0:15

Pushkin, Sorry

0:19

to wake you up to do this. No, it's fun, all

0:21

right. So what do you think the stock market

0:23

is? That's my son Walker.

0:26

He's eleven, roughly the same

0:28

age that I was when my father sat me down

0:30

for the talk. My

0:32

father never did actually explain how sex work.

0:35

I think he thought a person just naturally figure that out.

0:38

Money was different. Money

0:40

was something that needed explaining. I

0:44

think the stock market is

0:49

from the way I look at it

0:51

at school. When I board, I

0:53

can just open up the stock market app

0:56

and it tells me how much a business is

0:58

growing and making money. And

1:01

another thing you can do with the stock market

1:04

is you can invest money in

1:06

it. So if the stock market

1:08

grows, then your money

1:10

will grow with it. Very true. Both

1:12

excellent. But how do you open up the stock market

1:14

app at school if you don't have a phone. It's

1:16

an iPad. It's on the

1:19

iPad pro they give us at school.

1:21

Yeah, there's there's this little thing on that I've

1:23

had this stocks and I pressed

1:25

on it and now and then I

1:27

just typed some random I just type

1:29

fart on it and far talks came

1:32

up. So I have that on my front

1:34

page now, fart talks. Yeah,

1:36

far talks. Is that a company?

1:38

Yep, it's called Fart

1:41

Do you spell it? F A R t O

1:44

X FARTF What

1:46

did they do? Let's just check this. It's

1:48

really funny. Yeah,

1:50

and it's been growing, but it has no

1:53

recent story. It looks you know what

1:55

it's. It's not an actual company. It's a complicated

1:58

it's a complicated stock Back

2:01

to the talk. We're at the desk

2:04

in my office. I've pulled up the Charles

2:06

Schwap stock trading page. Now.

2:08

My father just tended me a little black ledger.

2:11

He said it was for me to record my stock market

2:13

holdings. He bought me ten

2:15

shares of a restaurant company called ChartHouse

2:18

because they own Burger King, and I knew what Burger King

2:20

was. Tell me a company

2:22

that you like, or a company who's products

2:24

you really like? Here, just

2:28

a company, any company like? Do you

2:30

like Apple? Do you like? Oh? Yeah? Apple? Apples

2:33

from my favorite. If you own

2:35

a piece of apple, you

2:39

you know, you might like to own it for a while, but if it goes up,

2:41

you might want to sell it. Right where

2:44

do you think you'd go to sell it? You

2:46

kind of need a place where

2:48

everybody who would want to buy shares

2:51

an Apple or any other company, can

2:53

meet up with anybody who

2:55

wants to sell the shares an Apple or

2:57

any other company. Right, so it'd be

2:59

it would be great if it's just one place, and

3:03

it used to be just one place, the New York Stock Exchange.

3:05

That's that's what that's a stock exchange

3:08

is where buyers and sellers come together to

3:11

trade shares. But what if the buyers can't

3:13

afford to fly all the way too, Well,

3:15

that's a very good point. That can then they used to

3:17

do is make a phone call or even before that,

3:19

they send a telegram or even by

3:22

mail, say I want to do this, and

3:24

there'd be someone there for them, and that's

3:27

called a stockbroker.

3:29

It's a really good question because you don't want to Who wants

3:31

to have to fly all the way to New York if you want

3:34

to sell or buy your shares or buy shares?

3:37

But now there's

3:40

no people at the exchange.

3:42

Now it's just computers. Now it's just computers,

3:45

and like all the orders are going into

3:47

computers because you can't persuade

3:49

a computer, can't persuade a computer,

3:52

or you can't cheat a computer. Well,

3:54

that's interesting, how do you What do you

3:56

mean, Well, I mean, unless you can

3:58

hack into it, it's pretty hard to

4:01

cheat your way into getting stock without

4:03

paying anything. It's funny,

4:06

that is. Mine instantly went there. Mine had two

4:08

when I was his age. I looked

4:10

inside the little black ledger, studied

4:12

my ten shares of chart House, worth roughly

4:14

two hundred bucks, this unimaginably

4:17

huge sum, and I noticed

4:19

a line item twenty bucks broker's

4:22

commission. What's a broker's

4:25

commission, I asked my dad. He explained,

4:28

a guy charged twenty bucks just to pick up the

4:30

phone and tell someone to buy the stock. What's

4:33

this guy's name? I asked. I still

4:35

remember this feeling of outrage, the

4:37

sheer unfairness of it all, twenty

4:39

bucks for a phone call. My

4:43

dad told me the stockbroker's name. Then

4:45

I asked where the stockbroker lived, and

4:47

my father told me that too. The guy lived in

4:49

a great, big house a few blocks away

4:52

from us. Then a where he

4:54

looked across my dad's face. Why

4:56

do you want to know where he lives, he asked, because

4:59

I'm gonna go egg his house. I said, because

5:02

that's just what you did to grown ups who behaved badly.

5:04

You egged their houses, which is to say

5:06

that when I first learned how the people inside

5:08

the stock market got themselves paid, I

5:11

was genuinely pissed off. I'm

5:15

Michael Lewis and this is Against

5:17

the Rules, a show about

5:19

the attack on the authority of the referee

5:22

in American life and what that's

5:24

doing to our idea of fairness. And

5:26

we're now at the end of our season, the final

5:29

episode in which

5:31

we try to answer the question why

5:34

on earth would anyone ever

5:37

want to be a referee? Do

5:41

you want to get in front of the battle? You care?

5:43

Yeah, that's good. This

5:46

is where I'm

5:50

in a car outside of Dublin, in

5:52

the village of Dalky. God, it's gloomy.

5:58

Thank you for coming and getting us. God,

6:01

I'm with Am and Ryan. He'd spent his

6:03

career in the nineteen seventies and eighties as

6:05

a civil servant. His job was

6:07

to encourage foreigners to invest in Ireland,

6:09

which back then seemed a hopeless task. In

6:12

nineteen ninety, the Irish government had moved

6:15

him and his family to the United States to

6:17

Greenwich, Connecticut. They were transported

6:19

to what was and is ground

6:22

zero for America's money culture, our

6:25

bond traders and investment bankers

6:27

and hedge fund managers.

6:32

Did you all enjoy living in the States or was

6:34

it the first months were difficult?

6:37

What did you What made it difficult? It

6:41

was the people were a bit

6:43

snooty. Yeah, a

6:45

bit snooty, he says, in case you didn't

6:47

hear it, Well they are, yeah, they're there.

6:50

Yeah. I guess there are places in the States where

6:53

you could have found snoot to your people, but

6:55

not many. I think there farkersies

6:58

number five yeah, yeah, yeah,

7:01

and sometimes they are yeah.

7:04

When the Ryans moved from Ireland, they

7:06

had no errors about anything except maybe the fact

7:08

that they had no heirs. Ireland

7:11

was still a poor country. The Ryans

7:13

weren't fancy and didn't really care to be. They

7:16

weren't inclined to look down on other people or

7:18

look up to them, and were suspicious of anyone

7:20

who did either. In other words, they

7:23

were Irish desired in Jersey.

7:25

What did he play soccer? Yeah, football,

7:28

soccer, yeah, just there on the other

7:30

side, and that's his sister. They

7:35

remained in America four years. They

7:37

sent their sixteen year old son, Ronan to

7:39

Greenwich High School and then on to Fairfield

7:41

University, where Ronan developed a

7:44

secret love for a kind of person his

7:46

parents never fully understood, the

7:48

American money person. Take

7:54

me back to the

7:56

first encounter you ever have with

7:59

the US stock market years

8:03

ago, my junior year in college. They gave us

8:05

tours of the New York Stock Exchange

8:07

floor. This was in nineteen ninety five. That's

8:09

Ronan, and there was literally thousands

8:12

of people pushing and shoving. And at

8:14

the end of the day, when I'm leaving the office AE five, these

8:16

guys had walked out an hour before. It was

8:18

flashy cars. They were wearing their jackets and the

8:20

bars. They were kind of like the cool kids

8:22

post college. So I just I just thought

8:25

it was interesting. Actually more

8:27

than interesting. Ronan wanted to be one of

8:29

them, one of those people on the lucky side

8:31

of America. He had no connections

8:33

and no money and no real reason to think Wall Street

8:35

was waiting for him. And really he

8:38

wasn't much like the Wall Street traders. They

8:41

were big and he was slight. They

8:43

projected confidence and he projected

8:45

doubt. Yet he insisted

8:48

that Wall Street was where he was going to

8:51

himself. That is, he didn't dare whisper any

8:53

of this to his parents or his friends, it would

8:55

have sounded phony. He knew

8:57

his parents would say, going to Wall

8:59

Street, why have you started farting channel number

9:02

five? As Ronan

9:04

approached college graduation, his interest

9:06

in being a stock market trader became

9:08

an obset. He wrote dozens

9:10

of letters to every Wall Street firm,

9:13

even the small ones. He received

9:15

only one reply, a form letter.

9:17

So I graduated in June. My

9:20

parents had already moved back to Ireland. I

9:23

was living with my friend's mother

9:25

on the floor of her apartment, looking for a job, and

9:27

it wasn't going swimmingly well. And then I got

9:29

a call one day from a guy from

9:31

MCI. MCI was a phone

9:33

company. He went to work

9:36

for the phone company, and not

9:38

for the glamorous part of it, And it started

9:40

off as something called a national account support

9:42

consultant. And they shipped me off to

9:44

Atlanta for a couple of weeks and started training me

9:46

on fiber optic gables and the difference between

9:49

glass and copper, and network switches

9:51

and voice and data. And I was just doing

9:53

pagers on people's belts. I was doing

9:56

voice, you know, I was working with travel agents.

9:58

You know. I would go up to some offices in the

10:00

Bronx where they literally had phone

10:02

boots for people who wanted to call home to Columbia

10:05

or El Salvador and couldn't afford to a

10:08

few years later, Ronan moved from the

10:10

phone company to another company called

10:12

Radiance. Radiance was in

10:14

sort of the same business as MCI. It helped

10:16

people to move their data around, Only Radiance

10:19

was helping people who worked with Wall Street traders,

10:22

traders who wanted to speed up their trades in various

10:24

stock markets. In the early

10:27

two thousands, all the stock markets, the

10:29

New York Stock Exchange in NASDAC and the

10:31

others had up and moved out of

10:33

New York City to New Jersey, where

10:35

floor space was cheaper. They

10:37

had also gotten rid of all the human beings

10:39

who worked on their trading floors. The guys

10:42

Ronan had once found so cool. The

10:44

stock markets were now simply stacks

10:46

of computers inside New Jersey data

10:49

centers. The old New York Stock

10:51

Exchange basically became nothing more than

10:53

a stage set for CNBC. One

10:56

day at Radiance, Ronan got a strange

10:58

call from a trader in Kansas City.

11:01

The guy wanted Ronan to figure out why his stock

11:04

market orders were taking so long to

11:06

reach the stock exchanges in New Jersey,

11:09

and it's taking him forty three milliseconds

11:11

round trip for these trades

11:14

to be acknowledged. And I remember my inner

11:16

monologue at the time is I don't even know what the

11:18

hell a millisecond is. But I said, Ted, that

11:20

sounds terrible. I think I can help you. A

11:24

millisecond is one thousandth of a second.

11:27

It takes roughly four hundred milliseconds to blink

11:29

your eye if you do it fast. Ronan

11:32

knew that the guy's biggest problem was that he was in

11:34

Kansas City. Data travels

11:36

at the speed of light, but it still travels.

11:39

The further you are from the stock exchanges, the longer

11:41

it takes for your trades to get to them. So Ronan

11:44

moved the guy's trading machines into a building

11:46

in New Jersey near the stock exchanges

11:48

and dropped his trading time from forty three

11:50

milliseconds to three point nine milliseconds,

11:53

or roughly one hundredth of the time it takes

11:56

you to blink your eye if you do it fast.

11:59

And this guy came up to visit his computer, as

12:01

I guess a few weeks later and he was thrilled.

12:04

And you know, according to what he told me, I was

12:06

trying to ask him, I'm like, what's the value of a millisecond?

12:08

I'm very pleased that you, as my

12:10

client, are happy. I just have no idea why

12:12

you are. And his explanation was

12:15

in the first I believe, he said, the first

12:17

four or five days of trading out of New Jersey,

12:20

same strategy that I was running in Kansas. I've

12:22

made more additional profit than

12:25

to pay for your services for eighteen months.

12:28

Anyway, words soon got out across Wall Street,

12:30

and if you wanted to make your trades go faster, you

12:33

call Ronan Ryan, and Ronan

12:35

was soon helping all these high frequency traders,

12:37

as they were called. Ronan

12:39

had no idea how they were making their money,

12:42

but they would use these mysterious terms

12:44

like sniffing out the whale

12:46

order, and they'd be like, yeah, you know, we

12:48

can see footprints of large

12:50

orders entering the market, and we can you

12:52

know, basically, if we see there's demand of a

12:55

stock because a big pension firm or mutual

12:57

fund is trying to buy it, we can buy it

12:59

ahead of them and sell it back to them. For more, Ronan

13:03

was running these super straight fiber optic

13:05

lines across New Jersey. He

13:07

was scoping out the data centers that housed the exchanges

13:11

to find the shortest paths from the traders

13:13

computers to the stock exchange computers.

13:16

The stock exchanges didn't really understand what

13:18

was going on, at least at first, but

13:20

then high frequency traders started to offer

13:23

the stock exchanges huge sums

13:25

of money for what seemed like absurdly

13:27

small things like a shorter

13:29

cable between the traders computers and the

13:31

stock exchanges computers, and

13:34

they all insisted on having their computers

13:36

inside the same buildings in New Jersey.

13:39

Co location, they called it. The

13:42

stock exchanges became a peculiar kind

13:44

of landlord. Just

13:46

the amount that they charge these co located

13:49

clients to connect them. You pay

13:51

it again into the building and then to get from

13:53

your spot in the building to the exchanges meet

13:55

me point is bananas like. They'll

13:58

charge as much as forty thousand dollars a month for a

14:00

cable. Forty thousand

14:03

dollars a month for a

14:05

cable that you could buy retail for

14:07

two hundred bucks. Ronan

14:09

had no clear idea why these big shots

14:11

were throwing so much money around inside these New

14:14

Jersey data centers, But then neither

14:16

did the data centers. The American

14:18

part of him just sort of went along for the ride.

14:21

Whatever these people were doing must be cool

14:23

and great, just another wonderful aspect

14:25

of American capitalism.

14:28

The Irish part of him began

14:30

to wonder if that was true?

14:39

And what is I X group? Group?

14:43

Is a I

14:47

X is a stock exchange? All

14:50

people have things that set them apart. Would

14:52

set Brad Katziamo apart? Was his refusal

14:55

to be set apart. Ever

14:59

since he was a little kid in the Toronto suburbs,

15:02

people had been telling him that he was special, and

15:04

he'd been refusing to take them too seriously. When

15:07

he was seven, his mom told him he had been identified

15:10

as gifted and offered a spot at a

15:12

special school. Brad

15:14

say he'd rather stay in the normal school with his friends.

15:18

When he was fifteen, he ran a forty

15:20

yard dash in four and a half seconds and

15:22

the track coach told him he could be a star. He

15:25

said he'd rather stay on the football team with his friends.

15:29

At seventeen, he could have gone to

15:31

any university in the world. He chose

15:33

to go to Wilfrid Laurier, west of

15:35

Toronto to stay with his friends.

15:40

Brad never thought much about what he would do for a living,

15:42

but the Royal Bank of Canada found him

15:45

and hired him, and naturally

15:47

told him he was going to be a star. Brad

15:50

had never set foot in the United States, but right after

15:52

nine to eleven RBC sent him

15:54

to Wall Street to run their stock

15:56

trading. He was twenty three years

15:58

old, and so when the two

16:01

thousand and eight financial crisis happened, Brad

16:03

Casiyama was making two million dollars

16:05

a year running US stock market

16:08

trading for the Royal Bank of Canada.

16:10

But by then, at least to him, something

16:13

was feeling very wrong. The

16:16

trouble started with a computer he used

16:18

to trade in the stock market. Up

16:20

until early two thousand and eight, the

16:22

screens on his trading desk had always

16:25

given him real time pictures of the market.

16:28

If he wanted to buy, say, Hewlett Packard stock,

16:31

he checked his computer screens to see how much

16:33

of it was offered. If they said

16:35

ten thousand shares were offered for sale at a certain

16:37

price, Brad could hit a button and buy

16:39

all ten thousand shares. At that price.

16:42

Then one day he couldn't Basically

16:45

my just the computer says, okay, well you didn't buy

16:48

ten thousand, you bought eight thousand, and

16:50

so it

16:52

was bothersome, But you kind

16:54

of tend to rewire your brain to realize

16:56

that tradings computerized.

16:59

It's a fast moving market. Things are happening.

17:01

Maybe someone else wanted to buy Hewlett

17:03

Packard at the same time I wanted to buy it. The

17:06

issue is that by two thousand and eight the problem

17:08

got worse. Instead of buying eighty percent

17:10

of what I saw, I'd get sixty percent. By two thousand

17:12

and nine, instead of getting sixty I'd get forty

17:15

percent of what I saw. So I was missing

17:17

entire chunks of stock, millions

17:20

of dollars worth of stock, of essentially

17:22

just disappearing. Brad

17:25

isn't buying and selling stock just for himself

17:28

or for the Royal Bank of Canada. Mainly,

17:30

he's acting on behalf of big American and Canadian

17:32

pension funds and mutual funds and

17:35

the ordinary people whose money they managed. His

17:38

losses are also their losses,

17:41

and he can't figure out why they're mounting. His

17:44

first thought was it was a computer problem. Maybe

17:47

the buttons on his keyboard didn't work or something.

17:50

The Royal Bank of Canada's geek squad turned

17:52

up at his desk and told him the computer

17:54

buttons work fine. It

17:56

was Brad who was the problem. They said. He

17:59

wasn't pressing the button fast enough, and

18:01

I'd count to five or seven or ten, whatever,

18:04

nothing would happen. Then I'd press the

18:06

button, and then I'd miss shares in the stock with your hires.

18:08

It was very clear that it wasn't

18:11

someone else wanted to buy Hewlett Packard

18:13

because I wanted to buy it, and something

18:15

between me pressing the button and my trade actually

18:17

executing, something was happening, but I

18:19

could never get a real

18:21

answer as to what was happening. Brad

18:25

figured out that whatever was happening had to do with

18:27

the way information had started to travel. By

18:30

two thousand and nine, the stock exchanges were

18:32

in some weird relationship with these new traders,

18:34

these so called high frequency traders.

18:37

But Brad hadn't completely worked out was

18:40

exactly what enabled these guys to know what

18:42

he was doing before he even did it. But

18:45

then he heard about this person who helped make high speed

18:48

traders go faster, An

18:50

Irish guy named Ronan Ryan,

18:53

like people here, Oh, the exchanges are in

18:55

New Jersey. If you don't live in New Jersey, I live in New Jersey.

18:57

I happen to know where Mahwa is. I know where Secaucus

19:00

is. You live in New York. Brad lived

19:02

in New York and the clue where these places wore. And

19:04

these are things that were fairly rudimentary

19:07

to me. Not because I'm smarter than anybody else Wall

19:09

Street, It's just this is the industry that I grew up

19:11

with. Ronan

19:13

explained to Brad what happened when

19:15

he pushed the button to trade that

19:18

instantaneous was not instantaneous.

19:21

The signal Brad sent to buy ten thousand

19:24

shares of Hewlett Packard needed

19:26

to travel from his desk at

19:28

one Liberty Plaza in Lower Manhattan

19:31

out to the data centers scattered across

19:33

the Jersey suburbs, to the New

19:35

stock markets full of server racks

19:38

trading stocks. So one

19:40

press of the button, what I thought was an instantaneous

19:42

action was actually a series of action that happened

19:45

over the course of many milliseconds.

19:47

High speed traders were able to buy technology

19:51

and data from the exchanges to pick

19:54

up a signal at one exchange and

19:56

race me while my order is in flight

19:58

to the other exchanges to do

20:01

one of two things. One, they wanted to cancel

20:03

any sell orders they had out there because here comes a big

20:05

buyer. I don't want to sell any more because I know there's a buyer coming.

20:07

But two, to actually buy stock ahead of

20:09

me to sell back to me at a higher

20:12

price. It's called front

20:14

running. It's not really about being an investor

20:16

yourself. It's about finding out what

20:18

real investors are about to buy

20:21

and buying it before they do so

20:23

you can sell it to them for a higher price. You're

20:26

only buying because you know I want

20:28

to buy, and

20:30

you're buying not to own shares in a

20:32

company that you think is going to help you know,

20:35

you know develop, you know, an investment return

20:37

because you understand their business model. No, you're buying it

20:39

just to flip it back to me because you know I want to buy it. So

20:43

Brad figures all this out with a lot of help

20:45

from Ronan, after which Brad

20:47

takes a long look at this guy, this

20:50

oddly wary irishman. Ronan

20:52

still longed to be a big shot Wall Street

20:55

stock Market trader, and Brad

20:57

decided to make him one. Inside

20:59

of a year, Ronan was earning

21:02

more than a million bucks. Brad

21:08

builds this team of people inside the Royal

21:10

Bank of Canada. The team

21:12

consists mostly of immigrants who

21:14

are running tests on the American stock

21:16

market to see how to unrig

21:18

it, to see if they can make

21:20

it impossible for their own stock market orders

21:23

to be front run. So they try this.

21:25

Instead of sending one signal to the four New

21:27

Jersey centers, they send four

21:29

different signals, so they all

21:32

arrive at the four different centers

21:34

at precisely the same moment each

21:36

signal was in order to buy. However, many

21:39

Hewlett Packard or whatever shares were for

21:41

sale in just that data center,

21:45

and just like that, the whole problem vanished,

21:48

at least for RBC. Brad

21:50

was once again able to buy all the shares

21:52

for sale on his trading screen without

21:55

being scalped, without electronic

21:57

frontrunners in the middle of his trade. But

22:00

the problem still bothered Brad because it

22:02

was so obviously outrageously

22:04

unfair. The US government

22:06

had granted licenses to these stock changes

22:09

on the condition that they referee the stock

22:12

market. Winners and losers are no longer determined

22:15

solely based on who understands a company better

22:17

and fundamentals. It's now based on how

22:20

long my cable is and do

22:22

I use microwave versus fiber optic cable.

22:25

We've talked about this sort of thing before in this podcast.

22:29

It happened with CEO pay consultants

22:31

and the ratings agencies and art connoisseurs

22:34

and probably all kinds of other referees.

22:37

The ref got bought. In this

22:39

case, the refs are the stock exchanges. They

22:42

were now providing a slow picture of the stock

22:44

market to ordinary investors while

22:46

selling a faster picture of that same market

22:49

to a select group of high speed traders.

22:52

That is like finding out the

22:54

umpire makes more from selling things to

22:56

one of the teams than they do from umpiring

22:59

the game. One thing a lot of people don't

23:01

realize is that right now

23:03

New York Stock Exchange in AzaC, they make

23:05

more money selling high speed data and technology

23:07

than they do from matching buyers and sellers.

23:14

Back in twenty fifteen, I wrote

23:16

a book called Flashboys about

23:18

Brad and Ronan and the problem of high

23:21

frequency trading. Because I was as outraged

23:23

as I had been as a kid when

23:25

my father tried to explain to me that some stockbroker

23:28

had charged twenty bucks to make a phone call, and

23:31

I wanted to egg his house. And I

23:33

assumed that any right thinking person

23:35

would share my outrage. This

23:40

is what's weird. The computers

23:42

aren't in one place anymore. They're

23:45

they're all in New Jersey, right outside of

23:47

New York City. But they're in like four

23:50

or five different places in New Jersey. So

23:52

you see what it says that ap

23:58

that it's called their ticker, and we say

24:00

buy let's say we want to buy one share, we

24:03

want to buy it. Let's buy ten shares? Okay,

24:05

all right, isn't that a lot? You're right with that? Yeah?

24:09

Um, this is gonna how are you get into college?

24:13

It's going to pay my college could if

24:15

it goes up a lot? You

24:17

want to click it? You can do it. Yeah, you sit

24:19

in my chair. So what you do is you go place

24:22

order Place order. That's it, place

24:24

order. So what does it say. It says right now, it says

24:26

your estimated total amount is one nine

24:30

dollars fifty five cents, and you go down the

24:32

air place order do

24:34

it. Yeah, so

24:39

they're not allowed to buy in the night. It's

24:41

closed at night. Oh, so

24:44

people are gonna breaks. People have so people

24:46

can have breaks, and the computers, I would

24:48

bet and the computers need to break

24:50

too. They probably do. Now

24:53

I hit him with it right between

24:55

the eyes, the brutal facts

24:58

of life. I

25:00

explained that when he bought his first Apple shares,

25:03

these other computers get to see what he's doing

25:05

before anyone else, Like there are

25:07

people out there who get to live in the few milliseconds

25:10

ahead of us. This

25:13

is the funny thing about the start man. I'm trying to explain to you,

25:16

is that you think about You

25:18

understand why stocks exist, You understand why

25:20

people would want to buy them and sell them.

25:24

But it's harder to understand why anybody needs

25:27

to sit in the middle between the people who

25:29

would buy and sell and be given

25:32

different information from everybody else, better

25:34

information so they can make money off

25:36

the people who want to buy and sell. The

25:39

reason all this happens is it happens

25:42

so fast that nobody sees

25:44

it. These signals move at the speed of light,

25:47

which is the second fastest

25:49

thing. What's the first fastest thing? Thought?

25:53

Thought that

25:57

threw me for a second. I mean, is it

25:59

true? Do thoughts move faster

26:01

than light? Did I just prove that

26:04

they don't? I honestly don't

26:06

know or if it matters. But then I realized

26:09

he didn't pick up on what I was trying to tell

26:11

him. Let's see what we got it for. We

26:13

got it one hundred and fifty

26:17

dollars and forty five cents. Actually

26:21

it's even smaller. See one hundred fifty forty

26:23

five point four cents. That's

26:25

what we paid for the stock. Someone's

26:29

computer in the one of the exchanges in New Jersey

26:31

was looking at it and seeing

26:34

that Apple was below that, and

26:36

ah, I can buy it cheaper

26:39

and sell it to that kid in Berkeley,

26:42

California and steal a few pennies from

26:44

him. It is

26:46

not illegal for kids to buy stock, but

26:49

their parents have to do it for them. That's

26:51

correct, So we didn't break

26:53

the law technically, I clicked

26:55

the button. So what we'll never do is

26:57

buy stock drunk. Yeah, it's illegal

26:59

for kids to buy to stock drunk, so

27:02

never trade stocks while drinking. Even

27:06

an eleven year old senses that with all

27:08

this money lying around, there must be laws

27:10

involved here, and there are.

27:13

He's required by a law to send his

27:15

order to a stock exchange through a

27:17

stockbroker, and that stockbroker

27:20

gets paid by the exchanges for

27:22

those orders, so the stockbroker

27:24

is in on the game too. The game

27:27

is to maximize the kill of the high speed traders

27:29

so that they can afford to pay the stock exchanges,

27:32

and the stock exchanges can in turn pay the stockbrokers.

27:36

Everyone in the middle takes a bite out of the prey.

27:39

The prey is us, and

27:43

it's all legal because the people who

27:45

make the laws screwed up and they're

27:47

only now beginning to admit it. The

27:52

parent company that owns the New York Stock Exchange

27:55

is among the few most profitable companies

27:57

in the United States, which

27:59

is astonishing if you think about it, because their business

28:02

is simply the exchange of financial

28:04

instruments rather than the creation of anything

28:06

real. That's Robert Jackson,

28:09

who in twenty seventeen was named

28:11

one of the five commissioners that the Securities in Exchange

28:14

Commission it's supposed to oversee

28:16

the stock exchanges. Think of it as

28:18

the referees. Referee. I

28:20

totally understand why a car manufacturer

28:23

might be or why an incredibly innovative

28:25

internet company might be, but the idea

28:27

that the place you go to make investments

28:30

is the most profitable business in America

28:32

tells me that something's wrong. Can you

28:34

think of any analogy to this situation

28:36

where you've got the companies that are

28:38

responsible for both providing this public

28:42

good, this public service, or this public

28:44

information and are

28:46

also competing with it in the private

28:49

sector. I can't, And

28:51

that just shows how backward

28:53

our system for stock markets are. I can think of lots

28:55

of examples in the American economy and in our history

28:58

where we've had a publicly provided good and

29:00

a privately provided good, and sometimes

29:02

that you even compete with each other. It would be an

29:04

example of that. So there's

29:07

public transportation that's available in the subway, and there's

29:09

privately available substitutes. But this

29:11

is a little like letting Uber run the subway

29:14

and being surprised that the subway sucks,

29:17

yeah, Or like having Barnes and Noble run

29:19

the library. That's right, and then it's acting

29:21

surprised when you get to the library and you realize

29:24

it doesn't have that many books. Let's

29:26

talk just a little bit about

29:29

what it says about fairness in the American

29:31

economy that this has been allowed to happen. Do

29:34

you worry about that subject at all? Here's what I

29:36

worry about that if we stop somebody

29:38

on the street and said, hey, here's what happens

29:41

when you buy and sell a share of stock. It's

29:43

not that it goes to some

29:45

central place where people figure out what

29:47

the price should be and then give you the best

29:49

price possible. No, no, no. This order

29:51

bounces around data centers in northern New

29:53

Jersey and then is routed to one of twelve

29:56

exchanges, where the guy who you

29:58

gave the order too is paid best to send

30:00

it there, and then you're given a price that's

30:02

probably reflective of a second class

30:05

quality of data. If we told that to somebody,

30:08

I think they'd be out But

30:10

would they I mean, would they really be that

30:13

outraged? I just want to know how

30:15

this makes you feel. Some guy has

30:18

got a penny or two, maybe

30:20

just a fraction of a penny. Well,

30:23

it's probably a penny or two of your

30:25

money because

30:29

the stock exchange told him a walker's

30:31

coming to buy apple stock. You

30:34

can go see if you can get it cheaper and

30:37

sell it to him. You can stand

30:39

in the middle of his trade. You can get

30:41

between him and the person who's actually trying to sell the stock

30:44

and make money. You feel

30:47

our care about that? I don't

30:49

really care. Why not, because

30:52

the original order we placed we

30:54

got we that's that was our

30:56

choice right to place it, and

30:59

if we were willing to do that, it

31:02

really shouldn't have mattered. It

31:06

was true. He really didn't care. It

31:08

was just a few pennies and it wasn't even really his money.

31:12

He didn't even care when I told him that if you added it

31:14

up across the entire market, the

31:16

theft from all the little kids and grown ups,

31:18

it came to many billions of dollars a year.

31:21

He didn't care that the cost was spread across

31:23

millions of victims while the benefits

31:25

were concentrated in the hands of the rich few.

31:29

I obviously found the situation outrageous.

31:32

My son did not. It's

31:34

like the lottery. You're happy when if

31:37

you win it and just stick with that, and

31:39

you don't really care about where the lottery is fair

31:41

enough if you want, and if you lose, you just let go. Well,

31:44

well, if people are really addicted

31:46

to it and they know if that they're gonna lose,

31:49

but if they win, they're like Hallie Ella's go

31:51

home, let's go. It

31:54

crossed my mind, and not for the first

31:56

time that about the best joke

31:58

life might play on me is

32:00

from my son to end up a Wall Street trader.

32:03

He already seems to have a useful character

32:05

trait, a sense that the game is not about

32:07

right and wrong, but about winning and losing a

32:10

certain shall we say, lack

32:12

of interest in the moral question. Hi,

32:21

I'm Beth. I'm a senior studying social

32:24

studies with a focus on Brazil, and I'm

32:26

from Sacramento, and I'll be returning to Bank

32:28

of America in a sales rolera.

32:31

I'm a senior at the College I studying math and

32:33

computer science, and I'll be returning to Goldman

32:36

in a trading role. We're

32:39

at Harvard in a seminar mainly

32:42

juniors and seniors. Anyway, they're

32:44

all older than eleven years old and

32:46

supposedly interested in fairness, since

32:49

that's what the class is about. My

32:51

name is Michael Sandel, and I

32:53

teach political philosophy at Harvard University.

32:56

He teaches a course called Justice. It's

32:59

one of the most sought after courses at Harvard.

33:01

This seminar, called Casino Capitalism,

33:04

is its first cousins. Oh,

33:07

Vinnie, all right, we'll wait till three.

33:10

Is this Vinnie? Yeah,

33:14

welcome Vini. It's a chance

33:16

for thirteen hand picked students to

33:18

discuss the fairness of a lot of real world situations,

33:21

especially real world situations on Wall Street.

33:24

Many of the students have already worked on Wall Street and

33:26

planned to return. Well,

33:29

why don't we begin. I'm

33:31

delighted that Michael Lewis

33:34

and Brad katzi im I could join us for

33:36

the discussion of Flashboys. Shall

33:39

we go around you? Yeah? So, I'm Michael Lewis. I'm

33:41

the author of Flashboys and a bunch

33:43

of other books and working

33:45

on this podcast, which gonna be called

33:47

Against the Rules. I remember classes

33:50

like this, the semi preparedness,

33:53

the homework half done, the

33:55

thoughts half baked, the

33:57

warrior that today I'm going to be found out. Although

34:00

today that's not the problem. I'm

34:02

the homework. So is Brad.

34:05

Brad Katsiamma. I'm CEO,

34:08

one of the co founders of IX. Obviously,

34:11

I work in finance. That's

34:13

fortunately or unfortunately, originally

34:16

Canadian from just outside of Toronto, living

34:19

Darren, Connecticut. Now, after

34:21

Brad figured out how the stock market got rigged,

34:23

He set out to fix it. He quit

34:25

his two million dollars a year job as the head

34:27

of stock market trading at the Royal Bank of Canada.

34:30

He took no pay and lots of abuse

34:32

from Wall Street as he set out to

34:34

create a fair stock exchange,

34:37

the Investors Exchange. He called it I

34:40

e X. What's

34:42

interesting is that never in my life have I been a controversial

34:46

person or looking

34:48

to fight against

34:51

the system. I guess in a way,

34:54

that was the first time I think I was motivated to fight against

34:56

the system. Did everyone

34:59

come away from reading the book believing

35:01

that Wall Street is rigged? Yes,

35:04

say, rate your handed. You did

35:07

all but a few hands go up. And those

35:10

of you who who do

35:12

not think it's trigged, Kade Marius

35:16

Shara is not sure. That's

35:18

how you don't think it's rigged, even

35:21

having read Flash Boys, Well, I'm so

35:23

here. I'm a little like vacillating, only

35:25

for the fact that maybe, like I didn't understand it

35:27

as well as I could have. But in my mind, it

35:29

seems to be like a trade

35:32

gets executed. Someone catches on the trade

35:34

and just gets to make a better price because they

35:36

get to dump it out. Real quickly, and in my

35:38

mind, why is that a problem? A moral

35:40

problem? I mean, when Lebron James goes

35:42

to dunk a basketball and Jalen Brown

35:45

stops him and then passes it to Tatum

35:47

on the other side and he dunks it, no one says anything.

35:49

It kind of sounds like to me, this is the same thing. You

35:52

gotta love him just for giving it a whirl, but

35:55

most everyone else seems to disagree with him.

35:58

The Dutch student Marius is

36:00

the only one who expresses anything like

36:02

outrage at Bay. I think

36:04

what I found very surprising is when you talk with

36:06

traders that had been active in the fifties sixteen

36:09

seventies, when they were still like runners around

36:11

and phone calls, everyone will say,

36:14

yes, there was also a use of arbitrage, and

36:16

there was people like taking their

36:18

bit out of the market, but it was clear, it's

36:20

clear for everyone that was an illegal action,

36:22

and it was kind of still frowned upon but

36:25

tolerated. But I feel like in this book it

36:27

sounds like the same thing as happening

36:29

only on an institutionalized scale

36:32

with those high frequency traders. But yet

36:34

still it's not illegal, or it's not really frowned

36:37

upon. Or not properly regulated.

36:39

I feel like there's like a moral decay

36:41

from back then to appear even though

36:43

the whole problem has increased in scale.

36:51

It's a great point because I think people

36:54

are willing to do things behind a computer screen they

36:56

might not be willing to do in person. And

36:59

I think because you don't have that interface

37:02

with the person that, let's say you're taking advantage of

37:04

it kind of lets you tell yourself a lot

37:06

of lies about what you do when you

37:09

are not getting that direct feedback. Morally,

37:11

the story Brad tells is as black and

37:14

white as it gets. The students see

37:16

that, they argue some about

37:18

who deserves the most blame for the situation.

37:20

Who's the biggest villain, the high speed

37:22

traders, the people like Ronan Ryan

37:25

who wants helped the high speed traders, or

37:27

maybe it's the SEC. Brad

37:29

says, none of the above. It's

37:32

like sitting in a casino with a broken slot

37:34

machine. You know, either person that puts your hand

37:36

up and says it's broken, or do you drain it of all it's

37:38

you know, you know money, it's

37:42

you know they're capitalists. But the exchange

37:44

is I think broke the

37:46

system on purpose to make money by selling

37:48

people, the ability to take advantage

37:51

of that system,

37:55

the fact that they're villains on Wall Street,

37:58

Well, that turns out to be not all that interesting. At

38:00

Harvard, the students know too much to

38:02

be upset. They've long since

38:05

adapted to this world. They don't want

38:07

to talk about corruption of the refs, or the

38:09

elaborate system of bribes and kickbacks,

38:11

or what it all says about modern life.

38:14

They want to talk about the person who strikes them as

38:16

the freak of the story. Brad

38:18

katze Yama, a student named

38:21

Keller, kind of puts his finger on it. I

38:23

think it's extremely impressive that you guys were able

38:25

to figure out the problem and then march right against

38:28

it. You guys were able to say no to the broken slot

38:30

machine. It would have been very easy to make a lot

38:32

of money understanding the

38:34

market this way. But and

38:36

then he says the pronoun he referring to you

38:39

just chose not to. And so I was wondering,

38:42

you know, like why and

38:44

how? Because I know and even

38:46

with my positions about finance, I think it would

38:48

have been extremely difficult for me to walk away from a

38:51

broken slot machine that was paying out. So

38:53

heavily. Yeah,

38:56

Michael and I obviously talked a lot about this. Of

38:59

course we had, because he begs the question

39:02

why you Why would any

39:04

big time Wall Street trader rebel against

39:06

his industry? Why would anyone

39:08

quit him multimillion dollar job to

39:11

become a referee? Have you

39:13

come away from this experience thinking that maybe

39:15

you care more about fairness than a lot of people.

39:18

I think this is a complicated subject, and

39:22

we're fighting a system who are trying

39:24

to confuse people into thinking

39:26

the world works one way, and we're trying

39:29

to explain it in a different way. And

39:31

to figure out who's right or wrong, you

39:33

have to put in the work to

39:35

actually understand the details

39:37

to come to the conclusion that the

39:39

market is not fair. And

39:42

so I don't think it's necessarily I care

39:44

more about fairness than others. I

39:46

think it's I've put in the work to understand

39:48

what's fair or not. Brad

39:51

katsa Yama is great at explaining things.

39:53

The one thing he can't seem to explain is

39:56

himself. Good people

39:58

don't like to explain to you why they're good people,

40:00

So that these questions he will

40:02

not I could promise you he will never answer this question

40:05

to your satisfaction. No,

40:07

he actually won't because because he's not

40:09

righteous. He's not self righteous. He's actually

40:12

just a great guy. And the people who

40:14

follow him follow him because they sense

40:16

that he's thinking more about

40:18

their well being than his own. And it's

40:20

a it's a rare quality. I associate

40:22

it with being a Canadian. So

40:26

the simple answer is he's just a Canadian. And

40:28

then if he was an American, there's no chance he would

40:30

have ever done any of this. If I were you, I wouldn't

40:32

say a word brat. But

40:36

you know what, even as I said it, I

40:38

realized I was wrong or anyway

40:40

that I'd let my mind come to rest before it should.

40:43

But you know, it's was peculiar about

40:45

your situation and character was It's

40:47

it's odd to find someone get as

40:49

deep into Wall Street as you got

40:52

before experiencing extreme moral

40:55

revulsion. So

40:57

it's the combination of the

40:59

power of the feeling you had and how far into

41:02

it you were when you had it

41:04

that the kind of person who's going to be you

41:06

got a long way into it before

41:09

they offended your sensibilities, and then they offended

41:11

it in a big way. Yeah, So that that's actually that's

41:13

a fair point. So this is the piece where you

41:16

know, I don't use this as a

41:18

place to try to take the moral high ground because

41:20

I did tolerate a lot of stuff. I

41:22

saw a lot of stuff that I just did not think

41:24

was good. Um, and I

41:26

just I just like looked

41:28

at it. That's really screwed up, and I moved

41:31

on. So what was it about this

41:33

particular situation that led

41:35

him to turn his back on money and

41:37

risk it all to make the world fair. Brad's

41:40

decision was hard for the Harvard students

41:42

to understand. Ronan

41:45

Ryan's would have been utterly incomprehensible.

41:49

It's right, it's right that it's in this building.

41:52

They and the Hey, they have direct

41:55

fiber optic connections to

41:57

every NBA arena from

41:59

here. Uh. Crazy, it is crazy,

42:02

and it's right. It's right. And see see the NBA

42:04

logo. Oh yeah,

42:06

that's funny. Because you know the lady who wanted me to meet you like

42:14

this, nobody shoot them. The NBA

42:16

Replay Center is where this podcast began.

42:20

It's also just down the road from where

42:22

Ronan's career collided with Wall Street. The

42:25

whole area looks as if it's waiting for someone to

42:27

replace the rock on top of it that they wish they'd

42:30

never removed. But a lot

42:32

happens here. Let's see, wonder

42:34

can we just pull in here? There

42:36

you go. It

42:39

takes us five minutes to drive from the replay

42:41

center to the first Wall Street data center

42:43

where Ronan worked for Radiance. It

42:45

could be a self storage facility except

42:48

for one thing. There's

42:51

a tower on top festooned

42:53

with satellite dishes. Look where we're

42:55

sitting right now, Michael. We're in a crappy park lot

42:58

across the street from one of the most important

43:00

capital market building on the globe. On

43:02

the globe, you just wouldn't picture

43:05

the epitome of markets being here. It's

43:07

it's a very curious situation. And

43:10

if CNBC was being honest, they

43:12

just have a camera on that building the

43:14

whole time while they're talking about what's going on

43:17

in the stock market. Yeah, yeah, because that's where

43:19

it is. Yeah, eight trillion dollars

43:21

of stocks traded inside

43:23

this place in the last year, and

43:26

it would occur to no one to visit it to watch.

43:29

You know, you look up. You just take for granted the massive

43:32

number of wires and power cables and all the

43:34

way stuff, and you don't never ask what the hell they are.

43:37

All of those towers up there

43:39

are microwave towers. You have to

43:41

pay them from a cable from your computers up

43:44

onto the roof, and they sell you roof rights

43:46

and roof rights basically means they'll bolt

43:48

on your satellite dish, your your microwave

43:50

dish. Yeah. Ronan

43:56

taught Brad about all this new technology

43:58

inside the stock market, and

44:00

he did it so well that Brad created a stock

44:02

exchange that might put the entire racket

44:05

out of business. Brad

44:07

taught Ronan how to trade stocks so

44:09

well that when Brad ditched his job, the

44:12

Royal Bank of Canada wanted Ronan to replace

44:14

him, which is to say that Ronan

44:16

Ryan, finally, after fifteen years,

44:19

got the job offer he had dreamed of that,

44:22

a big shot Wall Street trader making

44:25

millions of dollars a year. But

44:28

when Brad left to start I e X, Ronan

44:30

left with him to build the fair exchange,

44:33

to create the honest ref And they

44:35

didn't do it in the American way by

44:38

getting outraged or appealing to a higher

44:40

authority or electing a crazy person.

44:42

They just did an end run around the whole problem

44:45

of high frequency trading. Inside

44:51

the same Bland, New Jersey warehouse,

44:54

I e X coiled miles of fiber

44:56

optic cable and stuck it in

44:58

a box. Then they announced that

45:00

anyone who traded on I ex would

45:03

have to send their orders through this box. The

45:05

magic shoe box. Ronan called it.

45:09

It's slowed down the high speed traders just enough.

45:12

Explain in the simplest way that you could

45:14

resume mom could explain what the speed bump

45:17

does. It's literally coiled cable, thirty

45:19

eight miles of cable, which takes the

45:21

light signal three hundred and fifty millions of

45:23

a second to go around it. So we're not talking about

45:25

slowing things down dramatically. But

45:28

what that allows us to do as an exchange

45:30

is it gives us the exchange the clearest

45:32

picture on what's going on in the market, whereas

45:35

other exchanges, because they're slower

45:37

than the people trading on their market, they're printing

45:39

trades without a clear picture of what's

45:42

going on. The magic

45:44

shoebox is a machine for slowing things

45:47

down in a speeded up world, an

45:49

engine of fairness. There's been

45:51

a bunch of studies about its effects. It

45:53

saves investors somewhere between one and twelve

45:56

basis points. A basis point is

45:58

one hundredth of a percent, which

46:00

sounds like a tiny amount, right, But

46:02

across the American stock market, each

46:04

basis point comes to seven billion

46:06

dollars a year. If

46:09

the entire stock market traded on IX,

46:12

investors would be spared being ripped off

46:14

somewhere between seven and eighty four

46:17

billion dollars a year. This shit

46:19

adds up in Jersey. The

46:26

skimming of the American investor isn't

46:28

a street mugging. It's fantastically

46:31

complicated and at bottom a

46:33

little boring. There was no

46:35

reason Ronan had to leave his dream job

46:37

to step in between Wall Street and

46:39

its investors and say stop,

46:42

you're not doing this anymore. I think

46:44

had I not worked at RBC for a couple of years,

46:46

I might have thought this was a great business opportunity.

46:49

But the level of full of shitness

46:51

on the people that we were meeting was just making

46:54

me more and more angry. So it

46:56

was more like a challenge to make this fair because people

46:58

What was most annoying is people are saying it's already

47:01

fair. Nothing to see here, Ronan

47:03

could have walked away from his middle class Irish

47:05

self and acquired whatever he wanted,

47:07

including airs. Instead, he flew

47:10

to Ireland. His

47:12

parents still had no real idea what their son

47:14

did for a limit, but

47:16

he wanted to talk to them about it because

47:18

somehow they were still important to him. Their

47:21

voices were still in his head,

47:27

hanging over a chair, maybe he said, okay, okay,

47:29

that's why I'd gone to visit Ronan's

47:31

mom and dad just outside of Dublin, in

47:34

the village of Dalkey, to hear their

47:36

voices. What

47:38

did you think when he told you was making a million dollars a

47:40

year? Holy shit,

47:44

No, it's hard to believe, you

47:47

know, I couldn't kind of think. You

47:50

know, they're saying every

47:52

business deal there are two people. There's

47:54

a Funk and Fucky and

47:56

a new Ronan could be the funker, you

47:59

know, so

48:04

that's see. Yeah, how

48:06

do it feeling? How it feeling about him?

48:10

And then, in the same breath that Ronan revealed

48:12

his new Wall Street power and wealth, he

48:14

confessed that he was thinking of walking away from it all,

48:17

plus tossing a match over his shoulder to burn

48:20

the place down in a way that would

48:22

make it virtually impossible to go back as

48:24

a regular trader on Wall Street. And

48:26

for Ronan's dad, here was the kicker. His

48:29

son was leaving the playing field to

48:31

become a referee. It

48:34

all struck me that if you see referees,

48:37

that was kind of skinny legs, and they're always popping

48:39

around the place. And I was thinking, you know, those

48:41

who can do, those who can't teach. You

48:43

know, those who can kick the ball,

48:45

play football, those can't referee.

48:48

And it just sort of thoughts

48:50

strange. You know that anybody

48:52

would want to be one? Why

48:55

would you want to be one? Why would you want to be a trap? Why

48:57

would you want to be a policeman? Gona making

48:59

people miserable every day?

49:05

I X did not so much open for business

49:07

as explode. After

49:09

its opening, Wall Street's biggest

49:11

banks were fine hundreds of millions of dollars

49:14

for cheating ordinary investors. I

49:16

X itself as a target of an expensive and

49:19

mendacious political media campaign

49:21

bought and paid for by the exchanges

49:23

and high frequency traders. Brad

49:26

and Ronan were threatened and

49:28

slandered. They needed

49:30

bodyguards. It took

49:32

them two years to get the SEC's approval

49:34

to open for business more than four

49:36

times as long as it took an exchange built by

49:38

high frequency traders, all

49:42

because they were doing the most seditious thing

49:44

that you could do. At the heart of American capitalism

49:47

introduced fairness. Right, Yeah,

49:51

fathers never know their sons

49:54

are like my father, nephy knew a job

49:56

I had, he taught I'd worked for since HSIPOL

49:58

chargeable organization give them money

50:00

to companies. He

50:02

didn't understand inward investment. But I

50:05

didn't fully understand for Ronan was

50:08

that Ronan Ryan.

50:10

I don't think he particularly even wanted to be a referee.

50:13

It just so happened that the place he landed, Wall

50:16

Street, couldn't accommodate both his ambition

50:18

and his character. His Mama

50:21

and daddy raised him a certain way, and he couldn't

50:23

quite forget it. They raised him

50:25

to see other people as just people who are

50:27

either full of shit or not. It

50:30

turned out that Wall Street had a crying need

50:32

for someone who is not full of shit, and

50:35

Ronan Ryan had a serious talent for it.

50:39

Now right, I

50:41

did, I got everything. Why

50:44

do people become referees actual

50:47

refs, I mean, not the ones who get into

50:49

it because some powerful player has bribed

50:51

them to play the role. I

50:54

don't think there's a single simple reason

50:57

the refs in the NBA may there, mainly

50:59

because they love the game and it's their way into

51:01

it. Ken Feinberg,

51:04

he discovered in himself a gift for a kind

51:06

of ferocious neutrality, found

51:09

ways to exercise that gift, and discovered

51:12

that our society just now desperately needs

51:14

it. Let's

51:19

pause a moment to thank our refs, the honest

51:21

ones. We can tell ourselves

51:24

that they're doing what they're doing for the same self

51:26

serving reasons the rest of us do what we do.

51:29

But there really are people who step up in

51:31

certain moments, in certain situations

51:34

to insist on fairness, even

51:37

if their fathers never fully understand

51:39

what they do, and even

51:41

though the world never fully appreciates

51:44

it. All

51:49

right, consider it a

51:51

birthday present. Ten shares of Apple, all

51:53

right, all right, give me

51:56

Apple screws us. Not my fault, if

51:59

not your fault, Thanks

52:01

for being Thanks for being my getting paid. You're

52:04

a good podcast job. Do

52:07

you think in the olden days just is very

52:09

off topic, But it's about money. When

52:12

money was like a dollar,

52:15

you could buy a lot of stuff. M

52:18

Do you think in the olden days people called

52:20

people with over one hundred

52:22

dollars hundred nays,

52:27

one hundred air as opposed to a millionaire. Yeah,

52:29

and then a thousand air. They must

52:32

have had a word before a millionaire, right, Yeah,

52:34

it was called rich because they're

52:39

rich. They're just a rich I'm

52:48

Michael Lewis. Thanks for

52:50

listening to Against the Rules. Against

52:53

the Rules is brought to you by Pushkin Industries.

52:56

The show is produced by Audrey Dilling and

52:58

Catherine Girdo, with research assistance

53:01

from Zoe Oliver Gray and Beth Johnson. Our

53:04

editor is Julia Barton. Mia

53:06

Lobelle is our executive producer. Our

53:09

theme was composed by Nick Brittell,

53:11

with additional scoring by Seth Samuel,

53:14

mastering by Jason Gambrel. Our

53:17

show was recorded at Northgate Studios

53:20

in Berkeley by Tofa Ruth Special

53:23

thanks to our founders Jacob Weisberg

53:25

and Malcolm Gladwell. That's

53:37

not Yours