1/4% Tax on all stock trades pushed in NY Times today

Quote from seasideheights:

Austan Goolsbee is also against it.

As far as Volcker, he also said the following.

"Former Federal Reserve Chairman Paul Volcker said in a September 24, 2009 hearing before the House Financial Services Committee that it “might be interesting” if Congress ordered a study of the idea of a transactions tax. But he pointed to the problem of driving transactions to other countries: “That’s the No. 1 problem.”"

http://www.ethicalmarkets.com/2009/...ss-leaders-on-the-financial-transactions-tax/
More...

Yeah I've seen that quote from Volcker as well. The quote I posted is from December (newest I could find) so I think it pretty much fits in with the announced bank tax and the new out today about limiting the banks, etc (the admin does not support a FTT)

In the quote you posted he mentioned the problem of it needing to be int'l and we know thats not going to happen.

-Guru
 
I think Obama chose the day GS announced profits quite deliberately. There was someone from the Kato Institute on CNBC complaining that GS isn't doing any commercial banking so they shouldn't be punished...but then it was Goldman with Hank Paulson as Treasury Secretary that acquired 'bank holding' status during the financial crisis when they were struggling with all the other investment banks to get funding (their application was 'fast tracked', I believe).

There should be more questions asked of the Fed here...why did they allow GS bank holding status and access to cheap Fed funding?

It is true that without this taxpayer funding to GS they wouldn't be making quite so much profits.

Some of you guys seem pretty worked up about this...I would probably join you if I worked at GS, MS, ML, etc. but as a small trader at least we're seeing a nice bit of volatility in ES for a change...!

Obama might look scared as a rabbit, but he's actually quite brave here...he knows this is going to be full scale war
 
Not FTT and its a couple of hours old but a piece of the overall picture, I feel. I wonder if Obama is going to ditch Bernanke? Especially now he's got the ear of one of the most hawkish central bank governors of all time, Paul Volcker...

From Dow Jones:

WASHINGTON (Dow Jones)--The U.S. Senate is "unlikely" to hold a confirmation vote on Federal Reserve Chairman Ben Bernanke's second term at the helm of the central bank, a senior Democratic leadership aide said Thursday.

Earlier this week, leadership aides said it was possible lawmakers would seek to vote on Bernanke's confirmation on Friday, but that now seems doubtful, the aide said.

The Fed chief's four year-term ends on Jan. 31. It is unclear what would happen if the Senate fails to approves him for a second term before then.

Bernanke is widely expected to be confirmed once a vote is held, but there are a handful of lawmakers preventing the Senate from moving directly to a vote. One of those, Sen. Bernie Sanders, a Vermont Independent who generally votes with the Democratic majority, is pressing for President Barack Obama to withdraw Bernanke's nomination and select another candidate to lead the Fed.
 
UPDATE: Nasdaq CEO: Proposed Transaction Tax Will Hurt Growth


By Darrell A. Hughes and Jacob Bunge
Of DOW JONES NEWSWIRES

http://online.wsj.com/article/BT-CO-20100121-713069.html?mod=WSJ_latestheadlines

WASHINGTON (Dow Jones)--Nasdaq Chief Executive Bob Greifeld, on Thursday, said a proposed transaction tax will stifle investor activity, the creation of jobs and potentially lead to lackluster economic growth.

"Rather than encouraging capital formation, these proposals would damage our equity and ownership culture," Greifeld said at a press conference, adding that "past efforts to tax the functioning of the markets have failed."

The proposal, backed by Rep. Peter DeFazio, (D., Ore.) last month, is aimed at charging investors for trading stocks, futures, swaps and other financial products. Similar legislation was introduced by Sen. Tom Harkin (D., Iowa) in late November.

Such a tax had been floated by lawmakers and policy groups as one way to pay for proposed financial regulation and health-care reforms.

Greifeld said such tax should be implemented in situations where there is an asset bubble or over-heated economy, neither of which has taken place in the U.S. Lawmakers want to institute the tax to raise revenue, the executive said.

Greifeld said he planned to meet with Democrat and Republican lawmakers on Thursday to discuss various financial reform proposals, including the transaction-tax idea.

In the third quarter of 2009, about 30% of Nasdaq's net revenue came from transaction-related fees.

During the press conference, Greifeld spoke of the various impacts a transaction tax can have on markets. Sweden introduced a 1% tax in 1984, but later doubled it, causing its volume of shares traded circa 1990 to slip more than 50%, Greifeld said. He also mentioned moves in 2007 made by China to triple its 0.1% transaction tax. However, that action stemmed from concern that the Chinese markets were overheating. Still, Greifeld said "the markets fell by 6.9% in only a few hours."

From a domestic standpoint, the idea has sparked fears among the financial services industry that trade would flow to overseas markets, badly damaging liquidity for U.S. investors. The transaction-tax idea has drawn sharp criticism from exchange operators, market participants and academics.

Obama administration officials, including Treasury Secretary Timothy Geithner, are seen as cool to the idea of a tax on trading. From abroad, the proposed tax has support, particularly from some in Europe, including the German Chancellor Angela Merkel, who signaled support for the idea.

Additionally, Greifeld reiterated a call for securities regulators to scrutinize the role of dark pools--private venues in which institutional investors execute trades anonymously--in the process of price discovery. Like other exchange executives, Greifeld expressed concern that a growing percentage of business transacted off-exchange could make on-exchange, public prices less reliable.

"There is a tipping point beyond where darkness which does not contribute to price discovery can harm the markets, reduce liquidity, and distort the pricing process that should instead offer fair and equal access to all market participants," he said.

Greifeld did note that dark pools can improve liquidity for stocks that are infrequently traded on public markets, with dealer-run venues boosting trading activity in these names by 25%.
 
Here are some more comments from the Nasdaq CEO regarding the TT:

"The top executive of the world's largest exchange company today blasted the Congress for moving toward a securities transaction tax as a way to "punish" Wall Street for the excesses of the past decade."

Bob Greifeld, Chief Executive Officer of The NASDAQ OMX Group (NASDAQ: NDAQ), clarified to a select audience of journalists, academia and market pundits, "I'm not speaking of the "TARP tax" or "financial crisis responsibility fee" which the Administration discussed last week but something very different: a tax on all securities transactions that would cause a long term change to functioning markets."

Greifeld speaking at the Newsmakers press conference at the National Press Club cautioned, "This tax would introduce new and unnecessary friction to our markets, markets that functioned well even during the worst of the financial crisis in the fall of 2008."

"Good ideas, funded by capital, produce jobs," is the point of intersection between Main Street and Wall Street, he argued, defining the role of Wall Street "to provide the ability to raise capital to grow jobs for Main Street."

"Rather than encouraging capital formation, these proposals would damage our equity and ownership culture," Greifeld said, adding that "past efforts to tax the functioning of the markets have failed."

http://www.allheadlinenews.com/articles/7017588624

-Guru
 
Volcker rule and opportunities for traders in banks

If the new Volcker rule is enacted, bankers will have a choice to make between commercial bank lending or investment management businesses. Portfolio managers in banks can take control of their own destiny, act as entrepreneurs and do great with these changes.

Chairman Frank just said it will take several years to phase in the President’s new rules, and Congress does not want to cause a fire sale for banks on divesting of businesses. Thank goodness for that, but business planning still spans several years and this will cause great shock during a fragile recovery. I have said for months that proprietary trading gains helped to save the banks during this recovery. I think these new Volcker rules are a bad idea and there are better ways to address their concerns. But that’s a different article.

Commercial bank lending has some pros and cons. The pros are very low interest rates from the Fed, high lending rates for credit card customers, and reasonable lending rates for mortgages and business loans. The profit-interest-spread is very large. But, the cons are that lending is a very dangerous business, especially in America where bankruptcies can almost be purchased at a big-box store quickly, cheaply and with few consequences. Americans not paying their mortgages is how we got into this mess in the first place.

Investment management businesses have pros and cons too. They also benefit from low interest rates on leverage, even if they are not commercial lenders getting even lower rates. There are lots of risks in trading, especially with market disruptions and that is what the White House and Mr. Volcker want to avoid. Most on Wall Street understand these risks and have done well overall in investment management businesses.

The Volcker rule simulates Glass-Steagall and will lead to many bank break ups, mergers, acquisitions and sell-offs as banks chose which side they are on.

The Goldman fiasco led to this action more than anything in my view. Goldman packaging CDOs, selling them to investors, while shorting them at the same time in their own investment management businesses and client investment management businesses like Paulson’s fund (where multiple billions were made). Which hat was Goldman wearing? Principal, banker, fiduciary, broker, advisor, counterparty and/or adversary on the trade?

These same concepts apply to CPAs in our code of ethics. You can be a CFP, attorney and CPA all in one, but if you say CPA for attest services, you can’t include those other titles or roles in the client relationship.

Here’s the important point for traders inside banks. Don’t just sit back and let your bank package you and your team up along with your portfolio and sell you all off for their own profit. Take control of the situation and try to forge your own deal making in your own best interests too. Plenty of portfolio managers have left AIG to simulate the good (and not bad) business they had. Plenty of marketable securities and derivatives are available to purchase with new investor money (the same investors) and you can be in control with much greater profit opportunities. I’ve seen fortunes made in this manner over the years, when banks need to cast aside great businesses.

This is an excellent opportunity for portfolio managers to set up their own businesses.

Back to a financial-transaction tax concern for traders. I think the White House has announced enough major change with the bank fee and Volcker rules – on top of financial reform efforts already underway in Congress - which is very disruptive to the economy and will cause great debate in Congress and within industry. How and why should the White House or Congress also pursue an even-more troubling FTT? The White House financial reforms and bank fee seem to address the concerns they had all along and it follows up on what they said they would do and not do. The White House said no to a FTT and so have all their key players Geithner, Summers, Goolsbee, Volcker and more. Keep it that way.
 
Hello my trader brothers !

If anyone want to speak about stock news or market opinion with me this is my contact: ID:bzsolt_joe

Me too said my opinion :)





A trader,who make 40% the last year.
 
http://online.wsj.com/article/BT-CO-20100119-710122.html?mod=WSJ_World_MIDDLEHeadlinesEurope

But in a press conference Tuesday alongside EU President Herman van Rompuy, Brown said the IMF, which has been tasked with reporting back on the issue by April, is now considering the U.S. levy.

"The American proposal is one which I think will now be considered by the International Monetary Fund," he said.


Seems maybe Brown is turning the course a tad and the new EU president who was adamant abaout a Tobin Tax last year now seeming to change tune a tad.
 
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