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

What a greedy statist dumb f---, 0.25%! Sounds like a Merrill Lynch et al shareholder who believes in GWB "free enterprise" or Obamanomics, and a Buy and Mold model. One last swing trade - load up on BGZ, TZA, TWM, RSW etc and turn off the lights as you leave the country.

Hope UK totally sinks soonest, as an object lesson for all, before we do any thing so stupid.

NB. For the first 15 years, my average holding time was 7-8 years, made okay to good money, never burned due to market timing, stepped out of tech market in Nov 1999. Now a long term investment for me may be a week or two, or over lunch. And some of my ancestors were Royal Navy officers.
 
If you look at it from the public/non traders' perspective, how do you prevent excessive bubbles or collapses from happening? Unstable prices wreak havoc on the economy. Who caused the run up and then collapse of equity and commodity prices? Weren't traders a big part of that?

More stable prices for equities and commodities would be a lot better for everyone, perhaps even better for traders. What else could you do to stabilize prices besides charging a trading tax? Is there a better way?
 
Quote from Sam Mcgee:

If you look at it from the public/non traders' perspective, how do you prevent excessive bubbles or collapses from happening? Unstable prices wreak havoc on the economy. Who caused the run up and then collapse of equity and commodity prices? Weren't traders a big part of that?

More stable prices for equities and commodities would be a lot better for everyone, perhaps even better for traders. What else could you do to stabilize prices besides charging a trading tax? Is there a better way?
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EFFECT=/= CAUSE!
You're correct about stable prices being a sign of a rich (and stable) market, but price movement (and hence, stability as well) is a function of an interplay of many things -- one of the greatest being a (functionally) infinite number of buyers and sellers. Imposing a per-trade percentage tax will reduce buyers/sellers tremendously, and we'll be left with *sticky* prices that ratchet outrageously, and may only occasionally represent what an otherwise-unfettered market would show. This trading-tax idea is a disaster. Sticky prices are not stable prices.
 
Quote from KrispyKreme50:

It's interesting how most of the comments on that article's page show a profound ignorance of how the markets work. It seems like most of them are supporting it because it "sounds good."
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It's all about feelings, not logic these days. A nation of feelers.
 
Quote from DmanX:

What's shameful about this far left thinking is that they have this notion that traders conduct "non-productive activites."

That's like saying that a "service economy" is non-productive.

Like a service economy, traders and speculators are a necessary component.

What is more, successful traders garner more disposable income than a 9-to-5-er. More disposable income means more premium products and services purchased - which often carry higher margins - which means more profit for the one selling the product or service.

So much for the notion of "non-productive."

In any event, the exchanges would fight this tooth and nail. Especially the futures exchanges whose profits are based mostly upon the number of transactions of contracts that have no intrinsic or lasting value - hence can hardly be deemed as assets. Their profits would see a precipitous decline should a transaction tax be imposed on derivatives whose notational value is significant higher than any other asset.

In any event, I since a future is a contract and not an asset (the underlying is the asset) I suppose this idea will only apply to stocks, bonds and real estate. Even so, it will affect all markets and likely will be vigorously defended against by some of the aforementioned entities.
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you said it dman!
 
Quote from Sam Mcgee:

If you look at it from the public/non traders' perspective, how do you prevent excessive bubbles or collapses from happening? Unstable prices wreak havoc on the economy. Who caused the run up and then collapse of equity and commodity prices? Weren't traders a big part of that?

More stable prices for equities and commodities would be a lot better for everyone, perhaps even better for traders. What else could you do to stabilize prices besides charging a trading tax? Is there a better way?
More...

Why do traders have to pay for something they didn't create?

What created the housing bubble?

1. Lax lending standards.
2. "Innovative" loans.
3. Securitization of mortgages that transfer most of the risk to the investor.
4. Zero down loans.

That in turn created price inflation across the board.

Traders make money via volatility. They speculate. They have no vested interest in continued price appreciation which is what a bubble is, albeit parabolically. Investors have a vested interest in it as they almost exclusively make money on the buy side of things by buying and holding.

If you want to stop bubbles, you engage in proactive regulation. Meaning, sit down and assess the risk of some new fangled financial activity and act expeditiously to moderate it. But instead what happened is that the so called regulators turned a blind eye and/or encouraged it.
 
Quote from gnome:

So... as a trader and you did 50 round turns of your capital in a year, the 'transaction' tax would amount to 25% of your capital.

The exchange volume would shrink a shocking amount such that there would soon be cries to "repeal the tax."

Also, huge chunks of capital to be traded would find homes overseas... one can justify expenses in order to save "25% of capital" (each year, too) tax.

Such a transaction tax would be just as stupid as the Stamp Act tax in Revolutionary times.
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How this stuff works is they throw out a number that won't fly to make the eventual number look better. Like they're giving the traders a break with a lesser number. Showing us how magnanimous they are by only taxing a tenth of a percent or something like that, instead of a quarter. LOL

So the final result is a number they pick that won't completely shut everyone down, but will limit things dramatically.

That's just the way these nasty things work.
 
Quote from DmanX:

Why do traders have to pay for something they didn't create?

What created the housing bubble?

1. Lax lending standards.
2. "Innovative" loans.
3. Securitization of mortgages that transfer most of the risk to the investor.
4. Zero down loans.

That in turn created price inflation across the board.

Traders make money via volatility. They speculate. They have no vested interest in continued price appreciation which is what a bubble is, albeit parabolically. Investors have a vested interest in it as they almost exclusively make money on the buy side of things by buying and holding.

If you want to stop bubbles, you engage in proactive regulation. Meaning, sit down and assess the risk of some new fangled financial activity and act expeditiously to moderate it. But instead what happened is that the so called regulators turned a blind eye and/or encouraged it.
More...


PEOPLE, YOU NEED TO BE POSTING THINGS LIKE THIS IN THE NY TIMES STORY COMMENTS SECTION. YOU'RE PREACHING TO THE CHOIR HERE.
 
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