Funny! Jack Welch is probably in a boardroom with Obama and Co. drawing up the details and determining a launch date. You didn't actually think CNBC was an "independent" news station, did you?
That will last about as long as it takes people to figure out that they are getting screwed. The average person will see their mutual fund fees rise, and any self-directed swing or position traders will see their commission costs rise by a factor of 5. That's not "getting the daytraders", that's getting the public. There are a lot of people that have their own trading accounts, and most of them are not daytraders, they are average Joes. Every single one of them is going to have a massive hate-on for Obama if this passes. With the thin margins of victory in any election these days, that's not good news for the Dems. 90% of the country is already decided in terms of who they vote for anyways. It's the middle class swing vote that matters. The types of people that have their own trading accounts, especially now that they are trying to do stuff on their own since getting slaughtered in their funds last year. I know a few people like that. Once they figure out what it is, against it. A stock trade that now costs $10 to buy 1000 shares of a $50 stock is now going to cost $50,000 x 0.001 + $10 = $60. That is SIX TIMES the normal commission cost. This is going to be popular? Every person with a self-directed account is going to vote Republican if this passes. And anyways, how do you propose to exempt Goldman Sachs from this bill? Or do you seriously think that GS is going to pay this tax? If they pass the bill and give GS an exemption, can you see the public firestorm over this? Small investors pay tax, big wall street firms don't. That will go over like a lead balloon. Besides, GS and other big firms need some retail idiots to take the other side of their trades. Higher taxes = less retail idiots trading = lower volume = smaller position sizing possible = lower profits. Sure they could manipulate the markets a bit easier maybe, but I'm not sure that would make up for the volume shortfall. Less retailers trading = harder markets as well, since more dummies are being removed, thereby raising the average intelligence per capita in the market. I really don't see how this benefits one damn person. It's quite probably one of the stupidest bills I have ever heard of. I doubt it, but there are other creative ways they could try to get money that aren't this. There are plenty of other places to trade in the world, even if they are dumb enough to pass this. Some country somewhere is going to have an exchange that will want your business in exchange for not taxing you, so I wouldn't worry about it. In bad times every country is going to be looking out for itself, and if the US is stupid enough to cede their place as the financial capital of the world, someone else will want to take it.
Trader Tax story as shown on cnbc. Everyone said the tax was really small. That small tax will put traders, including YOU, out of business. Erin Burnett calls it a "tantalizing idea". She wants to use it for deficit reduction. Email Erin Burnett. http://www.cnbc.com/id/15840232?video=1237311925&play=1 "If you want to sell at 1:00 and sell at 1:30 that would be deterred" - Dean Baker ERIN BURNETT SAYS SHE WANTS TO STAY ON THE STORY. THE MORE AIRING THIS GETS THE MORE CHANCE IT WILL PASS. EMAIL BURNETT & TELL HER YOUR FEELINGS.
They will initially sell this as a tax on GS and the public will buy it. The GS exemptions will come a little later, most likely though accounting trickery or some loophole in the law. CNBC is pumping this as a tax on GS. That is something the public will buy. Once it's on the books and they figure it out it will be too late. As for trading worldwide you will have to take up residence in the country you want to trade. If you trade the Asian markets, for example, you might have to do it from somewhere in the area of Mongolia. Even that may not help because the IRS can chase you around the globe looking for their money if you are a US Citizen. Votes may kill the tax but that is debatable. The only true thing that will stop this is if it will really make the US markets less competitive and cause investment capital to exit the country. I think both of those things will occur if it passes.
Which is exactly why it won't pass. The public issue is one thing. Let's say they deal with that. But the reality is that it will seriously hurt the US markets, and I don't think that anyone is going to be stupid enough to pass a bill that is actually counter-productive and hurts more than it helps. DeFazio may be a mental retard along with a few media idiots on CNBC, but there are actually some people in government who aren't THAT dumb.
I think it was Switzerland (?) who saw something like a 35% drop in investment capital once they passed their tax. They eventually had to withdraw it, to the best of my recollection. Hopefully the US has been paying attention but deperation for tax revenue can cause you to do stupid things.
This was a disturbing report, because the guy who was supposedly against the tax was very weak. I sent an email to streetsigns, and I suggest you all do the same. OldTrader
It is highly disturbing with CNBC and Fox when these anchors thinks this transaction tax is no big deal. In trader Vic's book, he ominiously mentioned that the freedom to trade might be taken away in the future. Why not let the Democrat's do whatever they want, and just let the US self destruct. Maybe we can start over with a new Gold standard. From ashes new life can begin.
no way in hell this gets passed if the big boys get an exemption. now if there are no exemptions for anybody the market could tumble back down to new lows with spikes in volatility because of a lack of liquidity. catch 22 for the government they cant win. and as a retail trader if i am paying 10bux a trade they want to spike that 5 fold. yeah im loving that idea, hard enough to make a buck in this market now your gonna jack up fees. my arms are getting tired from tredding water because my govt wants to keep throwing me back in the deep end.