Financial speculation tax

[MovingTarget]

i don't think wall street is parasitic

it accounts for a large part of the GDP

That is part of why it is parasitic. Finance should not make up anywhere near that percentage of GDP, especially in a country such as the United States. Production, agriculture, and services are hurting because of what Wall St. and the major banks have done.

 

[cutforscience]

it's not only wall street's fault

look up federal reserve and alan grenspan on wikipedia for the lul

 

[MovingTarget]

it's not only wall street's fault

look up federal reserve and alan grenspan on wikipedia for the lul

Wikipedia isn't a good source for academic content or for lulz. Sure, the fed made mistakes, but they are not the overall cause of why we are in our current position. If we were still on the Gold standard, we'd be massively more fucked than we are now. That, however, is a topic for another thread.

 

[cutforscience]

putting a tax will probably lower economic output from the financial sector

we should just nationalize the bank, buy it half the price and threaten the bankers they will go to jail if they don't hand out the shares and make the banks smaller, then privatize them when the shares double lol

 

[cutforscience]

Wikipedia isn't a good source for academic content or for lulz. Sure, the fed made mistakes, but they are not the overall cause of why we are in our current position. If we were still on the Gold standard, we'd be massively more fucked than we are now. That, however, is a topic for another thread.

low interest rates = more speculation

more speculation = more risk

then

commodity shock = BOOM HEADSHOT

 

[MovingTarget]

low interest rates = more speculation

more speculation = more risk

then

commodity shock = BOOM HEADSHOT

I like your analogy. Colorful, simple, plausible...and WRONG. If you want to reign in speculation, particularly speculation on commodities, increasing interest rates isn't the way to go about it. That is a blunt instrument that adversely affects other major sectors of the economy.

 

[cutforscience]

they couldn't have sold those subprime mortgage to the poor fellas without a incredibly low interest rate dudeeeeee

 

[MovingTarget]

putting a tax will probably lower economic output from the financial sector

we should just nationalize the bank, buy it half the price and threaten the bankers they will go to jail if they don't hand out the shares and make the banks smaller, then privatize them when the shares double lol

Hold on there, Chavez. Trying to make Wall Street be more responsible within our economy doesn't mean we need to be raising the red flag. There are better ways to deal with this. A financial transactions fee would lower their economic output in the short term, but long term the economy would be better for it as it wouldn't have to be collateral damage from irresponsible short term investors/traders/speculators.

 

[cutforscience]

nationalizing and selling it is not communism, sherlock holmes

moreover they would have still sold those subprime mortgage to the poor fellas who couldn't even afford the pump

 

[MovingTarget]

they couldn't have sold those subprime mortgage to the poor fellas without a incredibly low interest rate dudeeeeee

"Dude", many people that qualified for a traditional 30-year mortgage were instead conned into subprime loans by unscrupulous bankers. The packaging of these flawed loans into CDOs and slapping a AAA rating on these instruments to con unwitting responsible investors had nothing at all to do with tanking the economy, right? What about overleveraging by the mortage firms and investment banks? How about removing the wall between commercial and investment banking? Are you really that clueless? You are trying to pin the tail on the donkey in an effort to find the simple cause/solution to the financial meltdown. You cannot ignore these complexities.

 

[MovingTarget]

nationalizing and selling it is not communism, sherlock holmes

moreover they would have still sold those subprime mortgage to the poor fellas who couldn't even afford the pump

It isn't socialism either, despite what people say about GM. It is, however, throwing the baby out with the bathwater. To blame this meltdown on the poor is asinine at best.

 

[cutforscience]

"Dude", many people that qualified for a traditional 30-year mortgage were instead conned into subprime loans by unscrupulous bankers. The packaging of these flawed loans into CDOs and slapping a AAA rating on these instruments to con unwitting responsible investors had nothing at all to do with tanking the economy, right? What about overleveraging by the mortage firms and investment banks? How about removing the wall between commercial and investment banking? Are you really that clueless? You are trying to pin the tail on the donkey in an effort to find the simple cause/solution to the financial meltdown. You cannot ignore these complexities.

Easy credit was the main cause of the crisis. People were seeing the price of their home rise because more idiots could afford to buy one with the creation of the subprime mortgages and then BOOOOOOOOOOOOOOOOOOOM. Yeah, it wasn't rocket science at all.

 

[CADsortaGUY]

How do you suppose we fix it then?

"it" being? Doesn't your question rely on buying the premise of the OP and his notion of wall street being parasitic and of no real value?

 

[piasabird]

I think in a crisis on wallstreet one of the biggest problems we have is trading firms that use large supercomputer that can process thousands of trades a minute. They can design computer programs that make trades so fast and trade such huge sums of money manye times a second every time the the stock prives moves. So the government should try to stop some of this by requiring a $1.00 tax on every stock trade. That way at least the government will be getting a piece of the pie, and this will take away some of the high speed advantages.

 

[cutforscience]

we should just jail the people who fuck other people and make the rich pay when they screw up

and the fed should do its job instead of serving alcohol to the banks until they fall off the cliff

 

[cutforscience]

I think in a crisis on wallstreet one of the biggest problems we have is trading firms that use large supercomputer that can process thousands of trades a minute. They can design computer programs that make trades so fast and trade such huge sums of money manye times a second every time the the stock prives moves. So the government should try to stop some of this by requiring a $1.00 tax on every stock trade. That way at least the government will be getting a piece of the pie, and this will take away some of the high speed advantages.

if you invest where there is real value, there is no advantage in being able to trade as fast as the light

 

[glenn1]

There's reasonably broad agreement that Wall Street has become parasitic - extracting wealth a lot as opposed to helping it get increased.

For one statistic, 70% of all trades done now are by computers done at high speed to try to take advantage of fast access to information to quickly make a little - a lot.

That has little to do with the purpose from society's point of view for stock markets to help capitalize businesses and grow the economy.

Whether talking about that or other activities, some sort of 'micro tax' to help discourage unproductive and even harmful actions might make sense. Europe seems to favor it:

http://www.commondreams.org/view/2011/06/11-1

So you hate Wall Street so much that you're willing to tank it with this tax even though it's basically the only sector in the economy making money and hiring people right now? Are you trying to put us into a second Great Depression and ensure Obama doesn't get re-elected?

 

[Darwin333]

3) Good point. The SEC (or similar body) needs to employ increased oversight over this type of trading too. The proposed tax/fee should go to that entity. As of right now, the role of the SEC is too limited in the markets and its oversight is nowhere near as effective as it needs to be. This proposal would help fix that.

They already have it and refuse to use it, please explain why more ways to not use oversight they have will help?

I agree with fixing this problem 110% but the SEC in its current state ain't it.

 

[Darwin333]

So you hate Wall Street so much that you're willing to tank it with this tax even though it's basically the only sector in the economy making money and hiring people right now? Are you trying to put us into a second Great Depression and ensure Obama doesn't get re-elected?

They are siphoning money, not making it. There is a really big difference between the two.

Exactly what do they provide to the economy with high frequency trading? Hell, they are already violating the rules as it is but because they are making money fucking people over we should let them be? Seriously?

 

[StarTech]

I believe the system will stay as it is. No taxes, no significant regulations. If any changes, they will be in the direction of enhancing profiting. I think I am realistic.

 

[Darwin333]

if you invest where there is real value, there is no advantage in being able to trade as fast as the light

The hell there isn't, especially when you are trading millions upon millions a day. Screwing someone out of a few pennies on each one of those trades adds up real quick, who gives a flying fuck about what you think "real value" is? Real value is money in the bank that I can spend right now, that is what they are siphoning off of damn near every trade YOU make. Investing long term is for suckers when you can add a small and relatively unnoticeable fee to the vast majority of trades made with little to no real risk (as long as the regulators nod their heads).

Do you think they do this shit for fun or something?

 

[cutforscience]

They are siphoning money, not making it. There is a really big difference between the two.

Exactly what do they provide to the economy with high frequency trading? Hell, they are already violating the rules as it is but because they are making money fucking people over we should let them be? Seriously?

they produce things, it's just that they are not physical things you can dig a hole into and start humping.

 

[Darwin333]

I believe the system will stay as it is. No taxes, no significant regulations. If any changes, they will be in the direction of enhancing profiting. I think I am realistic.

Unfortunately, I think you are right.

Thats why I say fuck it, we are gonna ride this train till it comes off the tracks and we have no intentions on slowing down.

 

[Darwin333]

they produce things, it's just that they are not physical things you can dig a hole into and start humping.

I will ask again, and it is a very specific question, exactly what does high frequency trading "produce" for the economy (other than money in their pockets)? Key word is "exactly", thanks in advance.

 

[cutforscience]

I will ask again, and it is a very specific question, exactly what does high frequency trading "produce" for the economy (other than money in their pockets)? Key word is "exactly", thanks in advance.

they produce services, which they can sell to anyone.