Excerpt from the article: [French President] 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.
I dont think the tax will happen. But the exchanges should have relocation plans in place. Trading is now electronic and can be done from anywhere. 15 years ago the exchanges relied on floor trading, but no anymore. It cant be that hard to move the Globex servers to a tax friendly location.
Regarding CFD's..exactly... In the US they'll just package sector trades as a basket derivative or an exotic swap on some single equity and only the big guys will trade with size and avoid the tax.
It is clear to me our European "leaders" are completely uneducated as to the effectiveness and the long-term effects of such a tax. Let's hope the Swedes can talk some sense into these idiots.
In Europe the conservatives are more leftist than the liberals in the USA. In Germany the financial transaction tax has been proposed by the Communist Party (PDS) for years. Then chancellor Merkel adapted the idea for populistic reasons, just like Sarkozy in France to make friends with his left opponents.
Just move them to Switzerland, they will be happy to make their financial center even stronger. Huge Hedgefunds already did this, and talks about moving parts of London's City are heard after Obama's last plan. Switzerland (no European Union country) has a huge opportunity to capitalize on these idiot plans. My guess is that in the near future, we will trade the SMI-future instead of the DAX or ES (which is already possible for IB clients).
How do you come up with 50% ? If the proposed tax is implemented as is, then all program trading must halt at once. It is known that 70% of all US stock trading volume are related to program trading. There is also 15% average volume on stock trading in US where the positions are closed within 5 to 10 days. No adjustment can be made in the market making bots to handle net negative flow impact.
I am assuming that the tax would not be implemented without an exemption for market makers. In other words, the "tax on Wall Street" will, in fact, exempt "Wall Street" and be targeted at "Main Street" investors/traders. This would permit a significant amount of program trading to continue. But if Petterfly was addressing the DeFazio proposal "as is," then I suppose he's right.
If this tax proposal as written passes, there will be a large exodus of all sorts out of the US and I will be among them. There are plenty of countries that will be glad to get the financial markets that the US losses.
the problem is not the actual day/short term traders, all they do is add to market efficiency. by punishing them with this tax, the government is removing market efficient from its system and out of this country. what a bunch of fucking idiots, and trying to regulate the big banks is also a retarded idea, because it's impossible to accomplish by a massive government entity. All the govt needs to do is break up the too big to fail banks into smaller ones, then the banks can leverage all they want, and when the bad ones fail, it will not matter no bailout needed, just a drop in a bucket, market darwinism at its best. But of course the govt is too chicken shit to do this, instead they will create boxes of new regulations that the bank will bypass in no time, and punish the evil daytraders. why is this country so fucked up...