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

Quote from drukes1234:

Hopefully this doesn't come off the wrong way but there is A TON of garbage on ET due to there simply being a ton of idiots in the world but this thread has been so on top of this issue it's been really impressive. WSJ, DJ, European websites/papers keep re-hashing the same **** all the time while we're actually finding the fresh, NEW commentary on the subject so good on everyone here.
More...

You'd be surprised at the number of influential people in the business who monitor this thread.

Reminder. Shortcut to this thread.
http://www.tinyurl.com/TransactionTax
 
Quote from drukes1234:

Hopefully this doesn't come off the wrong way but there is A TON of garbage on ET due to there simply being a ton of idiots in the world but this thread has been so on top of this issue it's been really impressive. WSJ, DJ, European websites/papers keep re-hashing the same shit all the time while we're actually finding the fresh, NEW commentary on the subject so good on everyone here. Again though I'm just asking all of you to continue or start writing your congressman/senators and commenting on websites/blogs etc. It really has become part of my trading day to get out there and raise hell against this thing because it's simply part of my job now to ensure my job security by doing my part, I hope all of you do the same. Have a good weekend.
More...

I agree, this is one of the most civil threads on ET and people actually get good info. I spend alot of my free time searching out articles and responding to them as well. I also write and rewrite my congress men and women along with senators. I have heard back so I know they are going through. You can email not just your reps but usually most reps have a place for non constituents, as I find people of importance I email them. Whether they are for or against the tax and different committees that our meaningful to our cause. Remember when your writing people to please be civil , not like we are on ET sometimes! Also when wrting you should mention you are a trader becuase we are proud of who we are but the focus of your arguments against the bill should be on the harm to mainstreet, the joblosses on mainstreet from the back lash effect of this. We keep to focus of mainstreet that should help. The legislators do not care about us traders in particular but they do care about the corporations losing jobs becuase we are out of work, as well as the effects on the economy this would have and tax revenue and what not. Thanks
 
The rationale for this potential tax - as expoused by some in congress - is to help pay for the "jobs bill".

And proposals are to increase the portion of the jobs bill that is going to create jobs in building infrastructure. Roads and bridges.

So...very simply...the tax would transfer jobs from the financial industry to the construction industry, and into the hands of your local politicians and their road-building buddies.

This, folks, is the bottom line.

So I would suggest that when writing your congressmen, you remind them of the impact on jobs throughout the financial industry on main street, not just in major institutions on Wall Street.

(If anyone has a link to online courses in how to lay concrete, I would appreciate it.)
 
Quote from zdreg: posts about CDFs and binary options and knockout options and US residents opening accounts overseas are absolute nonsense. somethings in life cannot be adapted to. if conditions do worsen tremendously you have to move on and consider some other way to make a living.
More...
Traders won't change their noise- and overtrading habits easily. The solution must therefore come from within the industry, i mean: exchanges - back to the drawing board!

Circumventing a tax on the amount of trading would first and foremost require reducing the number of trades. The new product will therefore have to actively discourage overtrading. It should be simply impossible trade in and out of it more frequently than say once a week, because of, say, very wide bid/ask spreads. But it will be completely ignored by traders, unless its price is sufficiently predictable (95%+ win rate) to allow the trader to discard stop-losses entirely, sitting patiently through each and every drawdown, with the confidence that the losing trade will at least break even. If the product is too liquid, they will be closing it prematurely (via 'stop loss' orders, which are essentially barrier options very highly likely to be triggered), incurring the new capital-gains-and-losses tax.

Moreover, the new product should have a very wide daily range, comparable with the taxable capital requirements (not with the maintenance margin, but with the notional value itself). So if the price of the new product will move $1k per day, then no more that $4k of taxable notional value should be required to maintain the position overnight, so that the tax on capital could be turned into a tax on profit (under the above assumption of the nearly 100% win rate). This would reduce the adverse impact of the proposed transaction tax to a mere 100% hike in the capital gains tax (making it literally a double taxation initiative).

Please judge for yourselves how realistic these assumptions are:
- of something with huge bid/ask spreads being profitable to someone else than the market maker,
- of wide bid/ask spreads not being mutually exclusive with liquidity and exchange-wide trading volume,
- of holding periods as long as weekly being acceptable risk for trading proprietary capital (or the risk managers of prop trading desks getting used to prohibitively large drawdowns and huge execution risk posed by wide bid/ask spreads),
- of a futures exchange coming up with a new product that would be created with the express purpose of making customers trade less (but not necessarily in low volumes),
- of the 95%+ win rate being passed to the customer, rather than consumed by the brokerages via their prop trading desks,
- of actually achieving the said 95%+ win rate without adversely skewed payoffs (such as the 1 : 20 avg_win-to-avg_loss-ratio known from shorting options), and last but not least,
- of 30% returns on investment not leading to widespread overleveraging from external sources of credit and again being passed to the consumer by the brokerages without 'profit sharing' hedge-fund-style 'commissions'.

You may say I'm a dreamer, but I strongly believe there are professional traders out there who can fulfill at least some of the above criteria consistently. Exchanges would like to hear from you, guys! But wait, I've just remembered: offering low-volume products is just not in their interest... Neither is it in the brokers' interest. Neither would any serious trader reveal such strategies, not even to a family member... So the entire hope rests in a naive amateur of a trader with an external source of funding, ready to say goodbye to his unique holy grail in the interest of the common good. Reader: do not laugh it off, it would be yet another prediction of yours...
 
I wouldnt worry about Geithner to much since yesterday the WH back him up and defended him vigouously. Even so its not the treasury sec, he works for OBAMA and his economic team and thats who gives him the transaction tax directive. I care about the most, the senate. So far so good there! I think he will survive, we jst need to get through these bills, jobs/infastructure, and health to take some heat off this. When there is no huge bills out there this stufff about the tranny tax will die down a bit. For being touted in the news this past week it has actually been silent over the past few days after Pelosi cam out with her opinion, and even silent overseas as well
 
Of course if this tax goes through, Government Sachs, JP Morgan, and the rest of the street will be exempt under some bullshit market maker rule, the same group of companies that helped create this mess will be exempt from paying for it, instead the innocent, honest, hard-working tax payer will end up paying for it through his own trading or pension fund.

Maybe the government should consider spending less, so they don't need to tax it's people so much.

Or what about charging fees to any financial institution that uses leverage, it could be a sliding scale, based on the $ size of leverage/equity ratio, so for example if a firm was levered 2:1 that would pay equivalent of 1% of profits or something like that, if a firm was levered 30:1 they would pay 50% of profits, therefore making it un-feasible to leverage too much, which would constrain excessive speculation and compensate the system for the risk they oppose on it. The fees collected could be held by the IMF which would use it an insurance fund to bailout any future financial institution blowups. This rule could apply to every trader, hedge fund, bank, insurance company, or anyone who uses overnight leverage.

Just an idea, others may be able to build upon it or come up with something more suitable for everyone in this situation, so there is a logical outcome, not a band-aid fix to a long term issue.
 
Quote from MrPowerBallad:

So they took a poll in the UK and the public there supports a tax -- part of the money to be used to save the children of Mumbai -- typical Gaurdian article:

http://www.guardian.co.uk/business/2009/nov/23/brown-urges-business-leaders-to-accept-tobin-tax
More...

That dam OXFAM, I hate them, typical spin on tobin, here is an article just posted from guardian as well, its not terrible for once. Still in favor but pointing out US is against it and atleast calling dem defazio a left leaning dem, instead of powerful dem as they usually say

http://www.guardian.co.uk/business/2009/nov/23/tobin-tax-supporters-pressure-united-states

Atleast this article points out he defazio only has 5 collegues, and Larsons bill would only be on derivitives.
 
You must log in or register to reply here.
Back
Top