Scott Patterson

The regulators need to get on top of what's going on and fast. The public is losing trust in the markets and right now our regulators can't give them any assurances that they're wrong. Right now we just don't know and our regulators don't either -- that's why the market is dark.

Good question Mom.

I think there are some good well-intentioned people at the SEC and other regulators. But they're totally outgunned. And the financial incentives just aren't there. If you have the technical ability to understand much of what drives our markets, you're more than likely going to cash in for a multi-million dollar paycheck on Wall Street than work in the SEC. Sure, it's always been like that. But because the market is so technical, so computer-driven now, that our regulators need to have that technological literacy or they can't surveille the market.

Bottom line: The SEC needs to hire more quants and fewer lawyers.

He actually read it! Unlike most of the people who interviewed me. He's even more skeptical of what's going on on Wall Street than me. And I'm pretty damn skeptical.

I'm not surprised that the NYSE went for this because they've been getting taken to the cleaners by the firms that are allowed to do this. So it doesn't really change the overall structure of the market that much. I can say that I was surprised that the SEC approved it. It means more fragmentation--and we already have about 70 venues to trade stocks today. Isn't that enough? Or I mean far far too much?

Well, we don't have much choice to we. But I'm trying to say that the market has changed in many ways, dramatically. This isn't the same market that we've had over the past 80 years.

That is and should be the purpose of the market--to allow companies to raise money so that they can expand (and hire people) and let people get a chunk of their growth and profits. But the market has turned into a casino. And big shock--the computer revolution thas has taken over the market grew out of so-called SOES bandits, day traders riding stocks for short term gains. Check out Dark Pools for the whole story--no one has told it before. It's totally fascinating! (Sorry, had to get in a random book plug....)

Pretty awesome, and smart. His brother Larry Leibowitz, who I know and is a top executive at the New York Stock Exchange, is also a really smart guy--and funny too.

First, thanks for the compliment on the Island chapters--I loved writing about it. Josh Levine (founder of Island) is a fascinating person. Second, I think my book is the best book on the market about modern microstructure that everyday people can read and learn from. So we plainly disagree! It's a controversial topic and if everyone agreed with me it would have been a really boring book.

Greed and fear run the market. But we need strong regulators to keep it in check. But the dramatic technological evolution in the markets in the past decade has left the regulators in the dust. I think they hoped that with the robots in charge they could just sit back and relax--but the robots are at the end of the day doing the bidding of humans. Often very greedy ones.