1/4% Tax on all stock trades pushed in NY Times today
- Thread starter seasideheights
- Start date
Nice job Scott Redler of http://blog.t3live.com/, thanks for your excellent CNBC segment appearance today, and your overall efforts to defend against the financial-transaction tax. Appreciate you suggesting that traders sign our Petition too. Glad you raised the Main Street argument, as most traders live on Main Street and they are not part of Wall Street.
Economists in support of a financial-transaction tax are thinking long-term and they don't see the benefit of a short-term trading industry focused on short-term trading profits. Overall, they want America thinking more long-term, like with management thinking for the long term and not just managing income for the quarter.
Economists feel the short-term trading industry has grown faster and more profitable than other industries in America, and some think this industry is therefore crowding out other vital industries. They see a brain drain of top talent to Wall Street rather than to engineering, math and science. Sort of like the theory that big government and big government debt crowds out the private sector, which by the way I do agree with.
I appreciate these economistsâ big-picture points, but I also think their premises are wrong in the case of traders, and therefore they are very wrong about the financial-transaction tax.
The short-term trading industry has provided tremendous demand for new scientific, math, algorithms and engineering innovation and productivity, both in technology hardware, software and systems. Wall Street, banks, traders and the entire financial sector have been the biggest demander of innovation and productivity and they are the leading customers for all these scientific, math and engineering products and services. Without good paying customers like them, who can afford to finance new science and innovation? Without them, much of this good science simply would not have happened in the first place.
Government also orders up science like the space program and green energy, but it may not always be what the marketplace and customers demand, and that is more the key to success over the long-term. Wall Street, banks and traders paid for much of the innovation that is now used in medicine, research, science, manufacturing and more.
The short-term trading industry has used this innovation and productivity to do an even better job in its role as âspeculator market-maker,â not just for the benefit of investors (selling stock and new IPOs), but for all supply and demand of all commodities, futures and currencies too. As I have been writing about on my blog for the past few weeks (my blog on Dec. 1), the speculator is credited with delivering fair up-to-the minute pricing.
If the government is allowed to take and redistribute the short-term trading industries innovation and productivity â by unfairly replacing that savings with a placeholder transaction tax â the short-term speculator market maker will go away (be stifled) and the markets will wind up being unfairly priced. Itâs not in the publicâs interest (farmers, manufacturers and other users of the markets) to be stuck with distorted inefficient pricing.
The government wants to give a fiscal (negative tax) incentive for more long-term holding and related long-term pricing, but that will lead to booms, busts and bubbles.
Without the short-term trading speculator, suppliers wonât see a higher price sooner to give them the incentive to plant more crops faster. Same goes for the oil and gas producers too. Without the speculator raising prices faster, the gas guzzlers will keep up their ways and not conserve more. Without the speculator selling CDO toxic assets, the real estate suppliers would keep building too many house and pushing toxic mortgages to sell them.
I thought the governmentâs job after the recent financial meltdown was to take action to reduce booms, busts and bubbles. With this economistsâ new line of thinking on the financial-transaction tax, they are empowering Congressmen sponsors of a financial-transaction bill to gain traction with leadership; and the unintended consequences are the opposite of what they want to achieve.
My next post/blog soon will be to cut and past the DeFazio bill and show how every premise is wrong and therefore the logic is entirely out of whack.
Manufacturing is not being crowded out by finance but rather buttressed with finance. American companies are innovating and designing great products. Itâs just hard to compete with emerging market labor at a fraction of our labor costs. But by using robots, science and further innovation, we can compete in manufacturing. Wall Street, bankers and traders will finance this innovation by demanding it themselves and also financing the providersâ growth.
We can work this out together, so donât bury traders with this tax. We can reach the economists admirable goals of strong long-term innovation and success. One hand - finance and manufacturing - should go with the other, not slap the other.
I also rebutted the economists on my earlier blog on 12/03/09.
Economists in support of a financial-transaction tax are thinking long-term and they don't see the benefit of a short-term trading industry focused on short-term trading profits. Overall, they want America thinking more long-term, like with management thinking for the long term and not just managing income for the quarter.
Economists feel the short-term trading industry has grown faster and more profitable than other industries in America, and some think this industry is therefore crowding out other vital industries. They see a brain drain of top talent to Wall Street rather than to engineering, math and science. Sort of like the theory that big government and big government debt crowds out the private sector, which by the way I do agree with.
I appreciate these economistsâ big-picture points, but I also think their premises are wrong in the case of traders, and therefore they are very wrong about the financial-transaction tax.
The short-term trading industry has provided tremendous demand for new scientific, math, algorithms and engineering innovation and productivity, both in technology hardware, software and systems. Wall Street, banks, traders and the entire financial sector have been the biggest demander of innovation and productivity and they are the leading customers for all these scientific, math and engineering products and services. Without good paying customers like them, who can afford to finance new science and innovation? Without them, much of this good science simply would not have happened in the first place.
Government also orders up science like the space program and green energy, but it may not always be what the marketplace and customers demand, and that is more the key to success over the long-term. Wall Street, banks and traders paid for much of the innovation that is now used in medicine, research, science, manufacturing and more.
The short-term trading industry has used this innovation and productivity to do an even better job in its role as âspeculator market-maker,â not just for the benefit of investors (selling stock and new IPOs), but for all supply and demand of all commodities, futures and currencies too. As I have been writing about on my blog for the past few weeks (my blog on Dec. 1), the speculator is credited with delivering fair up-to-the minute pricing.
If the government is allowed to take and redistribute the short-term trading industries innovation and productivity â by unfairly replacing that savings with a placeholder transaction tax â the short-term speculator market maker will go away (be stifled) and the markets will wind up being unfairly priced. Itâs not in the publicâs interest (farmers, manufacturers and other users of the markets) to be stuck with distorted inefficient pricing.
The government wants to give a fiscal (negative tax) incentive for more long-term holding and related long-term pricing, but that will lead to booms, busts and bubbles.
Without the short-term trading speculator, suppliers wonât see a higher price sooner to give them the incentive to plant more crops faster. Same goes for the oil and gas producers too. Without the speculator raising prices faster, the gas guzzlers will keep up their ways and not conserve more. Without the speculator selling CDO toxic assets, the real estate suppliers would keep building too many house and pushing toxic mortgages to sell them.
I thought the governmentâs job after the recent financial meltdown was to take action to reduce booms, busts and bubbles. With this economistsâ new line of thinking on the financial-transaction tax, they are empowering Congressmen sponsors of a financial-transaction bill to gain traction with leadership; and the unintended consequences are the opposite of what they want to achieve.
My next post/blog soon will be to cut and past the DeFazio bill and show how every premise is wrong and therefore the logic is entirely out of whack.
Manufacturing is not being crowded out by finance but rather buttressed with finance. American companies are innovating and designing great products. Itâs just hard to compete with emerging market labor at a fraction of our labor costs. But by using robots, science and further innovation, we can compete in manufacturing. Wall Street, bankers and traders will finance this innovation by demanding it themselves and also financing the providersâ growth.
We can work this out together, so donât bury traders with this tax. We can reach the economists admirable goals of strong long-term innovation and success. One hand - finance and manufacturing - should go with the other, not slap the other.
I also rebutted the economists on my earlier blog on 12/03/09.
........................................
Politicos cannot add....They just say what sounds good to get votes....
And after the populist sells their IRA stock .....after the 30 to 70% decline....and the 10% liquidity spread.....
The populist is legally exempt from the tax.....
Too funny.....
Loses $30,000 + gains $200....
They win ......
this and all the rest your post is one of the best I ever read !
You answer precisely to what we do... ( if you need an assistant pm. me )
http://uk.news.yahoo.com/22/20091202/tbs-uk-highfrequency-frontiers-sb-7318940.html
Brazil, Japan, Colombia....
All are moving towards HFT....
HFT will be the reason one can have the confidence of very small bid ask spreads....the sole purpose of ECNs introduction.
HFT has/is effectively replacing the old guard at the exchanges....
Because of one reason...."Efficiency".....
ie Just watch BATS in Europe....
It's all about efficiency....and when the retiree wants to cash out....they will pay almost nothing....and are never locked in because of "real estate" like transaction costs....
What the world REALLY NEEDS are for all exchanges to be fully tax exempt....
THIS WILL CREATE JOBS.....
Brazil, Japan, Colombia....
All are moving towards HFT....
HFT will be the reason one can have the confidence of very small bid ask spreads....the sole purpose of ECNs introduction.
HFT has/is effectively replacing the old guard at the exchanges....
Because of one reason...."Efficiency".....
ie Just watch BATS in Europe....
It's all about efficiency....and when the retiree wants to cash out....they will pay almost nothing....and are never locked in because of "real estate" like transaction costs....
What the world REALLY NEEDS are for all exchanges to be fully tax exempt....
THIS WILL CREATE JOBS.....
Most now think the chance of global participation is now impossible. The same folks who doubtless thought no forced public option socialism health care or jail or huge fines, no doubt. Look at what is being tried with Climate change. These maniacs are extremely dangerous, and very determined to make us us all slaves.
It is sadly optimistic to believe it has no shot, with these ideologues in every corner of the globe. Look at the events of the past year in the US alone...
It is sadly optimistic to believe it has no shot, with these ideologues in every corner of the globe. Look at the events of the past year in the US alone...
It seems from the talk from Pelosi, it doesnt have to be every country just major financial centers, and then the can probably legislate the others away. Just like Switzerland is no longer a tax haven they can do the same things with this tax. As long as they get a majority of Europe.
however it's a big problem for a socialist country. We all know here that the market can solve almost all the problems if unleashed...
However what will be the role of all the social workers, administratives, even military etc etc... to much people depends on the gov for their income...
So the gov to stays in power will do everything to separate the people ( polarize them ) mainstreet vs wall street... as we all know that Ewall street leaves in mainstreet... the reason to separate them is always an external threat...
It's their salary who are at steak
wait the swiss people didn't vote on it.... yet
