The Guardian - Making Wall St. Pay

It seems that for a while now that the Irish government, banks and economy are following American trends, except in the States they did the right thing and closed rotten banks and sent a few people to jail.

guardian.co.uk/commentisfree/cifamerica/2009/nov/09/us-wall-street-financial-transactions-tax

The problem I’d have is the transaction tax will go into the kitty and get spent just like everything else. When it comes time to need the money it won’t be there.

Also yes an awful lot of folks here need to go to jail and that’s just the ones in government.

And the same paper will complain loudly when borrowing costs, inevitably, go up.

So many seem to want 2006 back but without any of the stuff that gave it to them.

Amateur hour in the Grauniad. Financial firms in the UK are exempt from the 0.25% stamp duty. I actually agree with introducing a tax on sharetrading - but for completely the opposite reasons of the author.

The reason the financial firms are making so much is because of the over-trading of your average punter. Most stocks get bought and sold over TWICE each year. The government should introduce a tax on short term trading purely to protect punters from themselves. A tax on over-trading would have the added bonus of moving the clever financial chaps to more socially beneficial industries, as their profits would be reduced dramatically.

In fairness we had a pretty hefty transaction tax on Irish property i.e stamp duty and it didn’t make a blind bit of difference.

What it did cause was a bias to new build houses which exacerbated the mess as policy makers misread the problem as a lack of supply…and didn’t tax these. The real problem was mass delusion across the board. Do you tax all transactions…OTC bilateral stuff as well? If you don’t you move everything off exchange and end up with the mess you have had with all the banks where even the most finacially astute can’t figure out what the value of anything is. Financial transactions will all occur in banana republics where there ain’t no tax (bit close to home). This uncertainty causes a lot of fear and will make this mess an even bigger mess.

This is a bit like the current situation where the only way to find out the market price in the irish house market is to start placing bids to see if you get hit. The asking prices are beyond a joke on many properties and estate agents act as intermediaries in a very opaque market. Its not their fault either as they act for the seller and are bound by confidentiality rules. The market clearing prices is known only to insider professionals which gives them an edge in all deals.

Either way this type of proposal reduces the information available to the general audience, widens bid offer spreads and will increase the profits made by insiders. It will push people further into derivative land and complex legal agreements and make the world more complicated. Regulation will not keep up with reality and the insiders profit. Tax lawyers will love this.

The whole thing seems like a proposal bourne of blind anger and IMO will only make more money for those inside the system…ie professional speculators, legal teams, accountants etc.

Moral of the story is to keep it simple…as the regulators won’t deal well with complexity and will make a balls of it.

Yes and it would reduce liquidity. Bloody liquidity, governments need to act to stamp it out. Oh, wait, :unamused:

It would have zero effect on liquidity.

It would have an effect on secondary markets but they are the most destructive device known to man and are in real terms, useless.

  1. Portfolio liquidity you turnip.

  2. Do you even know what secondary markets are?

Yup.

Did you? :angry:

a) Then you are completely wrong.

b) Yes, of course, it’s my job.