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

ok...lets take a look at this...

the PDT rule......who did this protect? Nobody...what was the net affect? The DT industry was devoured and the largest Wall St. companies benefited with increased volume and less competition

Decimals......who did this protect? nobdoy....who did this hurt? DTers' and who benefited? Th largest ECN's and MM's on the street...

Short Sales and locates: Who did this protect? The largest firms on the street...Who did it harm? Traders who wanted to go short at small firms

The SEC ban on shorting certain stocks: Protected who??? Investors? nope...who did it benefit? MS, CITI, LEH, GS...who did it hurt?/ Traders

NSCC/DTC batching restriction. was the public protected or helped by this? Nope. Were prop trading frims hurt by this? yup...raised the cost of batching trades...the large firms? Took away another layer of volume they want to get at.
 
these journalist just write what they hear from their source and their source is 'sometimes' bullshiit


Quote from tradersboredom:

these journalist or media are the biggest market manipulators

they are protected by freedom of the press so they can publish anything they want just to sell newspapers.
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Quote from TM_Direct:

ok...lets take a look at this...

the PDT rule......who did this protect? Nobody...what was the net affect? The DT industry was devoured and the largest Wall St. companies benefited with increased volume and less competition

Decimals......who did this protect? nobdoy....who did this hurt? DTers' and who benefited? Th largest ECN's and MM's on the street...

Short Sales and locates: Who did this protect? The largest firms on the street...Who did it harm? Traders who wanted to go short at small firms

The SEC ban on shorting certain stocks: Protected who??? Investors? nope...who did it benefit? MS, CITI, LEH, GS...who did it hurt?/ Traders

NSCC/DTC batching restriction. was the public protected or helped by this? Nope. Were prop trading frims hurt by this? yup...raised the cost of batching trades...the large firms? Took away another layer of volume they want to get at.
More...

GOOD points!
 
The D.C. mafia is on the loose and extortion is the name of the game. Look for lots and lots of "creative" taxes during the upcoming months/years. Somebody has to pay for this mess and it sure as hell won't be the guys who created it.
 
Theoretically decimals gave customers a better price, and decimals have certainly lead to shrinking of market width. This is not good for day traders, but it certainly helps liquidity and the function of markets, so you can't lump decimals in here.
 
Quote from CaptainObvious:

Look for lots and lots of "creative" taxes during the upcoming months/years. Somebody has to pay for this mess and it sure as hell won't be the guys who created it.
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Sums it up beautifully!
 
That article referred to at barackobama.com is closed for comments, too. This is starting to piss me off. No way to criticize these ideas!

This worries me less for the fact that I won't be able to trade anymore, more for the fact that it will result in a lot of industries practically going poof! and being gone. The last thing we need right now is *less jobs*.

There are 3.8 unemployed people right now for every job opening. Think about that. It's sobering. That's getting to the point where you have to start considering famine and such as consequences if people have no way of bringing in money.

We need to cut out any crap politicians are thinking of that will increase that number. They cannot fill the well back up with jobs fast enough if they do things like this to destroy them.
 
http://www.paid2trade.com/?p=466

Why is it that people with no understanding of financial markets feel compelled to offer solutions to what they perceive as problems?

This recent New York Times opinion article suggests that a transaction tax to reduce liquidity of US markets would be a good thing. Not so. People from all over the world use the US markets precisely because of the high liquidity and small transactional costs, ultimately to the benefit of the American economy. The stock exchanges, brokers, market participants, retirement funds, large investors, and mom-and-pop investors all reap the rewards of one of the most welcoming markets in the world. Clearly, the long term consequences of a transaction tax have not been considered. With this transaction tax, all investors, from the large institutions to the mom-and-pop hundred share lots, would pay more upon buying and receive less upon selling.

As an example, compare three or four stocks that trade between 100,000 to 500,000 shares per day with stocks that trade 5 million shares per day. First, you will notice that the bid and ask spread is much larger and thinner in the lower volume stocks. Second, you will find that when there is a large buy or sell order, the price of the stock moves proportionately further than with the higher volume stocks. Obviously, those in favor of the tax have not realized the magnitude of this indirect transactional cost. Even scarier, the stress of these additional costs to investors could drive their interests to the markets of other countries. New York is already faced with stiff competition from London and other locations that would love to have the markets we now enjoy. Do we really want more layoffs and higher office vacancies in New York City? How about Chicago?

I am also troubled by the notion that participating in the markets is a nonproductive activity. It's akin to saying that a journalist is engaged in a nonproductive activity or being a soldier is a nonproductive activity. Providing companies with easy and inexpensive access to working capital is, in my mind, extremely productive and crucial to a healthy capitalist economy. The increased cost to those investing in American companies would also be passed to the consumer, yet another negative economic consequence not mentioned in the Times opinion article.

What we need now is an intelligent discussion of how we can increase wealth in this country without taxing business sectors out of existence, especially businesses that lubricate the wheels of wealth building to promote capitalism. If we destroy what is left of the free market in the United States, what will be left to pass along to our children besides mountains of debt?

Let us not be so quick to “tax the other guy” as we all know what goes around comes around in an environment that is seeking to punish someone else.
 
Good post, Robert. I think it would be a good thing if we could find articles to leave our comments at so people who don't trade can read the commentary.

Everyone, let us know when you find articles that are still open to comments.

Speculators are productive especially since they are doing something which brings foreign money into the US. This point needs to be made loud and clear. If the US markets become the most undesirable for investors of the world, other countries and exchanges will step up to the plate in short order. If you are providing something the world wants, you are being productive.
 
Quote from WindyCityEagle:

Theoretically decimals gave customers a better price, and decimals have certainly lead to shrinking of market width. This is not good for day traders, but it certainly helps liquidity and the function of markets, so you can't lump decimals in here.
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good traders have been able to adapt to narrower spreads resulting from decimals.
every good trader i have known complained in the beginning but quickly adapted to the pt. where they were making the same or more money.

day traders will be grateful if and when the uptick rule comes back. it is nice if you can short a penny up under an uptick rule.

as usual Goldman and the old boy's club including Bright prefer wider spreads.
 
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