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Green on the 1/4% Trading Tax
- Thread starter ProfitTakgFool
- Start date
Quote from cybtropic:
Unfortunately I believe that this tax might have a very good chance of passing.
Reason? Negative sentiment against wall street is so high now, there may be little opposition to it. Why? Because all those who you think would lobby against it, will actually lobby to get exemptions from it!! (hedge funds, big institutions)
They (Hedge Funds, Inst.) may do that but in a way they would be shooting themselves in the foot. If the speculators move away, these hedge funds won't be able to get in & out as easily. Liquidity will dry up - and it'll hurt them in the end.
I put this in the other thread (and regretted it for it was way to buried under)
Some of us have been active in trying to get our voice out there.
Don't dismiss this out of hands folks, as it was not that long ago congress pass a high tax on luxury boats. This was another one of those feel good stick it to the rich taxes. End result?? Bunch of average joe boat workers were laid off with a net reduction in taxes.
This kind of BS can get passed and logic and reason seldom come into play with people who vote on things that they have no idea about and they sure don't care about.
The real problem that I see is that two out of three comments are basically in support of the idea. In the NY Times article almost all the comments that I could see was in support. Granted the average person cant balance their checkbook much less understand how the markets work but that doesnt mean they are not allowed to voice an opinion and vote.
http://seekingalpha.com/article/114...reduce-liquidity-on-u-s-markets-terrible-idea
Why is it that people with no understanding of financial markets feel compelled to offer solutions to what they perceive as problems?
This recent New York Times opinion article suggests that a transaction tax to reduce liquidity of US markets would be a good thing. Not so. People from all over the world use the US markets precisely because of the high liquidity and small transactional costs, ultimately to the benefit of the American economy. The stock exchanges, brokers, market participants, retirement funds, large investors, and mom-and-pop investors all reap the rewards of one of the most welcoming markets in the world. Clearly, the long term consequences of a transaction tax have not been considered. With this transaction tax, all investors, from the large institutions to the mom-and-pop hundred share lots, would pay more upon buying and receive less upon selling.
As an example, compare three or four stocks that trade between 100,000 to 500,000 shares per day with stocks that trade 5 million shares per day. First, you will notice that the bid and ask spread is much larger and thinner in the lower volume stocks. Second, you will find that when there is a large buy or sell order, the price of the stock moves proportionately further than with the higher volume stocks. Obviously, those in favor of the tax have not realized the magnitude of this indirect transactional cost. Even scarier, the stress of these additional costs to investors could drive their interests to the markets of other countries. New York is already faced with stiff competition from London and other locations that would love to have the markets we now enjoy. Do we really want more layoffs and higher office vacancies in New York City? How about Chicago?
I am also troubled by the notion that participating in the markets is a nonproductive activity. It's akin to saying that a journalist is engaged in a nonproductive activity or being a soldier is a nonproductive activity. Providing companies with easy and inexpensive access to working capital is, in my mind, extremely productive and crucial to a healthy capitalist economy. The increased cost to those investing in American companies would also be passed to the consumer, yet another negative economic consequence not mentioned in the Times opinion article.
What we need now is an intelligent discussion of how we can increase wealth in this country without taxing business sectors out of existence, especially businesses that lubricate the wheels of wealth building to promote capitalism. If we destroy what is left of the free market in the United States, what will be left to pass along to our children besides mountains of debt?
Let us not be so quick to ââ¬Åtax the other guyââ¬Â as we all know what goes around comes around in an environment that is seeking to punish someone else.
Some of us have been active in trying to get our voice out there.
Don't dismiss this out of hands folks, as it was not that long ago congress pass a high tax on luxury boats. This was another one of those feel good stick it to the rich taxes. End result?? Bunch of average joe boat workers were laid off with a net reduction in taxes.
This kind of BS can get passed and logic and reason seldom come into play with people who vote on things that they have no idea about and they sure don't care about.
The real problem that I see is that two out of three comments are basically in support of the idea. In the NY Times article almost all the comments that I could see was in support. Granted the average person cant balance their checkbook much less understand how the markets work but that doesnt mean they are not allowed to voice an opinion and vote.
http://seekingalpha.com/article/114...reduce-liquidity-on-u-s-markets-terrible-idea
Why is it that people with no understanding of financial markets feel compelled to offer solutions to what they perceive as problems?
This recent New York Times opinion article suggests that a transaction tax to reduce liquidity of US markets would be a good thing. Not so. People from all over the world use the US markets precisely because of the high liquidity and small transactional costs, ultimately to the benefit of the American economy. The stock exchanges, brokers, market participants, retirement funds, large investors, and mom-and-pop investors all reap the rewards of one of the most welcoming markets in the world. Clearly, the long term consequences of a transaction tax have not been considered. With this transaction tax, all investors, from the large institutions to the mom-and-pop hundred share lots, would pay more upon buying and receive less upon selling.
As an example, compare three or four stocks that trade between 100,000 to 500,000 shares per day with stocks that trade 5 million shares per day. First, you will notice that the bid and ask spread is much larger and thinner in the lower volume stocks. Second, you will find that when there is a large buy or sell order, the price of the stock moves proportionately further than with the higher volume stocks. Obviously, those in favor of the tax have not realized the magnitude of this indirect transactional cost. Even scarier, the stress of these additional costs to investors could drive their interests to the markets of other countries. New York is already faced with stiff competition from London and other locations that would love to have the markets we now enjoy. Do we really want more layoffs and higher office vacancies in New York City? How about Chicago?
I am also troubled by the notion that participating in the markets is a nonproductive activity. It's akin to saying that a journalist is engaged in a nonproductive activity or being a soldier is a nonproductive activity. Providing companies with easy and inexpensive access to working capital is, in my mind, extremely productive and crucial to a healthy capitalist economy. The increased cost to those investing in American companies would also be passed to the consumer, yet another negative economic consequence not mentioned in the Times opinion article.
What we need now is an intelligent discussion of how we can increase wealth in this country without taxing business sectors out of existence, especially businesses that lubricate the wheels of wealth building to promote capitalism. If we destroy what is left of the free market in the United States, what will be left to pass along to our children besides mountains of debt?
Let us not be so quick to ââ¬Åtax the other guyââ¬Â as we all know what goes around comes around in an environment that is seeking to punish someone else.
Quote from rwk:
to get some useful information about what I might do (besides writing my congressman)
these guys are under severe influence of perverted economic education, and total lack of the real one and/or some/any.
that's why they never really learn, and repeat their huge mistakes again and again, on the regular basis.
the totally destructive character of their actions usually revealed only in 20/20 hindsight fashion.
even recognizing (sometimes) their total failures after the fact, the famous inevitable "blame game" starts.
nothing helps, and nothing new.
dead cycle just starts -- gov't biz "as usual"
only their PERSONAL financial losses could educate them faster. unfortunately, their payments/benefits are not related to the performance, and even the definition of "performance" is serverly injured.
wall street is almost dead. if feds pass this new daytrading tax it confirmes the evidentiary fact of death of the patient for sure. this is the KEY MEASURING POINT.
rippling effect is HUGE, and affects ALL MATERIAL nature of businesses, areas of interests, consumption, demand, and importantly, price setting ON EVERYTHING.
they better tax this f*ck and persons of similar nature:
http://www.bloomberg.com/apps/news?pid=20670001&refer=columnist_reilly&sid=ag..fL1BCuXo
what about fixing his errors out of his personal assets?
our game, trading, is much more tough, and we risk our own money, plus paying huge taxes.
interestingly, the above f*ck is free to go, without empting all his pockets.
i will not be surprised if even Madoff gonna be set free in the absence of "corpus delicti".
we don't have good lawyers on our side
Jan. 16 (Bloomberg) -- Kenneth Lewis gambled big. He lost. Now taxpayers have to pick up his tab.
For that, the Bank of America Corp. chief executive officer probably needs to go. At the very least, Lewis, who also is chairman, should give up one of his posts to bring greater accountability to the bank.
Not because one specific bet, Merrill Lynch & Co., is souring. Lewis could be forgiven if that were his only misstep.
Itâs not. Since the crisis began, Lewis has misjudged the depth, breadth and severity of the storm that has crushed the global financial system. In doing so, he used capital that he should have been husbanding.
If he had been more prudent, BofA may have been able to complete the Merrill Lynch transaction without government help. Or BofA might never have done the deal, and others, in the first place.
Now the Charlotte, North Carolina-based company is staring into the abyss. The bankâs stock fell about 18 percent yesterday following reports that it told the government in December that it wouldnât be able to close the Merrill deal without assistance because of bigger-than-expected losses at the brokerage.
The government may now have to inject more capital into the company or backstop losses on a portion of its assets, or some combination of the two. The government has given Citigroup Inc. a similar guarantee against losses on some assets, although that hasnât kept investors from fleeing its stock.
Really Different
In some ways, itâs easy to see how Lewis stumbled. After all, when people say, âItâs different this time,â it almost certainly isnât.
So Lewis acted as if the crisis would mirror past recessions. He looked to use BofAâs once-strong balance sheet to capitalize on othersâ weakness.
Aggressive moves like that are what give businesses the edge once economic clouds part. Remember that in the 1930s predecessor banks to todayâs BofA profited from picking up institutions that failed during the Great Depression.
The problem: It actually is different this time. Even if the economy suddenly pulls out of its tailspin, the financial system and the banking business model are forever changed. What they will look like even a year from now isnât known.
Lewis didnât seem to pay enough heed to this. In January 2008, he agreed to buy hobbled mortgage lender Countrywide Financial Corp., saving it from what many investors figured would be an inevitable bankruptcy filing. Then, as economic, housing and banking conditions worsened during the spring, Lewis refused to scupper the purchase or force a renegotiation of the terms.
Paying a Premium
The result? Last July, BofA closed the deal. It paid $2.5 billion in stock, even though BofA later said Countrywideâs net assets were worth just $100 million.
The transaction was completed using a structure that may have limited BofAâs exposure to at least some Countrywide liabilities. Later in the summer, Lewis did an about-face and backed Countrywideâs debt, exposing BofA to problems lurking on its books.
Lewis also held BofAâs dividend steady for the first nine months of 2008, after other banks had cut their payouts. While the bank announced in October that it would halve the quarterly dividend to 32 cents a share, BofA should have cut deeper, faster and earlier to conserve capital.
Lewis again moved aggressively in September, snapping up Merrill Lynch as Lehman Brothers Holdings Inc. was sinking into bankruptcy and the financial system teetered. A bold move, for sure, and one that made some strategic sense for BofA. Mounting losses at Merrill have put BofA in a bind, though.
Reverse Moves
On top of all this, Lewis twice in 2008 increased BofAâs stake in China Construction Bank Corp. The second time, in November, BofA shelled out $7 billion.
Lewis has made some moves in the other direction. In October, he raised $10 billion through the sale of new stock. And in January, he backtracked on China Construction and sold $2.8 billion of BofAâs stake in the Chinese bank.
That wasnât enough. With his earlier moves, Lewis had increased his bet that things wouldnât be different this time. That has proven a colossal misjudgment.
BofA investors have suffered for it, watching the bankâs stock fall almost 80 percent the past 12 months. Taxpayers are about to share in their woe.
Now Lewis needs to pay a price himself.
(David Reilly is a Bloomberg News columnist. The opinions expressed are his own.)
To contact the writer of this column: David Reilly at dreilly14@bloomberg.net
Last Updated: January 16, 2009 00:01 EST
http://www.bloomberg.com/apps/news?pid=20670001&refer=columnist_reilly&sid=ag..fL1BCuXo
what about fixing his errors out of his personal assets?
our game, trading, is much more tough, and we risk our own money, plus paying huge taxes.
interestingly, the above f*ck is free to go, without empting all his pockets.
i will not be surprised if even Madoff gonna be set free in the absence of "corpus delicti".
we don't have good lawyers on our side
Jan. 16 (Bloomberg) -- Kenneth Lewis gambled big. He lost. Now taxpayers have to pick up his tab.
For that, the Bank of America Corp. chief executive officer probably needs to go. At the very least, Lewis, who also is chairman, should give up one of his posts to bring greater accountability to the bank.
Not because one specific bet, Merrill Lynch & Co., is souring. Lewis could be forgiven if that were his only misstep.
Itâs not. Since the crisis began, Lewis has misjudged the depth, breadth and severity of the storm that has crushed the global financial system. In doing so, he used capital that he should have been husbanding.
If he had been more prudent, BofA may have been able to complete the Merrill Lynch transaction without government help. Or BofA might never have done the deal, and others, in the first place.
Now the Charlotte, North Carolina-based company is staring into the abyss. The bankâs stock fell about 18 percent yesterday following reports that it told the government in December that it wouldnât be able to close the Merrill deal without assistance because of bigger-than-expected losses at the brokerage.
The government may now have to inject more capital into the company or backstop losses on a portion of its assets, or some combination of the two. The government has given Citigroup Inc. a similar guarantee against losses on some assets, although that hasnât kept investors from fleeing its stock.
Really Different
In some ways, itâs easy to see how Lewis stumbled. After all, when people say, âItâs different this time,â it almost certainly isnât.
So Lewis acted as if the crisis would mirror past recessions. He looked to use BofAâs once-strong balance sheet to capitalize on othersâ weakness.
Aggressive moves like that are what give businesses the edge once economic clouds part. Remember that in the 1930s predecessor banks to todayâs BofA profited from picking up institutions that failed during the Great Depression.
The problem: It actually is different this time. Even if the economy suddenly pulls out of its tailspin, the financial system and the banking business model are forever changed. What they will look like even a year from now isnât known.
Lewis didnât seem to pay enough heed to this. In January 2008, he agreed to buy hobbled mortgage lender Countrywide Financial Corp., saving it from what many investors figured would be an inevitable bankruptcy filing. Then, as economic, housing and banking conditions worsened during the spring, Lewis refused to scupper the purchase or force a renegotiation of the terms.
Paying a Premium
The result? Last July, BofA closed the deal. It paid $2.5 billion in stock, even though BofA later said Countrywideâs net assets were worth just $100 million.
The transaction was completed using a structure that may have limited BofAâs exposure to at least some Countrywide liabilities. Later in the summer, Lewis did an about-face and backed Countrywideâs debt, exposing BofA to problems lurking on its books.
Lewis also held BofAâs dividend steady for the first nine months of 2008, after other banks had cut their payouts. While the bank announced in October that it would halve the quarterly dividend to 32 cents a share, BofA should have cut deeper, faster and earlier to conserve capital.
Lewis again moved aggressively in September, snapping up Merrill Lynch as Lehman Brothers Holdings Inc. was sinking into bankruptcy and the financial system teetered. A bold move, for sure, and one that made some strategic sense for BofA. Mounting losses at Merrill have put BofA in a bind, though.
Reverse Moves
On top of all this, Lewis twice in 2008 increased BofAâs stake in China Construction Bank Corp. The second time, in November, BofA shelled out $7 billion.
Lewis has made some moves in the other direction. In October, he raised $10 billion through the sale of new stock. And in January, he backtracked on China Construction and sold $2.8 billion of BofAâs stake in the Chinese bank.
That wasnât enough. With his earlier moves, Lewis had increased his bet that things wouldnât be different this time. That has proven a colossal misjudgment.
BofA investors have suffered for it, watching the bankâs stock fall almost 80 percent the past 12 months. Taxpayers are about to share in their woe.
Now Lewis needs to pay a price himself.
(David Reilly is a Bloomberg News columnist. The opinions expressed are his own.)
To contact the writer of this column: David Reilly at dreilly14@bloomberg.net
Last Updated: January 16, 2009 00:01 EST
Quote from Robert Weinstein:
What we need now is an intelligent discussion of how we can increase wealth in this country without taxing business sectors out of existence, especially businesses that lubricate the wheels of wealth building to promote capitalism.
Not possible with a congress that believes wealth comes from government and is openly advocating redistribution
If we destroy what is left of the free market in the United States, what will be left to pass along to our children besides mountains of debt?
I believe destroying the free market is the goal of the left, and what better tools to use than taxation and redistribution.
Sure, I'll write congress, but I don't believe they give a shit. Anyone who's been trading for awhile knows what type of effort and cost went into their game, as in any business..maybe even more so for traders. How many in this forum think the current congress gives a shit?
The tax, if implemented as described in the PDF link, ends my trading career, which has finally become profitable after nearly 6 years and 75k. I'm just a little guy...who pays my taxes...and my mortgage. I guess if they put me out of business I can default and get on the tit. And I can keep writing off my annual 3K for the next 20 years.
We can always trade forex as last resort because it is very difficult to tax. Worst comes to worst, we could open up an offshore account and trade aboard.
or, you can have dual citizenship, and trade futures internationally
i think the empty spots are always filled by more smart entities
so far, evasion of double taxation is pretty legal in this country
forex is good, but spreads usually are much better in futures market
i think the empty spots are always filled by more smart entities
so far, evasion of double taxation is pretty legal in this country
forex is good, but spreads usually are much better in futures market
Quote from lemeeeplay:
We can always trade forex as last resort because it is very difficult to tax. Worst comes to worst, we could open up an offshore account and trade aboard.