Unless you worked in certain sectors of Wall Street, read a Businessweek Q&A last fall, or saw a short news item in the Times on January 14, you probably haven’t heard about the new book coming Monday by Michael Lewis, the author of Moneyball, The Big Short, and The Blind Side.
It’s called Flash Boys, but its actual subject has been not just a mystery but something of a guessing game among journalists, publishers, and finance types. To close readers of Lewisania (and there are very many) it might have been fairly obvious that the book was about high-frequency trading — brokers gaining microsecond advantages on automated exchanges. (The topic was just confirmed via a CBS announcement that Lewis will appear on 60 Minutes this Sunday).
But no one could be absolutely sure, because the book has been, through the entire run of its production cycle, a complete ghost.
Even a couple of friends thought he might only have started the book this past fall (which isn’t true but demonstrates both his stealth and his superhuman reputation). It wasn’t listed in publisher W.W. Norton’s catalog, and though it’ll appear this Sunday on 60 Minutes, today’s Amazon description still reads, blankly, “Michael Lewis returns to the financial world with a new book that gives readers a ringside seat as the biggest story in years prepares to hit Wall Street.” But what story is that — the subject of Flash Boys, or Flash Boys itself? In that Times item, Norton said only that it was “squarely in the realm of Wall Street”; when an image of the U.K. cover leaked in January, it was analyzed by bloggers like a Rosetta stone.
A rushed, stealth publication and an embargo mandated by 60 Minutes are hardly unprecedented, but they’re exceedingly rare when the subject is a long-form work of financial journalism, heavy on hard numbers and colorful personalities, instead of, say, a celebrity tell-all, an account of killing bin Laden, or a trumped-up Benghazi exposé. This is a writer who made his mark with a dishy Salomon Brothers tell-all and his name with a portrait of an innovative baseball manager — compelling stories, but hardly the kind of books that are gobbled up on the Acela the morning of publication. So when did Michael Lewis become Bob Woodward?
While Norton refused to comment on their cloak-and-dagger publication strategy, Michael Lewis himself was happy to chat yesterday by phone, even though the Berkeleian was busy visiting spring training in Arizona with his 7-year-old son. The only thing he wouldn’t talk about was the actual book. “It has a lot of news in it,” he said, while his son vied for his attention by making fart noises with a balloon. “It’s scoopier than most of my narratives.” He started working on the book early in 2013, while researching a story for Vanity Fair about a programmer who was jailed for stealing code from Goldman Sachs. When that piece ran in September, Lewis told Businessweek he was working on a book about what the magazine headlined “the next crisis.”
“I’ve gotten much more reticent about talking about what I’m doing until it’s done,” Lewis says. But he insists, with Southerly self-deprecating charm, that Flash Boys’s “seemingly out-of-nowhere” arrival is “more a function of me handing it in two months before it came out.”
That’s not an accident but a plan, and something only the writer of a string of movie-minted bestsellers — Adam McKay was slated to direct The Big Short just last week — gets to do. “The old model was broken,” Lewis says of his old publishing routine, sounding like the analyst-disruptors he extols in The New New Thing, Moneyball, and the gentler parts of Flash Boys. “They sat on [his first book] Liar’s Poker for nine months before they published it.” Eventually, “I said ‘enough of this, there’s no reason to wait,’” and he started insisting on a two-month window. “I stressed the system,” he says, “and they don’t have the time to stick stuff in catalogs because they’re not sure they’ll have it.”
With Norton, an independent press, the special treatment goes both ways. Lewis says he turned down large advances to remain with his longtime editor, Norton head Starling Lawrence, and for his last two books, he’s taken no book advance at all. “I like the risk,” he says. “Most writers treat their publishers as banks — very expensive banks. Norton is owned by its employees, and I feel sometimes responsible for their financial well-being. When they give me a bunch of money it’s even worse.”
Lewis’s humblebrags are justified; he’d be a star at any house. His books capture Zeitgeists and sometimes anticipate them (from the quant-worshipping Moneyball to the quant-skeptical Flash Boys); he breaks down the huge consequences of arcane practices with a Gladwellian facility that never seems facile; and like Woodward, he’s mastered the art of access. (He even gained unprecedented access to Obama for a deep but very sunny Vanity Fair profile.) Unlike Tom Wolfe, his predecessor in vérité satire, Lewis finds more heroes than villains in even the darkest stories, from the do-gooders of The Blind Side to an Asperger’s sage in The Big Short and Flash Boys’s sharks turned reformers. He’s a publisher’s dream, right down to being so darn nice about his publisher.
Norton’s master plan actually went awry this week, through no fault of its own. Apropos of a book about the ways technology can betray the people it’s meant to serve, Google mistakenly allowed portions of the Flash Boys e-book to leak — not only onto Amazon’s “Look Inside” preview, but to other sites, includingWWNorton.com. “Losing control of their algorithms,” Lewis calls it. Before the excerpts were taken down, interested Wall Street parties were linking to page scans, captioning them with breathless tweets about the uncertain fate of “dark pools” and “latency arbitrage.”
Fueling the speculation about potential consequences — actual news impact — is the serendipitous timing of a government push to regulate high-frequency trades. Last September, New York State Attorney General Eric Schneiderman gave a speech on “Insider Trading 2.0,” a new plague of Wall Street sleaze of which some flash trading is a major part. Last Tuesday, he announced a broad investigation into “this new breed of predatory behavior.” Two days later, the COO of Goldman Sachs wrote a Wall Street Journal op-ed headlined “The Responsible Way to Rein in Super-Fast Trading.” (Flash Boys chalks up Goldman’s support for “fair” flash trading to its mediocre record in executing the sneaky kind.)
It makes you wonder what Lewis and Schneiderman knew about each other’s efforts. Both claim ignorance. Lewis, at any rate, can’t talk about the subject, and a Schneiderman spokesman says, “Although our office has no knowledge of the book beyond what’s been publicly reported,” it will likely “add to the important, increasingly urgent conversation about the unfair advantages provided to some high-frequency traders.”
Lewis is feeling pretty confident. “I think that in this case, I have lighting in a bottle,” he says. The Big Short, his last big exposé of disastrous financial folly, didn’t change the world. Will Flash Boys? “It’s naïve to say yes, but if this doesn’t, I’m done. If this doesn’t actually provoke some interesting behavioral changes, then what’s the point of writing these books? This is my best shot yet.” The same goes for Norton’s strategic reticence, he thinks. “If the book isn’t interesting I think it’ll only work once.”