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1/4% Tax on all stock trades pushed in NY Times today
- Thread starter seasideheights
- Start date
I think I am going to start emailing these "journalists" who write pro FTT pieces. Just walk them through how this will put me and 100,000s of people out of jobs. Do some basic math, point out how this falls on investors, how TARP paid back in full plus interest, and how a levy is the only way to tax the banks.
you should.
i've started writing to a few politicians and pro-ftt aid organization in my country as well. these people typically aren't assholes of some sort, they're just completely ignorant about trading in general. they honestly truly buy into the "0,1%, that's such a small number, nobody will even notice" (while it's not just a tax we are too greedy to pay, it will f*cking kill us off) and "if only every investor would be a serious LT investor, the whole world would be utopia" and "high frequency traders are making money out of our pockets" simply because they don't have our specialist knowledge. the more we can teach them without retarding them, and the more we can show them we're pretty normal people, the more of them will perhaps be open to our side.
i've started writing to a few politicians and pro-ftt aid organization in my country as well. these people typically aren't assholes of some sort, they're just completely ignorant about trading in general. they honestly truly buy into the "0,1%, that's such a small number, nobody will even notice" (while it's not just a tax we are too greedy to pay, it will f*cking kill us off) and "if only every investor would be a serious LT investor, the whole world would be utopia" and "high frequency traders are making money out of our pockets" simply because they don't have our specialist knowledge. the more we can teach them without retarding them, and the more we can show them we're pretty normal people, the more of them will perhaps be open to our side.
Quote from bjw:
you should.
i've started writing to a few politicians and pro-ftt aid organization in my country as well. these people typically aren't assholes of some sort, they're just completely ignorant about trading in general. they honestly truly buy into the "0,1%, that's such a small number, nobody will even notice" (while it's not just a tax we are too greedy to pay, it will f*cking kill us off) and "if only every investor would be a serious LT investor, the whole world would be utopia" and "high frequency traders are making money out of our pockets" simply because they don't have our specialist knowledge. the more we can teach them without retarding them, and the more we can show them we're pretty normal people, the more of them will perhaps be open to our side.
I've been doing the same. I've found the following references helpful:
=============================
FINANCIAL TRANSACTIONS TAX (FTT) WILL HIT WORKERâS PENSION SAVINGS
The FTT isnât a tax on bankers, itâs a tax on pension plans.
by Lars Oxelheim, PhD, Lund Institute of Economic Research, Lund, Sweden (Professor and Chairman of the Swedish Network for European Studies in Economics and Business)
The fact is that the FTT will directly affect ordinary citizens in Europe. One area in particular is the impact on pensions of workers active today.
Just to give an indication, a 30-year-old worker, retiring at the age of 65, having a pension fund yielding 5 per cent per annum, with a turnover of the portfolio of 1.5 times a year, will see his pension reduced by 5 per cent due to the Tobin tax.
The FTT is presented as directed at the financial industry, but eventually the man in the street is the one to foot the bill.
http://www.ft.com/intl/cms/s/0/0df299ba-15ef-11e1-b4b1-00144feabdc0.html#axzz1fHzgx4TV
==========================
DUTCH FUND WARNS FTT WOULD COST 'BILLIONS'
âGuus Warringa, chief legal counsel and board member of APG Asset Management, said: âThe rough calculations point to a multi-billion euro damage just for Dutch pension funds⦠The man on the street will pick up the cheque.â
http://www.efinancialnews.com/story/2011-11-14/dutch-fund-warns-ftt-would-cost-billions
==============================
TOBIN TAX COSTS 'WOULD FALL ON INVESTORS'
http://www.ft.com/cms/s/0/54e1aab8-25a9-11e1-856e-00144feabdc0.html#axzz1gthmcI9F
âThe Wellcome Trust, a charitable foundation with a £14bn ($22bn) investment portfolio, calculates an FTT would cost it £32m a year, equivalent to its 600-person strong programme in Kenya.
On the face of it, the proposed tax levels look relatively low, with minimum rates of 0.1 per cent for trading of equities and bonds and 0.01 per cent for derivatives. However, the analysis available so far suggests these costs could soon add up, with Mr Waters referring to suggestions that members of defined contribution pension schemes could see their retirement pots shrink by 20 per cent as a result of an FTT.
Most staggeringly, though, BlackRock estimates that its Euro Government Liquidity money market fund would incur an annual FTT bill of 782bps, entirely destroying the rationale for such a low-risk, low-return fund.â
================================
THE FTT WILL INCREASE MARKET VOLATILITY
Supporters of the tax claim the FTT will reduce market volatility. Economists in Sweden have been telling us that the opposite is true. When speculators are driven out of the market, volatility goes up. The CBO letter agrees with the Swedes.
âHowever, the tax would discourage all short-term trading, not just speculationâincluding transactions by well-informed traders and transactions that stabilize markets. Empirical evidence provides little indication that a transaction tax would reduce volatility. In fact, a number of research studies have concluded that higher transaction costs are associated with more, not less, volatility. (Footnote: See, for example, Thornton Matheson, Taxing Financial Transactions: Issues and Evidence, Working Paper WP/11/54 (International Monetary Fund, March 2011); and Neil McCulloch and Grazia Pacillo, The Tobin Taxâ A Review of the Evidence (Institute of Development Studies, University of Sussex, March 23, 2011).â
http://www.cbo.gov/ftpdocs/125xx/doc12576/12-12-2011_Hatch_Letter.pdf
============================
I can see US and UK traders are fighting against FTT.
Something surprising happened in Hong Kong, some brokerage union and stock brokers asked the legislative members to propose a levy on derivatives a few weeks ago. HK is already having 0.1% for levy and 0.002% for SFC (HK version of SEC) on stocks. Now, the brokers want CBBC and warrants being levied too!
You know why? they want to lower the turnover of derivatives!
Hope that stupid FTT idea never happens...
Something surprising happened in Hong Kong, some brokerage union and stock brokers asked the legislative members to propose a levy on derivatives a few weeks ago. HK is already having 0.1% for levy and 0.002% for SFC (HK version of SEC) on stocks. Now, the brokers want CBBC and warrants being levied too!
You know why? they want to lower the turnover of derivatives!
Hope that stupid FTT idea never happens...
Quote from Stok:
I think I am going to start emailing these "journalists" who write pro FTT pieces. Just walk them through how this will put me and 100,000s of people out of jobs. Do some basic math, point out how this falls on investors, how TARP paid back in full plus interest, and how a levy is the only way to tax the banks.
Several of us offline have been persuing that route since I started this thread. It's been effective. We receive many replies from journalists & some of the anti-FTT articles posted here have come about as a direct result of our discussions with them.
I encourage everyone to do the same. Ensure you are professional in your correspondence with them. The more professional you are, the more effective this technique works.
The Wellcome Trust, a charitable foundation with a £14bn ($22bn) investment portfolio, calculates an FTT would cost it £32m a year, equivalent to its 600-person strong programme in Kenya
http://www.ft.com/cms/s/0/54e1aab8-25a9-11e1-856e-00144feabdc0.html#axzz1h0iPt8yW
FTT is a threat to compel banks to buy government bonds.
I just had the following realization, which I sensed all along, but not this specifically. Perhaps, Germany and France are intimidating banks with FTT legislation mostly to compel banks to use their bailout liquidity provided by the ECB for buying EU PIIGS and other sovereign debt. Will that be exempt from FTT in final details?
The biggest obstacle in the EU crisis is that the ECB is not permitted to directly buy new government debt, bailing out sovereign members of the EU. But, it's acceptable for the ECB to provide liquidity to banks, so banks bailout sovereigns instead. The problem remains there is no guarantee that banks will use ECB liquidity to invest in sovereign debt and lend the money out as government leaders want.
This was the unfortunate lesson we learned from U.S. TARP. The Fed and government lent and invested in banks directly, and banks took the liquidity at close to zero interest rates to simply buy risk-free assets like Treasuries, with a nice spread for profit. The government did not compel banks to lend the money to distressed Main Street, or to homeowners with underwater mortgages.
Governments often use talk of tax hikes to intimidate private enterprise into doing what they want. Germany and France might be using FTT to threaten banks, and large funds, to persuade them not to trade for themselves, but rather to invest in PIIGS debt and lend more to Main Street.
It won't work. If banks fear losing money and feel uncertainty over punishing tax changes like FTT, they will take less risk and sit on their money even more. Attacking banks is not the answer. In the old days, some European kings would banish their bankers if they didn't comply with their wishes. Those days are over.
Find a more productive way to channel ECB liquidity into sovereign debt, rather than going through banks, and wanting to control them with FTT. It's starting to sound like a farce to say that the ECB won't be bailing out sovereign debt. You are not fooling anybody.
ET friends, should I do a blog on this, or not? What do you think?
I just had the following realization, which I sensed all along, but not this specifically. Perhaps, Germany and France are intimidating banks with FTT legislation mostly to compel banks to use their bailout liquidity provided by the ECB for buying EU PIIGS and other sovereign debt. Will that be exempt from FTT in final details?
The biggest obstacle in the EU crisis is that the ECB is not permitted to directly buy new government debt, bailing out sovereign members of the EU. But, it's acceptable for the ECB to provide liquidity to banks, so banks bailout sovereigns instead. The problem remains there is no guarantee that banks will use ECB liquidity to invest in sovereign debt and lend the money out as government leaders want.
This was the unfortunate lesson we learned from U.S. TARP. The Fed and government lent and invested in banks directly, and banks took the liquidity at close to zero interest rates to simply buy risk-free assets like Treasuries, with a nice spread for profit. The government did not compel banks to lend the money to distressed Main Street, or to homeowners with underwater mortgages.
Governments often use talk of tax hikes to intimidate private enterprise into doing what they want. Germany and France might be using FTT to threaten banks, and large funds, to persuade them not to trade for themselves, but rather to invest in PIIGS debt and lend more to Main Street.
It won't work. If banks fear losing money and feel uncertainty over punishing tax changes like FTT, they will take less risk and sit on their money even more. Attacking banks is not the answer. In the old days, some European kings would banish their bankers if they didn't comply with their wishes. Those days are over.
Find a more productive way to channel ECB liquidity into sovereign debt, rather than going through banks, and wanting to control them with FTT. It's starting to sound like a farce to say that the ECB won't be bailing out sovereign debt. You are not fooling anybody.
ET friends, should I do a blog on this, or not? What do you think?
http://www.express.co.uk/posts/view/290946
Express.co.uk - Home of the Daily and Sunday Express | UK News :: Germans beg us to stay in the EU
Is this an olive branch from Germany to the UK? Will the Germans drop FTT to get the UK back into the new fiscal pact? Encouraging step in the right direction, if this story is true and meaningful. This is just what the Germans should do, drop FTT now for good. The choice is simple, keep the UK in the EU - supporting the euro zone - or lose UK support.
Express.co.uk - Home of the Daily and Sunday Express | UK News :: Germans beg us to stay in the EU
Is this an olive branch from Germany to the UK? Will the Germans drop FTT to get the UK back into the new fiscal pact? Encouraging step in the right direction, if this story is true and meaningful. This is just what the Germans should do, drop FTT now for good. The choice is simple, keep the UK in the EU - supporting the euro zone - or lose UK support.