Gordon Brown triggers row with call for bank supertax

[AtW]

"A tax of 1% or less levied on financial transactions would both raise considerable revenue and limit so-called speculative activity on extremely low-margin trades."

AtW's comment:

More here: http://business.timesonline.co.uk/to...cle6907888.ece

And here is happy face or Mr Brown (if you like him): http://business.timesonline.co.uk/mu...wn_630653a.jpg

[TimberWolf]

It seems like all your financial prophesies and push for higher ethical standards come true. Anyone would think you were qualified in economics or something.

[Iron Condor]

"A tax of 1% or less levied on financial transactions would both raise considerable revenue and limit so-called speculative activity on extremely low-margin trades."

AtW's comment:

More here: http://business.timesonline.co.uk/to...cle6907888.ece

And here is happy face or Mr Brown (if you like him): http://business.timesonline.co.uk/mu...wn_630653a.jpg

Zero chance of being implemented.

http://news.bbc.co.uk/1/hi/uk/8348653.stm

Goldman Sachs will never let it happen (they don't like competition)

US Treasury Secretary Timothy Geithner dismissed the idea of such a tax, saying: "That's not something that we're prepared to support."

He told reporters: "This is an idea that has been around for a long time. Many countries have a lot of experience with the design of these kinds of taxes. I think, frankly, the experience has been mixed."

Canadian finance minister Jim Flaherty also rejected the proposal, telling Sky News it was "not something we would be interested in in Canada".

He added: "We are not in the business of raising taxes, we are in the business of lowering taxes in Canada. It is not an idea we would look at."

[AtW]

It seems like all your financial prophesies and push for higher ethical standards come true. Anyone would think you were qualified in economics or something.

After SKA I plan to do PhD in economics

[Zippy]

After SKA I plan to do PhD in economics

Are you still at work?

[AtW]

Zero chance of being implemented.

http://news.bbc.co.uk/1/hi/uk/8348653.stm

Goldman Sachs will never let it happen (they don't like competition)

It would have been enough to cut them out of EU market completely - this won't happen because of ... UK's position surely

[AtW]

Are you still at work?

No, but I will be tomorrow, working from home this time though...

HTH

Zzzzzzzzzz

[AtW]

The great irony is that on this one Brown is right, but few people will support him including in his own party - he had 10+ years to implement it, but he didn't since he was "bought" by money made in the process, anything he does now is a bit hollow.

[HairyArsedBloke]

The original concept of the Tobin Tax was on foreign exchange trading. Somehow this has now been extended to all financial transactions. It is a favourite of the idiotic left and creeps out from the shadows every few years to be used to fund the current fashionable cause of left before being kicked out after a short while once people wise up to it being a stupid idea.

It is fashionable to condemn speculators; the neither make nor consume anything. However, the overwhelming activity of speculators is not to drive the whole market one way or another but to exploit small differences. Their activities are a vital part of a proper operating market. Without them liquidity would be severally reduced. This would lead to difficulties for so-called legitimate trades to take place and for far more instability in prices.

The first objection people have to the Tobin Tax is that it is impractical because it would have to be implemented everywhere otherwise the trades would just move to where it was not applied. Unfortunately, there are so many people who but all their efforts into devising a system where it could be applied.

All transactions that are exchange based attract fees per transaction. This has been used to argue that those fees have not discouraged trading so a Tobin Tax would not either. Larger players can negotiate lower fees. However, all exchanges compete and combine with each other and seek to minimise the fees otherwise the business would go elsewhere.

Above all there is a very simple and sound reason why a Tobin Tax must be rejected: Gordon Brown is in favour of it, so it has to be an idiotic idea.

[AtW]

Without them liquidity would be severally reduced. This would lead to difficulties for so-called legitimate trades to take place and for far more instability in prices.

That instability will be due to fundamental factors rather than a bunch of speculators shorting some shares that they never owned, or buying lots of oil to store in supertankers hoping for quick profits 6 months later: if it wasn't for this activity price of oil now would be closer to what it was at start of the year - $30 per barrel.

The market is completely speculative now - something needs to be done about it even if it carries alleged risk of far more instability in prices.

Not sure if Tobin tax is a solution - better would be large capital gains (starting with something over 100%) on short term profits that are not dividends from shares held over long period of time. Back it up by lengthy jail sentences. Long term investment on the other hand should be encouraged - very low CGT on profits made from long term investment decisions.