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

[tomdavis]

Quote from vicirek:

How do you plan to defeat Goldman who might be pulling all the strings to get it done.

Goldman "might" be pulling strings to get it done. And they might not. Do you have specific information about this? If so, please share it with us.

What we can do right now is work on Congress. Without congressional approval there will be no FTT. All traders should contact their congressional representatives to register their opposition to the FTT and put pressure on their brokers and the exchanges to do the same.

 

[justrading]

Quote from tomdavis:

What we can do right now is work on Congress. Without congressional approval there will be no FTT. All traders should contact their congressional representatives to register their opposition to the FTT and put pressure on their brokers and the exchanges to do the same.

I have a very simple philosophy that no matter what happens I will survive this.

It is not the same as passively accepting the FTT. As a foreigner I am not in a position to lobby Congress. What I can do and have done is provide material here to those who can and should be writing in to Congress.

My futures broker is American and I have sent him the website link, expressed my concern at developments, and asked him to share the link with his associates.

When push comes to shove, I have the option of opening an account with a brokerage anywhere in the world and trading there. That includes Interactive Brokers outside the U.S. which will give me access to multiple exchanges and avoid FTT that is U.S. centric. That is an option that those of you who live in the land of the (not so) free may not have.

Nevertheless I remain committed to opposing the FTT (not least because of the juvenile arguments in favour) and will support this endeavour in whatever way I can.

 

[vicirek]

Quote from tomdavis:

Goldman "might" be pulling strings to get it done. And they might not. Do you have specific information about this? If so, please share it with us.

What we can do right now is work on Congress. Without congressional approval there will be no FTT. All traders should contact their congressional representatives to register their opposition to the FTT and put pressure on their brokers and the exchanges to do the same.

I do not have any specifics but media noise points that some of it is coming from the industry. In the end it has to appear that somebody else imposed this nuisance on them.

Back to congress. You may write letters but you have to realize that congress elects themselves and they answer to power centers and lobbyist. Money for election comes from bond printing that is co-sponsored by foreign countries to pay local corrupt electorate for reelection. Economy has been exported abroad and democracy has been hijacked. They are only interested in keeping people confused so they vote randomly 50/50 and those paid votes are enough to get reelected so they do not have to read your letters anymore.

With FTT the only hope is the current status of the industry. It would be difficult to impose heavy tax when current transaction cost is around $1 per 100 shares and suddenly lots of people would see broker bill skyrocket back to hundreds per transaction.

It is easier to implement FTT in Europe because of low volumes and low number of individuals directly involved in the markets. In the US it is now beyond critical mass and trying to slow markets abruptly may cause big problem.

 

[lindq]

Quote from vicirek:


Back to congress. You may write letters but you have to realize that congress elects themselves and they answer to power centers and lobbyist.

A letter or personal contact of any kind is important. It signals that their vote - if it comes to it - may have a serious impact on some voters in their district.

 

[traderchi128]

Quote from tomdavis:

Goldman "might" be pulling strings to get it done. And they might not. Do you have specific information about this? If so, please share it with us.

What we can do right now is work on Congress. Without congressional approval there will be no FTT. All traders should contact their congressional representatives to register their opposition to the FTT and put pressure on their brokers and the exchanges to do the same.

There is no way in hell Goldman or any big bank wants this passed. Large trading firms and Hedge Funds will cease to exist if this was ever passed costing firms like GS a ton of revenue.

The FTT would be a disaster for GS, Wall Street, and then hit main street as well (people will not be at all happy when their IRA's and 401k's get cut in half as the stock market gets obliterated).

On a side note, great work you have done here Tom. The non-trading public needs to hear the truth and not listen to a democratic senator or two who have zero clue about what the FTT would do both destroying Wall street, and the lack of tax revenue it would bring in.

 

[vicirek]

Quote from traderchi128:

There is no way in hell Goldman or any big bank wants this passed. Large trading firms and Hedge Funds will cease to exist if this was ever passed costing firms like GS a ton of revenue.

Goldman and big banks are government bond warehousing and distribution operations and their money comes from participating in this Ponzi scheme. The rest of the economy is exported and the flagship of the US economy is Facebook. For them the rest of the market is smoke and mirrors and they would be glad to concentrate most of the market activity in the bond market. FTT is one of the strategies helping to achieve that. They and the markets they operate in will be exempt.

Exemptions are the key word and this is the only realistic way to fight FTT by watering it down so it will become ineffective while flashing the headlines that big banks got punished.

 

[TraDaToR]

I just checked the volume on CAC40 stocks since the FTT and across about 25 tickers I downloaded the volume is down around 30%( just a guesstimate ). It's going down a lot in the last few days. It's difficult to know what is due to vacations and what is due to FTT. There was also a lot of uncommon activity around July 31st( Air France for example ), funds closing positions pre FTT probably...

 

[Robert A. Green]

Quote from TraDaToR:

I just checked the volume on CAC40 stocks since the FTT and across about 25 tickers I downloaded the volume is down around 30%( just a guesstimate ). It's going down a lot in the last few days. It's difficult to know what is due to vacations and what is due to FTT. There was also a lot of uncommon activity around July 31st( Air France for example ), funds closing positions pre FTT probably...

We are looking to show how FTT contributes to:
volatility increasing, not decreasing with FTT 'sands in the wheel';
Spreads increasing between bid and ask, with worse prices for those who use the markets;
More flash crashes with traders not providing liquidity;
Disappointing FTT revenues with transactions moving to non-FTT markets;

Volume reduction shows us the FTT effect, but FTT advocates want sand in the wheels and less volume. They want no HFT volume.

Let's expand and refine the above list of what tell tale signs we can use to prove our point.

 

[TraDaToR]

Good points Robert.

But in the case of this FTT, the spreads won't increase as MMs are exempt ( and apparently even non-MMs only trading during the day with no position at night are exempt ), so liquidity will be there and there won't be more flash crashes...

However, I would like to see their faces when they will realize they have cut 30% more volume of the already struggling french market and that they won't even meet their 300m euros or so revenue at the end of the year...LOL

 

[lindq]

Let's expand and refine the above list of what tell tale signs we can use to prove our point. [/B]

Unemployment and supporting business failures in the sector resulting in a smaller tax source.

If I was a French journalist I'd want to be interviewing the first financial-sector employees who lost their jobs.

But the French have purposefully complicated matters trying to run any analysis on this FTT of theirs, as only a partial list of stocks is involved. They obviously didn't want to open the gates on everything and come out looking like fools. So at present they can slice and dice the numbers any way they want.

IMO, ultimately the only tell worth anything is tax revenue from the sector, putting together all the elements. Well, good luck with waiting for that.