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

The tax wont hurt me at all actually seeing as im doing like 10 trades a year.

When people profit off of day trades does it not come at the expense of the long positions in the market in general? once again I am asking not arguing. total noobie
 
Soros view on FTT-

"Soros reiterated his view in a panel discussion in Vienna that the euro had a basic flaw from the start in that the currency was not backed by political union or a joint treasury.......


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Some steps the EU could adopt included creating a larger central budget; directing some of the income from value-added tax or a levy on financial transactions to Brussels; having a European institution guarantee banks, and tripling the size of its bailout fund by topping it up with tax revenue, he said."

http://www.elitetrader.com/vb/showthread.php?threadid=222739
 
Quote from lindq:

I would be careful here about positioning yourself as against "nurses" in any form whatsoever. I would not use the word nurses at all. Come up with something else.

I would also be careful about using the word "speculators", as in speculators are good, helpful, etc.

Very simply, the average listener to your interview can be assumed to love nurses and hate speculators. So with the positioning you lay out above, you lose on both cases.

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I decided to skip the Voice of America studio interview. Long drive to city in traffic is not worth it for a minute on air. One of you warned me about getting a fair shake on this network. Also, you suggested above that I don't take on nurses and don't talk about speculation, and both were fundamental to my preparation for this interview. My blog is being editing down to (much smaller) size and I will publish it on Forbes and our site soon. Thanks for your help and guidance here.
 
Quote from Jackofclubs111:

When people profit off of day trades does it not come at the expense of the long positions in the market in general? once again I am asking not arguing. total noobie
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There are people who profit off day trades, and there are people who lose. It is a two-sided market.

And because it is a two-sided market of buyers and sellers, the more there are, the closer the matching of prices to buy and sell. Thus, the less volatility, and the more efficient movement of prices.

But as the number of participants in a market declines, bids and offers increase the separation between the buyers and seller, volatility increases, and the cost of each transaction increases because of the increase in spreads.

Regarding your long term investment, when you buy and sell would you rather have few buyers or sellers, or many? Of course you want many, because your price will be filled quickly at a low cost. But if you are unlucky enough to hold a security that has very few buyers (That's happened to me), then you may be unable to sell at a price you want, or at any fair price.

So again, while you may instinctively feel that active trading in your stock is harmful to your position, overall the more people in the market, trading at low costs, is to your advantage.

The same holds true for any marketplace. For example, imagine that you want to sell a car on CraigsList. If there are a lot of buyers looking for your car, there will be good response and everyone will have a good idea of what the car is worth, because there's an active market. The history of pricing on the car will not be volatile. And you're likely to get decent price, because you can count on multiple offers. Conversely, a car that has only a few buyers in the market is likely to have little information on past pricing, so the pricing curve will be volatile. And since there is little demand, the price you receive will not be as efficient or fair as the price for a car with an active market.

Stocks...cars...homes...tulips. Same basic economic fundamentals apply. SO LONG AS THE GOVERNMENT MAINTAINS FREE MARKETS AND THE FREE FLOW OF CAPITAL.
 
Quote from TraDaToR:

It doesn't have to be the UK or Germany, it can be Sweden, Czech Republic, the Netherlands...
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. . . or perhaps little Malta will be the spoiler:

http://www.di-ve.com/Default.aspx?ID=72&Action=1&NewsId=84328

A significant majority of EU citizens favour the introduction of a tax on financial transactions, a survey shows, but Malta is the only country to buck the trend. The Eurobarometer opinion poll carried out for the European Parliament showed that in all, 61% supported the principle, 26% opposed it and 13% expressed no opinion.

The Austrians are the most enthusiastic about such a tax, with 80% expressing themselves in favour, followed by the Germans (71%).

In every other country, more respondents backed the tax than opposed it, except in Malta, where just 30% favoured it and 44% opposed it.
 
Quote from Jackofclubs111:

Isn't this the reason they are trying to stop HFT in the first place?
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No, it's basically a populist anti capitalist proposal, mostly supported by nut job economists such as Paul Krugman.

Ironically the poor would suffer most. Think of pensioners and savers that rely on investments for their income (and who are already suffering with 0% interest rates). Farmers would also suffer, as would businesses such as airlines or food retailers that rely on hedging in commodity and financial futures to reduce non core business risks. Ordinary stock traders working from home and trying to make a living in between jobs would be also be hit.

Please look at the example of Sweden from 1984-91 to see how volumes collapse when a FTT is introduced. Job losses are inevitable. For many supporters of FTT, of course, that is the intention. Kill the capital flows that are integral to trade, commerce and capitalism. Enormous suffering and poverty would likely be the end result.

Of course, investment banks may well get an exemption like they do in the UK where a stamp duty tax only affects retail investors when they buy shares as investments. Banks could even be net winners as competition from smaller trading houses and day traders is wiped out. Smaller trading outfits do not have the funding via deposit taking that banks enjoy, nor the implicit bailout that the taxpayer provides to large banks.

If there are no exemptions for the wealthy elite on Wall Street, the experience would mirror that seen in Sweden, and capital would simply move offshore to Singapore, Hong Kong, Macau, Bermuda, Cayman Islands, Jersey, Isle of Man...etc. all of whom would be delighted to grow their financial sectors at our expense.

The rest of us who can't afford to move offshore will just pay more in taxes, and higher charges passed on by banks.
 
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