Stock Tax May Reduce Volume 90%, Interactive Brokers CEO Says http://www.businessweek.com/news/20...e-volume-90-interactive-brokers-ceo-says.html
There have been articles like that on Geitner since he first started on the job. However, I do think it's just a matter of time before Geithner is history. I do believe that Obama will keep him on at least through the November elections, as many political analysts have stated. I don't see any way possible that Geithner stays beyond that. But then again, with the Obama arrogance, it's possible he could stay on for much longer. If Obama were to fire Geithner right now, it would do even more political damage to the Democrats going into the Nov. elections. It would also cast Obama in a very negative light, right at the time where our economy is still attempting to slow crawl out of the most intense recession we've experienced in decades. Besides, the House & Senate are so backed up already with health care, financial regulation, climate legislation, not to mention allowing them time to campaign for their re-elections in Nov., etc....., I can't see Obama piling on by having Congress interview, and hold confirmation hearings on a new Treasury Secretary at this time. As it stands right now, the Democrats expect to have their asses handed to them in the Nov. elections, with some pollsters expecting the GOP to pick up at least 7 Senate seats, and have a great opportunity to actually win the majority in the House. As long as Geithner stays on through the summer, and while the U.K elects a new Prime Minister, and we have the IMF report/G-20 meetings, we should be fine. It was a good thing that Geithner's testimony came on the same day as the State of the Union address, as it took some steam out of the coverage. Since that day, (IMO) there hasn't been as big a media explosion over this as there could have been. I very much believe that the Obama administration planned it out that way by having both on the same day. The Congressional committee that questioned Geithner were probing very hard to find that smoking gun.. They didn't find it, at least not yet.
I'm not sure I see why Bernanke is in the clear here (Time magazine 'person on the year') whilst Geithner is the fall guy. Whatever involvement the Treasury had with AIG, the Fed was right there with them. But I'm no expert on US politics, although its puzzling why Geithner has so many enemies. He seems a bit 'shifty', but then again, so does Bernanke.
Darling at breakfast: cold coffee and the steely calm of the incumbent ... Only when prompted did he mention the idea of a financial transactions tax. This remains on the table but it is clear the UK government has now focused itself on "achievable goals", and the Tobin Tax is not one of them. It sees the Obama administration, the EU and Japan each charging off in a different direction and is determined to be the last man standing when it comes to insisting on the minimal global solutions already agreed. http://www.bbc.co.uk/blogs/newsnight/paulmason/2010/01/darling_at_breakfast_cold_coff.html
I just watched the entire Sarko speech in Davos. The Tobin tax part is like 15sec in a 50 min speech: " We won't elude the debate on transaction tax(...) and I support Gordon Brown". He seemed a bit embarassed and wasn't talking loud about it to say the lesat. I think he knows the debate is more on the regulatory field now. The only thing that really bother me in his speech is that he is convinced that it is really easy to make money "speculating "on the markets. On the banks: " they have lost their role, why would they work hard lending money when it is so easy to make gigantic profits speculating". In my book it is easier to study one's situation, lend him money if he's serious and sit on your fat ass collecting interests, than continuously make an option market for example...But whatever... He wouldn't last a month in the market... I would even fund his mini forex account just to watch his demise in real-time.
Stock Tax May Reduce Volume 90%, Interactive Brokers CEO Says Share Business ExchangeTwitterFacebook| Email | Print | A A A By Nina Mehta and Whitney Kisling Jan. 29 (Bloomberg) -- Taxing equity trades may reduce U.S. stock market volume by 90 percent, Interactive Brokers Group Inc. Chief Executive Officer Thomas Peterffy said. A transaction tax was first discussed in February and revived in December, when Iowa Senator Tom Harkin and Oregon Representative Peter DeFazio said it is the âmost painless wayâ to fund the governmentâs deficit and curb speculation. French President Nicolas Sarkozy said Jan. 27 that a European debate on the subject is unavoidable. âThe mother of all creators of havoc on Wall Street is this looming transaction tax,â said Peterffy, who is also president of the brokerage and automated market-making company, in an interview yesterday. Interactive Brokers is based in Greenwich, Connecticut. âTrading volumes would plunge by about 90 percent, markets would become illiquid and tens of thousands of people would lose their jobs.â Sending a fee to the government for every transaction would hurt asset managers, brokerages and so-called high-frequency traders, a group that accounts for 61 percent of volume, according to New York-based research firm Tabb Group LLC. Interactive Brokers handles about one-seventh of U.S. options that change hands. An average of 10 billion shares has traded each day on U.S. exchanges since the beginning of 2009, according to data compiled by Bloomberg. $5.93 Trillion The debate follows the biggest U.S. stock market rally since the Great Depression. The Standard & Poorâs 500 Index jumped 70 percent between March 9 and Jan. 19, restoring $5.93 trillion to American equity markets. It has fallen 5.7 percent in the past two weeks as President Barack Obama proposed limiting the size of financial institutions and their proprietary trading. The proposals from Harkin and DeFazio, both Democrats, would impose a fee on transactions of stocks and derivatives, aiming to raise money for economic stimulus plans. The U.S. governmentâs budget deficit in the fiscal year that ended Sept. 30 was a record $1.42 trillion. Sarkozy joined U.K. Prime Minister Gordon Brown and German Chancellor Angela Merkel in supporting a tax on trades. In Europe, the money raised could be used to fund climate measures or aid for poor nations, Sarkozy said. He leads the worldâs fifth-largest economy. âWacky Ideaâ âAs leaders and intellectuals throughout the world endorse a tax, that makes it seem more reasonable and less like the wacky idea it is,â said Dan Mathisson, head of the Advanced Execution Services unit at Credit Suisse Group AG in New York. âAnd if other countries are willing to consider a tax, it becomes more realistic that it could pass in the U.S.â DeFazioâs proposal would put a tax of 0.25 percent on stock transactions and 0.02 percent on derivatives including futures, options, swaps and credit-default swaps. A transaction of 200 shares at $40 each would result in a $20 tax, compared with a commission of $1 for active traders at Interactive Brokers, Peterffy said. The billâs sponsors have âno understanding whatsoeverâ about its likely effect, Peterffy said. To contact the reporters on this story: Nina Mehta in New York at nmehta24@bloomberg.net; Whitney Kisling in New York at wkisling@bloomberg.net.
I think we're winning this battle... I'm not sure how Ron Paul is viewed in US but I dug up a nice quote which I've added to Wikipedia:- "The United Nations remains determined to rob from wealthy countries and, after taking a big cut for itself, send whatâs left to the poor countries. Of course, most of this money will go to the very dictators whose reckless policies have impoverished their citizens. The UN global tax plan...resurrects the long-held dream of the 'Tobin Tax'. A dangerous precedent would be set, however: the idea that the UN possesses legitimate taxing authority to fund its operations."
Article that says HFT is bad so introduce a transactions tax. Comment section available. moneymorning.com/2010/01/28/volcker-plan