needed to look classic, so we tried some different fonts, tried adding a little color, and so thats how we ended up. Did doris kerns good win have a say . Absolutely. Obviously an author who has worked on their baby, and theyre going to go out on the road selling the book so you want them to be happy. Watch booktvs entire tour of our recent visit to the book publisher simon some shoesster simon and schuster and speak with people two take books from acquisition to publication. Ron capps, a combat veteran and founder orh the veterans writing project, talks about his experiences in several different war zones and the damaging effect that war has had on him. This is about an hour and ten minutes. Hi, folks. Welcome to the half king tonight. Its a pleasure to see so many of you all here. We are absolutely thrilled to be welcoming mr. Ron capps here tonight. He has written just an incredible memoir, and id like to start by thanking Scott Manning of Scott Manning and associates, for brings this one to us, and the s