What a surprise. Democrats want to raise taxes. Hell, why not make it 1.00%? Or 5%? Think of the revenue that would raise, since in their world taxes don't affect people's conduct.
So if liquidity providers have to pay a .25% transaction on every trade, doesn't this mean that all bid/offer spreads will have to be at least 0.5% wide just so the market maker can make enough profit to pay the taxes?
the scary part is the statement in paragraph three: "speculators and investors who are principally responsible for having caused this avoidable financial crisis" OMG .....where do you start??....they cant all be that clueless...OMG
Yes, they can be that ignorant. Gentlemen, these people don't read their own legislation. They only read summaries, written by someone else. And that statement above is a gross, poorly-aimed, summarized, sweeping generalization of investors and traders. If the people had any power at all to fire these jerks, we could be as general and proclaim that all politicians are swindlers who steal from taxpayers and shit on them when they ask questions.
Well, if a trader is only marginally profitable, this tax would be a killer and also cripple established traders. Here is an example: A marginal trader makes one round trip, buy and sell or short and cover each trading day. The trade size is $10,000. The tax is $50 for the round trip, $25 in, $25 out. There are about 235 trading days a year. So $50 times 235 days equals a staggering $11,500 of transaction taxes for the year. This marginal trader is out of business...:eek: Is this correct or am I losing my mind?
Guys, just because a handful of these yutzes sent a letter doesn't mean it'll find its way into the bill. Think of how hard it would be to implement and how much delay it would add to the bill's signing. For those 2 reasons, it won't make it in.
Good thread. Interesting development. Not to be underestimated. I wouldn't be surprised to see any series of steps taken to decrease the participation of short term, parasitic traders. Democrat's hate us. One of biggest worries is a ban on index futures trading. We're in de facto violation of the no-short rule. We're a also a LEVERAGED-bad attribute in 2008 lexicon-low margin trader. We're too speculative and at the end of the day we don't inventory big enough positions over night to make a strong-good for liquidity- argument. As we all know the NYSE closed for a couple of years at the begining of WWl. Those us us who remember the Congressional hearings after the 1987 Crash can recount the absolute assault futures and options took in the blame game targeting "program trading" and portfollio insurance." To put things in perspective for the younger guys-those afore mentioned terms were as big in the news then as the words sub-prime are now. Alan Greenspan spoke in defense of futures. He was VERY respected for his conduct the week of the crash (the market quickly recovered from it's lows) and he gave impassioned, reasoned analysis as to the valuable goal risk transferance played in October/87.