There seems to be momentum on the hill to push for a small transaction tax on stocks. The proposal puts a 0.1% transaction fee on every order by total cost.
Consider this a sales tax, although instead of regressive, this puppy is progressive as well as more biased towards institutional large investors. (Hey flat taxers, by philosophy you should love this one!)
Because it is based on transactions, each time a security is bought and sold, those fees will add up on those who make large trades the most frequently. In other words, such a tax would target large hedge funds and institutions making profits off of slight fluctuations, such as those engaged in high frequency trading and derivatives.
My my. A few, now government funded, I might add, mega financial institutions (made that way with U.S. taxpayer help) are now lobbying against derivatives regulation.
It appears the great unregulated casino hall of derivatives can sometimes generate winnings. The last 6 months haul? $35 billion dollars.
Wall Street is suiting up for a battle to protect one of its richest fiefdoms, the $592 trillion over-the-counter derivatives market that is facing the biggest overhaul since its creation 30 years ago.
Five U.S. commercial banks, including JPMorgan Chase & Co., Goldman Sachs Group Inc. and Bank of America Corp., are on track to earn more than $35 billion this year trading unregulated derivatives contracts. At stake is how much of that business they and other dealers will be able to keep.
I am starting to think that everyone and their brother has a magic secret crystal ball, a pack of special stock symbol tarot cards, a smoke machine and voodoo chants mumbling phrases sprinkled with buzzwords recovery, GDP and Q3 .
Leading economists have urged the United States to use concrete measures instead of empty words to ward off possible losses in China's holdings of US treasury bonds, which have already surpassed $800 billion.
The call comes amid widespread concern that US countermeasures to battle the financial crisis are creating another credit bubble and failing to regulate financial markets.
"So far the US government and the Federal Reserve have failed to provide China with any details of how its countermeasures against the financial crisis will not lead to serious capital losses to China's holding of its treasury bonds and foreign reserves," Yu Yongding, a renowned think tank economist with Chinese Academy of Social Sciences, told China Daily.
Some analysts believe the sector's woes may worsen when demand for industrial products rebounds -- and manufacturers discover key suppliers cannot rebound with them because they are effectively -- but not yet officially -- out of business.
Call them zombie suppliers. Analysts say the speed with which major manufacturers cut output in this recession put unprecedented strain on thousands of small manufacturers that supply the industry with critical parts.
That has left the supply chain with an unknown number of suppliers who are dead but do not know it -- companies so undercapitalized and overleveraged they will never raise the money they need to get their idle plants running again.
In a new op-ed Joseph Stiglitz argues that due to the national debt (projected to be $9.05 trillion over the next 10 years), America should get on the we need a new reserve currency beyond the dollar bus. Kind of a if you can't beat 'em, join 'em message. (see China and the Dollar for details on the Chinese game of chicken while pushing for a new reserve currency).
Our budget deficit, as well as the Federal Reserve's ballooning lending programs and other financial obligations, will accelerate a process already well underway -- a changing role for the U.S. dollar in the global economy.
WASHINGTON—Despite ongoing economic woes and a jobless rate that has been approaching 10 percent, U.S. unemployment projections drastically improved Monday after the consumption of five beers.
"It's going up," leading economist David Singleton said confidently, indicating the predicted growth in jobs with an upward wave of a Bud Light bottle. "All the way up. By the end of the month. No problem."
The paper first identifies one of the main causes of the financial crisis as aggregate risk in systemically important financial institutions. Bloggerspeak translation: Derivatives, all of those asset backed securities, CDOs, and so on, which were put together like a house of cards, designed on faulty models and slapped with AAA credit ratings when they should not have been.
Since shortly after WWII Japan has been a single party nation, totally dominated by Liberal Democratic Party (LDP). If the polls are right, this tradition will change this week in a very big way.
Just days before the election, polls continue to support the widely held belief that the Liberal Democratic Party (LDP) of Japanese Prime Minister Taro Aso will experience a crushing defeat in Sunday's vote for the lower house of the country's parliament.
One major late-week poll indicated at least twice as many voters would cast ballots for the Democratic Party of Japan, led by the country's likely next prime minister, Yukio Hatoyama.
The 2/3rd percentage is extremely important. If the DPJ captures 320 seats they can enact any legislation even if the Upper House, which is still divided, rejects it. Some projections say they will reach that goal.
Remember those ooo so dusty minor points of how financial institutions were over leveraged and this was one of the causes of the financial crisis? Like Poltergeist....they're back!
Credit Suisse Group AG and Scotia Capital, a unit of Canada’s third-largest bank, said they’re offering credit to investors who want to purchase loans. SunTrust Banks Inc., which left the business last year, is “reaching out to clients” to provide financing, said Michael McCoy, a spokesman for the Atlanta-based bank. JPMorgan Chase & Co. and Citigroup Inc. are doing the same for loans and mortgage-backed securities, said people familiar with the situation.
I am starting to think that everyone and their brother has a magic secret crystal ball, a pack of special stock symbol tarot cards, a smoke machine and voodoo chants mumbling phrases sprinkled with buzzwords recovery, GDP and Q3 .
Recent comments