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

[tomdavis]

Quote from piezoe:

I will not accept arguments, in the present case, based on prediction of future politics, nor ad hominem arguments, of course.

I am an advocate of the tax implemented in the way Tobin intended it.

As a means of raising money, it is a terrible idea. As a means of cleaning up the market, it's brilliant. It must be set very low and at just the precise level to do great good and virtually no harm.

I will change my mind instantly if anyone can present a logical counter argument without rejecting the assumption that HFT poses a greater risk to the market than benefit.
_______________________
"Common wisdom is usually wrong." -- Gore Vidal

No one is proposing implementing the FTT in the way Tobin intended it. In fact, Tobin said the tax should be limited to currency markets only. I haven't seen that proposal yet.

Berkeley Economics Professor, Barry Eichengreen, knew Tobin well and co-wrote several published research papers with the Nobel Prize winner. Regarding James Tobin and the Tobin tax, Professor Eichengreen recently said: “James Tobin was a friend of mine, my mentor, and, for a brief privileged period, coauthor. Tobin would not have been pleased to see his proposal repurposed in this way.”

"If the aim is to augment revenues, a Tobin tax is the wrong tool. Indeed, Tobin designed it to solve an entirely different problem: excessive volatility in currency markets. By discouraging foreign-exchange transactions, Tobin’s proposal sought to promote exchange-rate stability by preventing national currencies from coming under speculative attack."

What does Tobin's original proposal have to do with taxing stocks and bonds? Nothing.

Professor Eichengreen continues:

"European leaders sometimes extend Tobin’s logic from the currency market to financial markets generally. An across-the-board tax on transactions, they argue, would dampen financial volatility. But the logic behind this conclusion is lacking . What we know is that a tax on transactions would result in fewer transactions. Some investors would exit the market. But which ones – the opportunist speculators, who sell when everyone else is selling, or the contrarian speculators, who do the opposite and stabilize volatile markets?

Maybe a Tobin tax is intended to shrink Europe’s bloated financial sector. In that case, it is, once again, misdirected. Europe’s problem is its banks, which are too big to fail – and also too big to save. A Tobin tax would do nothing to shrink them. On the contrary, by discouraging trading in securities, it would encourage investors to shift their funds into bank accounts and certificates of deposit."


http://www.project-syndicate.org/commentary/europe-s-tobin-tax-distraction#UwWFsaemTbkKqh02.99

http://financialtransactiontaxes.com/

 

[FightTheFuture]

Austan Goolsbee served under President 0bama as a member of the Council of Economic Advisers and as chief economist of the President’s Economic Recovery Advisory Board.

Goolsbee speaking on transaction tax:

“Tobin himself was my adviser when i was an undergraduate, my hero and mentor. Tobin himself would often say, ‘Well I don’t know if it exactly could work.’

http://www.youtube.com/watch?v=mv40euWrai4

 

[piezoe]

That's true. Tobin wanted it to stabilize currency markets. I want it to stabilize equity markets, to drive the subpenny boys off the exchanges, i.e., those clever folks responsible for a 600 point loss in 5 minutes. Now there are many complicated ways to tackle that problem, and one very simple one -- A tiny transaction tax, trivial to implement, highly effective. Let there be no tax at all on the first 1000 trades in any 24 hour period. But after 1001 trades you're taxed on all of them going back to the first trade. You can trade with each other all you want, just stay off the exchanges please.

The problem with you folks is that none of you simpletons have any imagination.

I have nothing against HFT folks. I just don't want to get a call from my broker to tell me they sold me out only to learn that the market recovered its entire loss two minutes later.

I'm still waiting for that logical argument by the way.

 

[TraDaToR]

Let's not get in arguments everytime a "trader" posts in favor of FTT here. I read some of Piezoe's previous posts on ET, looking for some "gems". To my disappointment, there is strictly nothing of interest in his posts, good or bad. It's just completely empty.

http://www.valuewalk.com/2013/06/european-financial-transaction-ftt-tax/

 

[sheda]

Quote from piezoe:
The problem with you folks is that none of you simpletons have any imagination.

We are responding to the proposed legislation, you know the one that would be in action in less than 8 months if it went unchallenged? There is really no place for imagination when doing so, as we know those designing it are economically illiterate and arent out to make the market a better place just for you to get your orders filled.

 

[justrading]

Quote from sheda:

We are responding to the proposed legislation, you know the one that would be in action in less than 8 months if it went unchallenged? There is really no place for imagination when doing so, as we know those designing it are economically illiterate and arent out to make the market a better place just for you to get your orders filled.

But he does have wonderful imagination.

I have not seen any legislation on either side of the Atlantic, either enacted or proposed, that even remotely resembles what he suggests.

But he imagines that he and his ilk can persuade politicians in all those countries to drop what they have drafted or enacted and adopt what he suggests. He imagines he and his ilk would have more influence than all the unions and special interest groups and misguided members of the public. More influence than Huffington Post and other media in favour of the FTT.

That's the kind of imagination you need to write the Harry Potter series.

Unfortunately I don't have it. Maybe if I took some LSD or something, but not in my normal frame of mind.

 

[bwolinsky]

Just came in here to check in.

First two sentences on the previous page caught my eye.

Piezoe on ignore. Total Moron, nor a trader that should be here.

 

[bwolinsky]

Here's why:

Quote from piezoe:

I will not accept arguments, in the present case, based on prediction of future politics, nor ad hominem arguments, of course.

I am an advocate of the tax implemented in the way Tobin intended it.

This statement ignores Financial Economy and Macroeconomic and International tenets of Finance, which is why the uninformed should not engage in this "debate."

There should be no Tobin Tax because it destroys wealth.

If you disagree that this is a bad thing any other along this line of thinking is:

You guessed it, a "Total Moron."

 

[TraDaToR]

I don't remember if it has been posted. ICMA Report on the consequences on the repo market at the end of this article:

http://www.mondaq.com/unitedstates/...Financial+Transaction+Tax+And+The+Repo+Market

 

[zdreg]

Quote from bigskyguy:

piezoe

Registered: Jan 2006
Posts: 5033






I will not accept arguments, in the present case, based on prediction of future politics, nor ad hominem arguments, of course.

I am an advocate of the tax implemented in the way Tobin intended it.

As a means of raising money, it is a terrible idea. As a means of cleaning up the market, it's brilliant. It must be set very low and at just the precise level to do great good and virtually no harm.

I will change my mind instantly if anyone can present a logical counter argument without rejecting the assumption that HFT poses a greater risk to the market than benefit.
_______________________
"Common wisdom is usually wrong." -- Gore Vidal



just do the math on a .01 tax (as has been pointed out a million times on this thread) let alone a .03 which that idiot Defazio has inroduced....HFT is a far less of a worry than the transaction tax..
Those idiots will never introduce it at a low enough number where it would work like you think it would.

As others have correctly noted here,all of us are done if it is introduced here. Wake up, man.

".HFT is a far less of a worry than the transaction tax."

the hft is not a problem at all if you know how to trade. the ftt will put you out of business.