Skip to main content

View Diary: I.R.S.: U.S. Income Inequality Has Reached Record Level (w/Update) (186 comments)

Comment Preferences

  •  The up-tick rule makes zero economic sense (3+ / 0-)
    Recommended by:
    VClib, shrike, Kickemout

    Transaction taxes also make zero economic sense.

    The source of our economic problems, such as they are, isn't trading, so I don't know what is expected to be accomplished other than reducing market liquidity and forcing trading to Singapore or London.

    (-5.50,-6.67): Left Libertarian
    Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

    by Sparhawk on Tue Sep 10, 2013 at 07:00:37 PM PDT

    [ Parent ]

    •  It makes perfect sense (2+ / 0-)
      Recommended by:
      MKinTN, elwior

      The up-tick rule would eliminate naked shorting, which is used to unfairly destroy companies...and is thus bad for economics.

       The Tobin tax would aim at high-frequency trading, which skims off profits from everyone else and doesn't increase market liquidity.

      None are so hopelessly enslaved, as those who falsely believe they are free. The truth has been kept from the depth of their minds by masters who rule them with lies. -Johann von Goethe

      by gjohnsit on Tue Sep 10, 2013 at 07:48:39 PM PDT

      [ Parent ]

      •  Lol (1+ / 0-)
        Recommended by:
        Kickemout

        You really need to bone up on economics.

        The up-tick rule would eliminate naked shorting, which is used to unfairly destroy companies...and is thus bad for economics.
        "Unfairly destroy companies?" I agree that naked shorting is bad, but please explain to me how naked shorting "destroys companies". Any competently managed company will continue to operate just the same regardless of its stock price. The price reflects the company's performance, not the other way around. If the stock price blips down it should have zero effect. This is why companies like Apple and Intel survive 50% moves in their stock price like nothing happened. You have no clue what you are talking about.
        The Tobin tax would aim at high-frequency trading, which skims off profits from everyone else and doesn't increase market liquidity.
        I'll take "blanket assertions" for $800, Alex.

        There are certainly some issues with HFT, but to argue they don't increase liquidity is absurd. They do by definition.

        (-5.50,-6.67): Left Libertarian
        Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

        by Sparhawk on Tue Sep 10, 2013 at 08:10:15 PM PDT

        [ Parent ]

        •  You aren't as informed as you think you are (4+ / 0-)
          Recommended by:
          MKinTN, elwior, cpresley, Cassiodorus
          You really need to bone up on economics..."Unfairly destroy companies?" I agree that naked shorting is bad, but please explain to me how naked shorting "destroys companies". Any competently managed company will continue to operate just the same regardless of its stock price.
           Obviously you aren't in the business of running a public company.
            Maybe you aren't familiar with the saga of Overstock.com.
             More importantly, naked shorting had a big part of causing the stock market crash in 1929.
            I've heard naked shorting described as theft, and I believe it.
          You have no clue what you are talking about.
           You aren't as savvy as you think you are, and you underestimate me.
          There are certainly some issues with HFT, but to argue they don't increase liquidity is absurd. They do by definition.
          Oh, they add liquidity...on the way up. But when the market is crashing, when they are needed, they vanish. The proof was shown during the Flash Crash in 2010, when those HFT computers were simply unplugged.

          None are so hopelessly enslaved, as those who falsely believe they are free. The truth has been kept from the depth of their minds by masters who rule them with lies. -Johann von Goethe

          by gjohnsit on Tue Sep 10, 2013 at 09:01:04 PM PDT

          [ Parent ]

          •  Sigh (0+ / 0-)
            Obviously you aren't in the business of running a public company.
              Maybe you aren't familiar with the saga of Overstock.com.
            Hopefully you aren't either, if you run a company in such a way that changes in its stock price affect company operations.

            The overstock.com debacle occurred due to bad company management, not short sellers. Citing Overstock simply makes you look poorly informed to those who actually understand these matters. It is extremely frustrating to me to see such misinformation being promulgated by a highly rec'd diary author. Overstock, banks, everyone always blames short sellers for their own bad management.

            You never addressed my point as to how exactly most companies with solid balance sheets weather major changes in their stock prices without major impacts.

            Stock prices follow fundamentals, not the other way around except in the short term.

            Oh, they add liquidity...on the way up. But when the market is crashing, when they are needed, they vanish. The proof was shown during the Flash Crash in 2010, when those HFT computers were simply unplugged.
            So? Even if you're right, adding liquidity some of the time but not all of the time is still a benefit to the market. It all nets out to zero anyway so unless you're another high frequency trader there isn't much to worry about. A market with solid fundamentals cannot crash regardless of the activities of speculative traders.

            (-5.50,-6.67): Left Libertarian
            Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

            by Sparhawk on Wed Sep 11, 2013 at 09:38:15 AM PDT

            [ Parent ]

            •  More details (2+ / 0-)
              Recommended by:
              cpresley, Cassiodorus
              You never addressed my point as to how exactly most companies with solid balance sheets weather major changes in their stock prices without major impacts.
              Quite simply: companies borrow against their equity. Without equity their credit dries up. Without credit a lot of companies can't function.
                I hope that helps.
               So? Even if you're right, adding liquidity some of the time but not all of the time is still a benefit to the market.
               That's obviously not true. Excess liquidity in an upmarket leads to bubbles.
                Plus HFT adds nothing to the underlying fundamentals and merely skims profits off the top of every trade.
               A market with solid fundamentals cannot crash regardless of the activities of speculative traders.
               The days of this being a healthy market are long over. The current markets are manipulated at every level.

              None are so hopelessly enslaved, as those who falsely believe they are free. The truth has been kept from the depth of their minds by masters who rule them with lies. -Johann von Goethe

              by gjohnsit on Wed Sep 11, 2013 at 09:49:11 AM PDT

              [ Parent ]

        •  Perhaps it's you who needs to bone up. (0+ / 0-)

          "We the People of the United States...." -U.S. Constitution

          by elwior on Wed Sep 11, 2013 at 07:42:43 AM PDT

          [ Parent ]

          •  Perhaps, perhaps not (0+ / 0-)

            Blaming stock traders for the state of our economy is a popular, but wrong, strategy.

            (-5.50,-6.67): Left Libertarian
            Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

            by Sparhawk on Wed Sep 11, 2013 at 09:39:13 AM PDT

            [ Parent ]

    •  Krugman believes otherwise (5+ / 0-)
      Recommended by:
      MKinTN, elwior, burlydee, greengemini, cpresley
      And then there’s the idea of taxing financial transactions, which have exploded in recent decades. The economic value of all this trading is dubious at best. In fact, there’s considerable evidence suggesting that too much trading is going on. Still, nobody is proposing a punitive tax......

      And here’s the thing: Because there are so many transactions, such a fee could yield several hundred billion dollars in revenue over the next decade. Again, this compares favorably with the savings from many of the harsh spending cuts being proposed in the name of fiscal responsibility.

      But wouldn’t such a tax hurt economic growth? As I said, the evidence suggests not — if anything, it suggests that to the extent that taxing financial transactions reduces the volume of wheeling and dealing, that would be a good thing.

      And it’s instructive, too, to note that some economies already have financial transactions taxes — and that among those who do are Hong Kong and Singapore. If some conservative starts claiming that such taxes are an unwarranted government intrusion, you might want to ask him why such taxes are imposed by the two countries that score highest on the Heritage Foundation’s Index of Economic Freedom.

      Not suggesting this is a cure all but a start.  Sequestration among other cuts is hurting the poor and middle class, this would help alleviate the suffering.

Subscribe or Donate to support Daily Kos.

Click here for the mobile view of the site