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The need for at least a 1% Tobin tax has long been overdue.  The amount of speculative money sloshing through the world markets is staggering and a speculative drain on the real economy.  In addition the advent of hyper-trading and flash-trading is another toxic poison to the real stock market of capital investors, entrepreneurs and businesses.  In addition, it is the most feasible way to shift the burden of closing the deficit from the backs of the pillaged and raped middle-class to the bailout taking parasites on Wall Street.

If you don't know about the Tobin Tax and how it could close the deficit and fix many problems of our existing system then please read up on it.

For those that have already done their homework and know the benefits that a Tobin tax would have please PM me.  I'm diving into doing more 'hard research' targeted specifically at this issue exclusively in order to build my website.

I need help: researching, making animated videos, website design, essay writing.

If you'd like to help please PM me and we can start a conversation.

Thanks.

 :)

The most feasible way to end these deficits is to end the creators of our money in the first place. It is absolutely immoral to tell a man he can't trade contracts on his property and labor as he pleases.

1. The Tobin tax wont do anything to end speculation. What will end speculation is having a sound monetary system that does not allow the financial system to leverage "to the sky".

2. The Tobin tax is just a scheme for the politicians to get a part of the money, and the ones that will end up paying it is us through more expensive services.

All this said, I hope the Tobin tax gets imposed (Sarkozy is a big fan) so people have another good reason to switch to Bitcoin. The more oppressive the system becomes, the better for Bitcoin.

Still looking for silver bullets?  Obviously the problem is multi-pronged but to say that "The Tobin tax wont [sic] do anything to end speculation." is completely false.  Rather than discuss that the majority of trades on the NYSE are done with computers and that the average stock is held for less than 20 seconds (the average of 11 has been reported) you simply poo-poo this idea in favor of some other methods (which are good in their own right) but not going to solve our problem by themselves.  Can we quit being so pedestrian in our thought-process?  Looking for a single solution to a complex problem is a fools errand.  The Tobin tax is what I want to focus on, if you'd like to start a site to stop the ridiculous levels of leverage then be my guest - I'd even be willing to help.

Then please propose a fairer system of collecting revenue for the government.  That is, if you believe a government should even exist at all...?

Are there no limits to what people should be able to trade "as they please"? 

I prefer decentralized power that can actually be held accountable. To answer your second question, there should be no limits as long as it does not involve murder nor violence.

Is starvation violence?  What about coercion through threat of privation?


"I prefer decentralized power that can actually be held accountable."


What does that even mean?  Is there some book out there or post you've made that can better define what cryptic posts like this mean to someone who takes interest in the structure of government and how it operates?  How far off the mark is it from the ideals of the book "Atlas Shrugged"?

Let me repeat again: The Tobin tax wont do nothing to prevent speculation. If some channels are closed the financial system will find other ways to use the leverage power that the governments provides them via the central banks.

And it will produce an increase of price on the services we use. Its just a scheme for politicians to get part of the money, it has nothing to do with stopping speculation.

That said, please go ahead and get the Tobin tax approved, for Bitcoin sake.

Starvation is only a symptom of people being denied the ability to sustain themselves. Rarely is this caused by misfortune but by the limiting of resources and economy by artificial means. Threatening governments is hardly coercion but more like using force against the initiator in the first place. Governments can only sustain "public" resources by coercion.

It means that we would have better order and a more viable society if law wasn't in the hands of a monopoly.

I'd love for someone to tell my why speculation is bad.

I sense a thread derail coming, but yeah I don't see why speculation is so bad.

Am I right in assuming you don't work in finance and have never done so? A 1% Tobin tax is utterly unthinkable. Ask the Swedish, who used far smaller Tobin taxes, what became of that experiment (http://www.cityam.com/news-and-analysis/allister-heath/sweden%E2%80%99s-failed-tobin-tax-experiment).

Speculators HELP the economy. Their buying and selling provides pricing information. They only profit when they provide good information concerning future demand.  They profit from volatility, but by competing with each other, they REDUCE volatility.

Maybe just ignore the kids with the black/white worldviews and no understanding of trading and the rest of us can talk about this intelligently.

I'm browsing the wiki page and, without dedicating hours of time to read it all, maybe you can answer my question... 

What does this do to retail FX traders?  This is always my worry when these type of taxes and regulations pop up.  They have a tendacy to hurt the retail guys, while doing little to the multi-billion dollar banks.

I'm assuming you have no idea what you're talking about quoting an article that brief and lacking in any detail.  Do you know what a Stock Market is supposed to represent?  What does it mean for a company to invest in your stock and then sell it and then buy it again once per nano-second?  What does that even mean?  Building algorithms that exploit market gyrations to get 0.01% profits over and over again provides no net benefit to the economy.  Nothing new gets built, no research is done, no productivity is increased, no new products are made, no jobs are created etc.  Please do some research on the automated trading networks and look up more than 1 page articles on 'how horrible' a Tobin Tax is.    If you think Goldman Sachs is providing a service to civilization by hyper-trading I'd love to hear the argument.

More than people that work?  More than people that invent?  More than people that create? 

Seems like there would be more of a public will to try and get back the bailout money that went to Wall St.  Many of the well known firms pay nearly no corporate tax, how better do you propose to tax them?  How do you reconcile the hyper-trading which is uber-short term parasitical speculation with what a stock market is supposed to be?  This is total short term investment to the extreme where the trader has 0 stake in the companies long term (anything beyond a few mirco-seconds) success. 

How that can be looked upon as favorable or acceptable is beyond me.  Please explain.

Apparently that's because both of you aren't aware of how much of it is going on, at least I hope that is the answer.  Before I write a 10 page history on this I'll test the waters: do you think that there is any amount of speculation that would be 'too much' or is it fine to have 50 times GDP of a country flowing in and out of that countries capital markets annually?

Question:  Are you hypertrading?
If the answer is no and you are actually using the market as it was originally intended and setup 100s of years ago then is a 1% fee on each transaction going to crush your profits?  Are you in for at least a mid-term investment or just a quick buck?

"They have a tendacy to hurt the retail guys, while doing little to the multi-billion dollar banks."

A Tobin Tax would do just the opposite as all the major banks and hedge funds are now using algorithmic trading, hence the large scale resistance to the Tobin Tax (check out the EU and the proposition of a Tobin Tax).  They say it will be the end of the world and liquidity will go to 0 and the sky will fall if they have to pay a 1% tax, this is nonsense.  There are many benefits that I won't cover here (too late at night, and too long to cover) in the direction of making markets more stable and other benefits beyond just the revenue - which would be immense!  I've heard estimates in the Trillions.  Do you want to be taxed to help pay off the national debt or do you what the Corporatocracy that has hijacked our government to pay for it?

Why not just impose a 30-day waiting period on currency transactions? People who need currency for 'legitimate' purposes will just need to plan ahead. ;D Seriously though,  what's stopping forex speculators from just using trading services based in countries with no such laws?

No, I don't think there is the concept of "too much".  Maybe you can explain why.  Even just a short summary.

My issue with it is that I, as a retailed trader, should be able to make short-term moves all day long.  A 1% tax isn't going to crush my profits, but that's still 2% of guaranteed loss tacked onto every one of my round trip trades, basically an increased commission.  It wouldn't be the end of the world for someone with my trading strategy, but it would for many other retail people.  Taxing retail traders does nothing to help the system, but does hurt all the retail traders, and thus their brokerage firms as well.

If this was exclusive to big banks and/or only hold periods in the <5 second range, then I'd be in support of it.  As it is, it's just another way to hurt retail traders and banks will undoubtedly find a way around it.

I don't know if the Tobin tax is a good idea but the problem it addresses is huge.

When you try to buy or sell securities, hypertrading is a way that allows the big players to find the maximum price you are willing to pay.  They do it by placing and cancelling sales 1000s of times per second when a new buy order appears.  The effect is that us peons always pay close to the max we are willing to pay while the Goldman Sachs type institutions pocket the difference between that max and the price the security could be acquired at.

Its thought that transaction tax to eliminate those trades would be helpful.  If it provided a buffer for the "too big to fail" banks, so much the better.

Personally I'd worry that the exchange would simply take place somewhere else.  I don't know if the tax would work.

Why not just straight up ban HFT? 

I hate to tell you, but your personal definition of a 'service to civilization' doesn't benefit from a monopoly on the determination of value. If people didn't value shares, there wouldn't be a stock market in the first place. Shares obviously provide value, and some of that value comes from the ability to resell them. If you'd rather have a world without speculative investment, then you're talking about a world where it's very hard for a small business to get any capital whatsoever.

Once that speculative investment has happened, it is anybody's right to resell shares which they own. The rest is just down to human ingenuity. The fact that the resale of those shares doesn't 'do a service to civilization' is largely irrelevant, as it is just a part of a process which provides investment capital for building things, research and productivity.

You have no idea what you're talking about.  HFT isn't speculative investment, it's exploitation.

http://www.freakonomics.com/2011/03/28/should-high-frequency-trading-be-banned-one-nobel-winner-thinks-so/

Technically its difficult as it can move a lot of trade into the shadow banking system.  But retail investors are being gouged by the system right now so hopefully some way can be found to handle it, ideally in the exchanges themselves.

Well that's just it.  Who cares if they gouge the shit out of each other?  As long as they're no longer raping and pillaging retail traders, then let them find whatever loop holes they want to go off and do it to each other.

Taxing it just seems like the wrong response.  By taxing it, we're giving it the rubber stamp of approval as ethical and ok to do, as long as they pay a piddly 1%.

HAHAHAHAHHAHHAHA

30-day waiting period on currency transactions would definitely minimize currency speculation although it would provide no revenue and actually cost money to administer and police the process.  And 30 days would be too long, although China implements capital controls so speculators can't make a killing on it's currency by driving it up and then selling it off.

Depends on the regulation around it regarding avoiding it, but that goes for most any law.  If it can be avoided by off-shoring should we just abolish all laws?

Much of the financial industry has become parasitical to the actual real productive economy.  We can't have an economy exclusively (or even primarily) of money making money; it is the antithesis of a productive industrial economy.  

The desire not to be taxed is nothing new, I don't want to be taxed but revenue is going to have to be collected if we want to have a government.  I (and most lower and middle class people) get taxed enough, it is time for the financial sector to pay their fair share.  The alarming thing is we have a class of people in our country that basically pay no taxes and therefore aren't paying for all the benefits that they are gaining by the system: infrastructure, police, firemen, the ability to operate a corporation with limited liability, an educated work force, military defense, etc.
 

Finally, someone who can quote facts on what is actually observably occurring the in the real world. 

 :)

The markets are too big, they wouldn't just be able to leave because it would still be profitable to do business here; but it would have to be actually investment not scamming the system based on technicalities.  It would drastically change the markets as they are presently because a vast majority of the trading is done my these algorithmic computers.  But the benefit would be to all that are actually in the stock, currency or security markets for legitimate purposes.

a 1% Tobin tax is extremely high.  Most Tobin tax proposals have been a fraction of that amount and would still have significant distortionary effects according to any of the positive studies done.  

I also do not see a problem with HFT or speculation on its own.

And why is this posted in Bitcoin Economics?

A ban would garner no revenue.  A Tobin Tax would pay for itself many fold over.  Can you imagine the regulatory body that would have to be created in order to enforce this?  It would be much easier and take a smaller bureaucratic organization to simply tax them at a paltry 1%.  And a 1% Tobin Tax would effectively ban HFT as if they even HFT for 1 second (as they are presently trading per-milisecond) they wouldn't have much left would they?

You're correct in your assessment in this is what a stock market SHOULD represent.  But what does it represent when you are buying and holding a stock for a split-second?  When you brag in money magazines about how you hired 10 mathematian PhDs to build you a custom algorithm that hyper-trades and effectively is just slurping money out of the market without any net benefit to anyone else than the person doing the trading.  In any transaction there should be 2 people trying to maximize their utility, with most professions and specializations this is easy enough to see.  The legitimate role of the speculator should be to mitigate risk, and provide liquidity and arguably price stability (depends on scenario) in each of these there is a utility maximization between 2 parties (i.e. each of these roles provides a legitimate service to the rest of the economy).  But what about hyper-trading?  Can the same be said?  Is benefiting off of others without any benefit to them moral?  I would argue not, and therefore the desire to 'ban' this through taxation.

There really is too much subject matter to cover here but please 'Google' what Goldman Sachs specifically is doing and if you can tell me how that should be allowed please let me know.

Do you want to allow parasitical 'speculators' (and HFT isn't really even speculation, and gives the legitimate role of speculators a bad name, it's more of a private tax on legitimate traders) power in your society?  There is something wrong with someone gaming the system and effectively leveling a tax (through HFT) on all legitimate business, but this tax is not a tax to enrich the Treasury and pay for something at least possibly worthwhile, it goes to people who have no qualm with conducting rape-and-pillage economics.  Do you want such people to gain power in the world?  If so, then do nothing.  If you don't want to allow beneficiaries of ill-gotten loot to have massive influence over your life (through subsequent purchase and corruption gained through this loot) then do something about it, as I am proposing by supporting a Tax to end this.

The thing to understand is that HFT is a forced, private tax by the parasites against the real economy.  By imposing a 1% tax on transactions legitimate business would be benefited as the HFT wouldn't be allowed to occur.  And if the HFT moved into the shadow banking system who would they be sucking off of?  They can't simply all suck off each other as HFT is reliant upon the real economy to provide its 'host capital'.  A shadow trading exchange without a Tobin Tax (after it was implemented) would be so filled with HFT that no legitimate trader would touch it.

niemivh they may have been a time between the crackdown on insider trading and the development of flash trading when it was possible for a human being to trade securities profitably.  My feeling is those days are gone forever - machine based trading is not going away.  So really the tax only makes sense if we want the revenue.  And then the question will arise whether or not this is the most effective way of raising revenue?

Most free-marketeers don't see are unable to see the incredible bias of all economists.  They believe that free markets are the solution to all our woes and that all economists (at least on their side) have no stake in the fight.  

Can I see some of those studies?  It's likely that I've seen them before and that they are totally wrong, well not 'wrong' just biased in favor of those who produce nothing and suck of the real economy (not referring to speculation in general, just HFT).  The resistance to a Tobin tax is not some benign triviality, it is through a lack of this tax that the system is largely gamed at present and there are people making an incredible pile of money in the process.

Tax havens are so prevalent in our modern time that this seems like a great place to raise revenue.  In addition there is no problem with trading with algorithms or computers per se, but HFT is parasitical.  Please Google Goldman Sach's trading schemes and tell me how this should be allowed to persist.

Let the people make a pile of money. Wealth is not limited unless you set it up that way from the start.  

Revenue for what? Ineffective bureaucracies? Violence and war?

Computers are just tools that allow people to trade THEIR property as they please! You have no say in how it is traded nor do you have say in how man produces with his own labor!

Hi niemivh,

Algo trading and flash trading is just the old arbitrage business adapted to the market´s new technology.  That´s all.  This has been happening since the first bourse was born, the timeframes were longer, the spreads wider and the trades less frequent.  But the business was exactly the same.  The timeframe of the trades does not make any ethical or moral difference to me.

Speculators play a crucial role in free markets, they provide liquidity.  Liquidity is a very important need (ask the people in Spain who are stuck trying to sell their houses).  No matter that HFT cancel their trades very quickly, they provide epehemeral liquidity if you want, but liquidity after all.  Technology makes things go faster, speculators are just keeping pace with technology.

Tobin tax is an aberration.  It´s a dirty patch for a much more profound problem.  If you want a solution fix the root of the problem, not its symptoms.

I understand this 100%, but how are you figuring that a laughably small 1% tax (I'm assuming that'd be 2% round trip) is going to curb HFT?  2% knocked off of tens of billions of dollars still leaves them with tens of billions of dollars.  That's like shooting a firecracker at an aircraft carrier and expecting it to sink.

Yes, it'll most certainly pay for itself and generate revenue, there's no doubt about that.  I just don't see how it's going to even put a dent in HFT.  If we're really going to make an honest effort to stop HFT, rather than just share a tiny portion of the profits with the public, then let's try a little harder.  Why affect an across the board transaction tax at a fixed 1% when we could have no transaction tax for securties/currency held for more than say, one day, maybe a 2% round trip tax on securties held less than one day, a 5% tax on securities held less than one hour, and some very high, say 50%, on transactions that round trip in under 10 seconds.  These taxes could be round-trip fees and charged on the completion of the trade, just to keep things simple.

IMO, that would eliminate HFT or sharply curb it.  Due to this, it would probably generate less revenue than the Tobin Tax, but I don't think this should be about revenue, I think it should be about eliminating HFT.

So the problem is someone else makes money?  Oh noes, how horrible.  I pay what I am willing to pay, how horrible.

So it's ok for people to make money off of other people without their knowledge or benefit at all?  And that somehow trading money back and forth with algorithms to exploit technicalities in an exchange system is creating "wealth"? 

People make money "off" people without their knowledge all the time.  Why is that wrong?  For example, my mortgage was sold to another company.  Someone else is making money off of me! Oh noes!  The benefit is liquidity.  No one is forcing people to sell at these prices, no one is given special access to make bids or asks.

Do you favor banning poker since some people might be better than others and "take money" from them?

Speculation helps the market react more quickly to changes in supply and demand conditions, which leads to more efficient allocation of investment resources.

Revenue for all the features of a modern nation-state.  I'm not even sure we agree that government should exist, much less how revenue should be gathered for it.  Treating people that trade in other people's money and 30 to 1 leverage in hyper trading doesn't seem like 'labor' to me.  These are not Howard Roark's of your imagination but brutal exploitationists.

It must be easy to be a libertarian, I remember when i used to be it certainly was.  All you had to have is this vague notion of 'freedom' and 'liberty' without any proven track record of market success in the use of those principles.  Unfortunately when you start to dive into the real history of economic development things become much more complicated that any of us would like them to be.

Everything you said so far leads me to believe that you think that there shouldn't be any government at all, or at the most a very bare minimum of law.  What this bare minimum is left to our imaginations, unless you can point me in the direction of an actual structure of law or what country, philosophy, structure laid out somewhere, etc. that we can go off of.  In addition to your past comments your name is Atlas, can we safely assume that Atlas Shrugged is a good reference for what you see as an ideal government?  

And in your opinion, what is the "problem"?

It's up to investors to do their due diligence and not let people who leverage the money under their management 30 to 1 control their money.

When you reduce investment risk by prohibiting or penalizing potentially risky trading practices, you are also eliminating the benefits that those trading practices provide.

A market where profit/loss is not socialized, and participants have complete contractual freedom, leads to the most efficient allocation of resources.

They are using HFT to garner a tiny fraction of a percent of profit on the trade.  Each trade in a hyper-trading trade, yields a miniscule fraction of a percent in profit, point being much less than 1% that the tax would take on each transaction.  If you are going to make a trade that would yield you a 0.0034% profit and you're going to have to pay a 1% tax on that transaction it becomes obvious that only people making long term investments would be trading, which is what we want (if we want a functioning, productive economy).

Problem is that someone else is making money off of you without you getting anything out of it.  You literally gain nothing in the transaction while they gain everything. 

The funny thing is you're already paying these inflated prices to private hedge funds and other HFT operations.  You get to pay more for hyper-traded funds while getting nothing (except for the privilege of paying a little more, I guess).  All the details of the existing system look like a tax (since you can't elect not to pay it) except you get nothing out of it.  Like I said before in an exchange where 1 party seeks to gain all the utility of the transaction without providing any benefit/utility to the other party seems like a parasitical operation that should be discouraged. 

 

*Sigh*

I said "without their knowledge or benefit".  That is knowledge OR benefit.  Either one.  You use your mortgage as an example, did both you and the bank not benefit from the mortgage arrangement?  Wasn't it an agreement on both parties to engage in said arrangement?  In fact I would wager that this agreement was done with your knowledge and benefit.  So... why did you bring this up to compare to what I said?

With poker they are entering in this arrangement with their own knowledge and the benefit is a chance to win more money than they put in.  So once again... what does this have to do with what I'm talking about?

In poker, people agree to play, and understand the risk. With HFT, everyone is paying the price, even if they don't want to play the game.

About speculation and price discovery, of course we need speculators, question is how much (how much accurate we want the price to be). And tobin tax is a very efficient way to set the limit.

And sorry about OP hopes, but Sarkozy don't really care about this. I guess he just said that during the election campain, or at some point when he needed a nice popularity poll.

If you want an exchange with a Tobin Tax, then create one. Everyone who thinks it's a good idea will trade on it. Others won't unless you force them to. We'll then let people figure out how valuable HFT is.

A lot to comment on here.  But just one question for now: what does HFT do to provide a 'benefit'?  I assume you mean a 'benefit' as in more than a benefit to one party...?  Lest we call stealing a 'benefit' since it provides advantage to one person involved in the 'transaction'.

Glad to see another person who gets it.

 ;)

The Tobin Tax has a lot more support and traction in the EU than it does in the states.  Sarkozy is a scumbag, the Tobin Tax idea has been around for decades and he's obviously trying to improve his approval rating from the 20% range.

Thanks for your answer, it's a good one, and it makes me think :)

Maybe that's the way to go, but for that we would need producers/retailers to agree with that, which need pressure from people, which need people to understand economy.
That's why niemivh idea of creating a website is a good one.

Call me an utopist, but I still hope that one day people will get it. We just need good (and not corrupted) teachers, and a motivation for people to understand economy. Perhaps the present economical situation could help with that

I lose .00005%.  Oh no, how horrible.  I'll much rather pay a 1% tax instead to keep these bastards from taking my .000005%.

Sounds to me that someone is getting utility, otherwise they wouldn't be engaging in trade.

Ugh.  This isn't how laws work.  I'm not suggesting it nicely and asking 'pretty please'.  Government should, can and has been used to promote justice, equality and fairness.  But only if people care to use it to do so.  Trying to do everything outside of the system will result in failure.  Nobody here has given me any rational reason as to why HFT is a good or moral or productive or beneficial thing.  Therefore it should be stopped.  This attitude of "I'm taking my toys and going home" does nobody any good, including yourself.

Do you have any source for the .00005% figure ??
Obviously the premium due to speculation (and especially HFT) is difficult to know. But i'll be ready to bet that it's far more than that (again, let's say on oil price). Pretty sure we can find lot of estimations.
Wanna bet that the average is > 1% ??

Did you read any articles related to hyper trading?  Comments like this clearly illustrate that you didn't.  Please do so.  You'll benefit from the process.

The problem is that they are doing these 0.00005% profit trades every micro-second and using those trades and false bids, etc to manipulate the price.  Point being is that while their profit from each trade might be this low the total market manipulation is much greater.  Please research this more.  It's not some benign force mildly inconveniencing you it is a much greater problem than that.

I didn't see any links given.  I don't plan on reading anything long.  It should be simple enough to explain or give a short summary.

You use a lot of loaded terms-

Why do I care if someone is making a lot of small trades making a small amount of money?
Why do I care if someone makes false bids?  If the bid would be honored if someone gets their order in before it's canceled, it's not a false bid.

"Manipulating the price" - such a loaded term.  Again, don't care.  Someone foolish enough to be manipulated because someone puts bids in or buys and sells at different prices deserves any losses.  Moving money from idiots to non-idiots is good for society.

I'm not going to waste time researching something unless I have a good reason to.  Try to give it to me.  I'm willing to listen.  Why should I care someone is making lots of trades?

Until then- "Oh noes, someone be making profits by providing me liquidity!"

I refuse to take the word of someone who has the traitor Alexander Hamilton as their avatar.

-SOCRATES
Isn't the alternative left us to persuade you that you should let us go?

-POLEMARCHUS
Could you persuade us if we don't listen?

I'm apprehensive that you won't listen but just in case:

That shows how much you know about the history of the place you live.  I've seen all the Alex Jones, Zeitgeist, and other 'fringe' documentaries out there as well.  I do like Ron Paul.  If you have evidence that one the greatest founders of our country was a 'traitor' please post it here.

Is it that you equate the 1st bank (and therefore 2nd bank) of the United States as past incarnations of the Federal Reserve?  If so, please do more research on the topic.  I thought the same many years ago until I found out that while they are both central banks that is where the similarities end; and the reasons that you think the 1st bank was allowed to expire and the 2nd bank was 'slain' by Andrew Jackson are far from the reasons that you think they were.

Nowhere but on the bitcoin economics forum can a man so unexpectedly and unintentionally irk a bunch of Austrian economists! :D

The Tobin tax is a fabric glue seal on an old high pressure pipe. The pipe, its contents, the leak and the very purpose of the system need to be questioned before applying the "solution". The system of debt based money is flawed to its very core. Patchwork will do nothing but necessitate further patchwork in the future.

High volume trades are by no means bad. They act to provide price discovery as soon as possible. If you don't like what prices are telling you then there is a far deeper problem. It's like a man whose girlfriend wants to break up with him but he'd rather hear it tomorrow than today, so he prohibits her from talking! His solution does nothing but worsen his case.

It is the ability to create nearly infinite amounts of credit out of nothing that warp markets in the mid and long run, not "greed", "irrational exuberance" or "pessimism".

Hamilton might not be a "traitor" per se but he was not exactly for freedom and the little guy, he was for centralization and emperor like powers in the executive branch. Basically he was for everything (politically) that emperor Palpatine used to pull he's coup.

http://en.wikipedia.org/wiki/First_Bank_of_the_United_States

If there's one person to go back in time to murder, it wouldn't be Hitler or Pol Pot, it would be Hamilton.

Why? Why can't you have the robots battle each other and have the "moral" people trade on their own exchange?



This is the type of prevailing attitude I hate about bureaucrats. It's not that there is anything morally righteous about HFT, although I do agree that it does help with liquidity, although I see you're point with orders that are placed and cancelled, never to be actually traded upon. These are the same justifications that bureaucrats use to outlaw things like drugs, violent video games, and could be used for things like luxury cars, yachts, etc.

Dude seriously pull a gun on us why don't you

Take your light weapon, strike him down!!

Everything you bring up involve two parties transacting with the knowledge of the other party and both parties benefiting from the transaction.  Once again, how does this compare to the HFT?  Nobody's been able to answer this question, they just pull a red herring out or straw man and start harping on something I never said or insinuated.

I guess such is the nature when the opposition realizes that they are losing the argument... I imagine that the ad-hominems are not far off.

If I put in a limit order to buy some sort of security and it gets fufilled by a HFT bot then I benefit by getting what I wanted. The HFT bot benefited assumingly by making a small profit. We both benefit. HFT is not a secret.  If I think a price is out of line with what I want to pay for something because of a HFT then I don't buy it. Again, there is nothing stopping anyone from creating a HFT-free exchange - unless there's a law against it.  ;D

Everybody is not entitled to benefits from a transaction. Trading pokemon cards shouldn't constitute a contribution to "society".

This unfortunately is the nature of debate. You have to resist the urge to simply call your opponent "irrational". If they are lashing out at you, remember you appear exactly the same to them. It really is somewhat disrespectful to blame the other person for not falling head over heals in love with your idea. If you really do wish to reach someone with something useful take them calmly through the logical steps while being yourself open to influence and possibly a whole different view of the subject. This is true even and especially the more irrational they appear.

The way I look at it, natural law's point is a valid one. Go start your own bourse.

People cannot give a rational reason for every little perk in a corporate list of perks, but what they can ensure is that with a good possibility of takeovers, the perks remain at around the right level, neither too high nor too low. The way I look at it, if HFT is that harmful, then conservative business owners would float their shares in "slower" exchanges.

This is the bitcoin world. People don't complain. They compete.

That makes more sense.  I was assuming the 1% was taken off the profit from the trade, not the full value of the trade.

Since that's the case, this would absolutely demolish retail traders.  I'm fully against it.

I actually think this is a good idea, maybe I'm just too cynical, but this is what would happen in the real world if some government forced it upon all markets. The big HFT players would eventually get re-classified as a special type of market player with some government "license", let's call it "market maker trader" where they don't have to pay the tax. Now, suddenly they have an even more competitive advantage than that of what you claim them to have now. Now you really can't compete based on your own ability because you have to pay a lawyer to comply with the regulations to protect yourself from the hand of the state and then you have to pay some licensing fee, and now you can't even compete because you don't have enough capital for it to be profitable anymore. And we are back to square one, except that you can't create your own exchange that forces everyone to pay the "tax" because the government has forced upon you the rules they have set. So you couldn't even create an exchange that forces "market maker traders" to pay the tax.

If you'd like to discuss what the proper role of government and what laws are defined and to be used for, I'll post my definitions for review again.

I've spent the last year improving, defining, and refining how everyone could have the maximum amount of freedoms and liberties and the minimum amount of tyranny.

P.S. It wasn't as hard as I thought it would be.

My original post is here:

https://forum.bitcoin.org/index.php?topic=25184.msg329602#msg329602 (https://forum.bitcoin.org/index.php?topic=25184.msg329602#msg329602)

Oh, and I forgot to mention one thing. The reason why me or anyone else should determine why we have laws and what and for who they should be for, is exactly so we can draw a simple line in the sand. The line in the sand merely determines if some force was unwillingly applied to another persons life or property in a unconsented to way. Nothing more, nothing less.

Discussing what is fair and not fair really is a subjective matter. Even manipulation, though not nice, does not, in and of itself, violate laws. It all depends on what your contract states.

Everything we engage another person in exchange for, is effectively a contract. If that contract, for example, states that you get to trade faster than the next guy, and there are no guarantees or warranties that explicitly state you are provided similar privilege (as per a contract), then you get to live with the fact you may not get your order executed in time.

I know that HFT seems sneaky and underhanded, but if you don't like it, don't engage in that trade system. Make your own. Of course, the second government comes in and creates special privileges, licenses, platforms, and other whatnot laws, then things have changed. Now the manipulation has become plunder. You no longer have a market of freely trading individuals. The manipulation has now become forceful. Now we have a real problem.

This is the problem we should all be trying to put down. Monopolies (of the forceful type) can now arise to put down any competition that would "right the ship" if left to their druthers. Your plucky laws have now come back to bite you. The very thing you felt was unfair, has now become unlawful. It no longer serves to protect life, liberty and property, but does the exact opposite. Your forced solidarity is now shackling what would be a free market.

You might then say that the laws were designed to prevent or reduce fraud. They do no such thing. We already have laws for fraud. They have been around for thousands of years and they aren't that hard to figure out. To wit they must merely show that what you agreed to (transfer of property, performance or any forbearances thereto) was not fulfilled.

Artificially manipulating a market to keep people "honest" only destroys a free market.

Two people exchanging Pokeman cards are maximizing their utility, benefiting from the exchange.  This results in a betterment for society as 2 people gained something at the expense of nobody else.



How you figure?  Can you give me an example of two people involved in a 'transaction' in which one (or more) parties do not benefit?  I think theft would be a good example, but can you think of anything else?

Guy, just ignore him.  He's a kid.  Stick to responding to the legitimate questions and arguments.


I'm interested in knowing whether you realize and/or care that this tax would destroy retailing trading, especially highly leveraged FX trading. 

The faux 'trump card' that libertarians use frequently is something along the following lines: "if you have to use force to enact anything then it invalidates your justification", and "force" is painted with as large a brush as possible.  I see this argument alluded to and used all over this forum.  For some, I'd say it's actually their prime "philosophical" mantra.  This 'reasoning' is so deeply flawed.  It gives special status to the status quo.  It makes enacting any means of justice impossible.  It reduces any attempt at social cohesion into an absurd exercise in futility.  But it's so easy; it's really more of an escape clause from deeper levels of understanding what justice is.  Things become very simple and cartoonish when you adopt this world view.  You identify problem "A" in the world but you can't do anything about it because that would require use of "force".  Within this ideology, the only thing you can do is to provide "choices" to people.  Understanding sociology and game theory exposes the absurdity of this position, much of what is viewed as 'choice' in a social context is nothing of the sort.  There really is so much I can say on this topic, but I'd rather hear what this forum has to say regarding a defense of this world view as popularized by Ayn Rand in Atlas Shrugged.


Just to show the absurdity of this argument I've created the following mad-libs below.  They are not a perfect comparasion, but I believe they get the point across.

If you don't like a multi-national corporation raping your country then start your own multi-national corporation.  Everyone who thinks it's a good idea will join it.  Other's won't unless you force them to.  We'll then let people figure out how great your multi-national corporation is.

If you see problems with your culture then start your own culture.  Everyone who thinks it's a good idea will join it.  Other's won't unless you force them to.  We'll then let people figure out how valuable living in a culture with your values are.

If you want to live in a state with your ideal conditions then start your own state.  Everyone who thinks it's a good idea will join it.  Other's won't unless you force them to.  We'll then let people figure out how valuable living in a state with your ideal conditions are.

If you want to live in a country that it's a global empire then start your own country.  Everyone who thinks it's a good idea will join it.  Other's won't unless you force them to.  We'll then let people figure out how valuable living in a country that isn't a war all the time is.

If you want to live on a planet where there is no war, poverty, disease, exploitation, misery and famine then build your own planet.  Everyone who thinks it's a good idea will join it.  Other's won't unless you force them to.  We'll then let people see how valuable your planet is.


You can see that this idea makes reform impossible.  Hence its lack of merit.

I've replied to a similar response as this above this post if you care to read it.

I think that an apple looks delicious.  I buy it from a vendor.  He benefits.  Turns out the apple is rotten.  The vendor did not know it.  I do not benefit.

If you think traders that are seeking to make speculative profits would be 'demolished' paying a 1% tax I guess that's your interest to uphold.  Not to make this about me, but just for an example, I pay more than 25% of my income in taxes, a large amount in property taxes and others.  Most people pay sales taxes on everything they buy, but if those who's 'work' consists of buying and selling scrips of paper that represent other peoples work, ideas and productive capacity can't afford to pay a scant 1%, I understand.  It is a 'free market' we are trying to uphold here.  I guess they will pay when they pay that 15% capital gains that they are working so hard to eliminate.  What you say?  Deferred taxation on earnings?  Never heard of it.

I guess the non-day traders need to start asking the question: how long can we stay the 'world leader' (or even a desirable place to live) with so many people making so much money off of doing absolutely no productive work?  Some speculation 'greases' the liquidity market, etc and that's all fine.  But at what point do we have an excess of speculation?  If the financial sector makes money on a host of non-productive and anti-long-term policies that adversely affect myself and my country how long should I stand for it?

Well that's the nature of political struggles.  Different interests fighting for power.  The main problem with our government is that people don't fight and if they did they wouldn't know what was even in their best interest to fight for.

How does the banking system work in your system?  What are the reserve requirements?  How about for insurance?  I don't see (and I may have missed) any means of gathering revenue for the government, how are you going to finance your enforcement of law?

I believe a reply I just posted to another person addresses most of what I would have to say in response to you regarding this post.

Please read it.

=]

I hope Atlas the best.  I just hope he can get over his Ayn Rand phase at some point.

Regarding your question, maybe it would be shorter if you explained exactly why you think it would be destroyed and then I'll tell you if I think you're right and if it's worth saving.

Thanks for the post.

Those examples are all way too broad to even debate with. What does raping refer to exactly? Strip mining and polluting someone's water? If  a national corporation does this, then this is actually a role for government to protect property rights in my opinion.


There is a very obvious logical fallacy here, and that is that in order to have a global empire in the first place, you must apply force. This same thing applies to those other examples you posted.

Good example.

Well you are knowingly engaging in a transaction with the vendor so that meets one of my earlier criteria.  But did the vendor know that some of the apples were rotten?  If so this is a clear cut case of the vendor being in the wrong as he would know that some person would eventually get a bad apple.  If he didn't, then why shouldn't have he?  It is his business to know the quality of his product, and it is truly in his better long-term interests to refund you to the money.  But this scenario is hardly analogous to all transactions.

Why do you put so much weight on somebody's age instead of show a willingness to defeat their points? If a kid told you blood was red, would you suddenly assume it wasn't?

I don't know if Atlas is 'a kid' and I don't really care, he makes reasoned points and has a strong understanding of what he's talking about, even if we don't agree on everything.


This is a legitimate point. The Tobin Tax is a bad idea.

If people of good will and upstanding moral character abandon the use of force do you think that people of ill-will will follow suit?  The role of government is a role of force through a system of law.  The abandonment of force means turning over the keys of government to those only of ill-will.  And that's presently the system we have.  Some may like it worded in the old axiom "if force is outlawed only outlaws will use force".

In order to have a global empire in the first place it does require force.  But it also requires force to dismantle it.  Is being a proclaimed pacifist enough while your labor is taxed from you and used to wage wars and sustain a global empire?  Does that make you a pacifist?  Does that make you a non-user of force?

This whole argument of force is such a semantic journey into linguistical never-neverland.  What we should be talking about is what is good and moral and how we determine what is and what isn't.  I promise you it's a more intellectually stimulating argument.  Maybe that's why so many of the classics focused on morality.

These "arguments" (examples using the same template as an earlier user made) are obviously absurd, that was their intent.  Were you also so quick in pointing out the absurdity of the original argument of me making my own exchange?  Is so, I didn't see it.  

In addition I can't just choose not to be subject to what happens on the stock market.  It has a massive influence on all our lives either directly or indirectly. Hence my wish to use "force" to reform it.

[As a correction: the corporation, planet and culture arguments wouldn't necessarily require 'force' as other examples would.]

I know this wasn't directed at me, but I have no qualms with anyone's age.  All I listen to is the reasoning of one's arguments and the facts they present.  If all of us did the same we'd all be better off.

As for the Tobin tax being a "bad idea" can you explain why?  To me that could mean that you find it inferior to all other forms of taxation.  If so, why do you find it less favorable than sales taxes, income taxes, luxury taxes, tariffs, value-added taxes, estate taxes, etc?

I completely agree. It's not illegal to apply force when force is being forced upon you. It's your right to defend your life, liberty, and property. This is one of the most essential human rights.

UPDATED: What we are debating is when it's okay to use force. If you can't kill someone for no reason, neither can the government.


See what I had to say about this above.


Ok, I would be very interested in this. I already think we've been debating this somewhat already.

That's just it though, it's not a 1% tax.  It's a 1% tax on EVERY trade, that's a 2% tax round trip.  That means I'd be paying $2,000 round trip for each standard lot ($100,000) FX trade.  Think about that for a second... $2,000.  That means I would need a many sigma event of a 200 pip move JUST TO BREAK EVEN. 

And that's just ONE trade.  I average over 100 trades per month, so that's over $200,000 PER MONTH in taxes.  You can't be serious if you think that doesn't totally shut down retail trading. 

In order for anyone to actually trade with that kind of tax, we'd have to have little to no leverage.  So instead of being able to comfortably trade standard lots with a $50,000 account, traders would need more like $2,500,000, and that tax would still be crippling.  That's not money normal people can come up with, so it DOES wipe retail people out of trading, leaving only the mega money (the banks) to trade. 

So now you've got a market with ONLY banks trading and any normal Joes actually in the market are buy and holders... who are now being crushed even easier by the banks because the banks are the only ones moving the market.

Actually as I understand it, it's a 1% tax on the profit of the trade. So, if I you had $100,000, make a quick swap into Euros and back in dollars, and end up with $100,001. You would pay a tax of $0.01.

I thought we just went through this though?  Reference a few posts up.  Now I'm back to being confused. 

If it's a tax only on the profit, then it does absolutely nothing to stop HFT because 1% isn't shit.  If it's a tax on the underlying value of the trade, then it will totally crush the retail markets.

As I understand it, it's a tax on the trade, both ways.
For sure, it'll reduce profits for traders. Basically you'll neep more pips. But you know what ? That the point. It's not complex to understrand that speculation add a premium on the price for the average consumer.
Of course it it important to have some, but we can't have infinite one. We need to put a limit somewhere.

As for the 1%, it's not a fixed one. Different markets could have a differents one, maybe by targetting a max % of speculation transactions within a market.
There as been some work one the value of the %, i think you can find infos on the wiki page

The larger your vision, the more effort you need to make it a reality. Why is this a surprise?

Status quo bias is a feature of reality. libertarianism acknowledges this, nothing more.

Most statists really overestimate how difficult it is to build a coalition of people who can agree on a complex issue and how to keep the coalition "pure" and corruption free. Libertarians have tried a lot of activism in the US. Libertarianism loses the political test because there are very few people for whom the "what's in it for me?" question is answered.

In my country, India, there are very few people who even agree to libertarian ideas. How long do you think it is going to take for me and the 1000 or so libertarians in India to convince 900 million indian adults?

You are free to consider this overly cynical, but the present libertarian world-view is built after a lot of trials of political activism that have failed, or are humongous projects on their own.

The law is a ham handed tool. It should not be used to make subtle changes in the world. If you start upon this path, there is no end to it.

Taxes is theft.

No thanks, I will not associate this kind of ordeal.

It's not reduced profits and needing a few more pips, it's a straight up impossibility that completely eliminates retail trading.

Tell me how retail trading, NOT HFT, adds a premium for the average consumer.  As I just explained, this basically turns the market into straight buy and hold land for anyone that's not a billionaire or bank, which is exactly what the banks and trading desks want.  That allows them to move the market and take granny's pension fund to the cleaner with zero complication from retail traders.


Add an exemption for retail traders and I'm more likely to be in favor of it.  Personally, I think HFT should just be straight up banned.  That solves the HFT problem and doesn't hurt people that aren't involved.

I don't have a lot of experience in trading/economy, maybe you can correct my thinking and tell me where i'm wrong.

(1) By doing speculation, you are expecting some winnings. Where does the money come from ? Is it only from wrong speculators, making speculation a zero sum game ? Or does it come by a premium on the last buyer ? (I think the answer is both)

(2) And for the tax, to me it's just a tax on your average pip/trade. If your (average rate - tax) is positive, you're still a winner. Since HFT has a very low expectancy, and play with volume, their winrate become negative.

The market is a zero sum game overall.  The winnings do have to come from someone else, but can you explain what you mean by "premium on the last buyer" and then maybe I can provide you with a more relevant answer?  What you're saying applies to HFT, but I don't see how it applies to regular retail traders.


Your second point is a bit captain obvious.  The point I was making is that you would have to be a trading GOD to have an average profit large enough to cover the tax, never mind actually make any money.  The necessary risk to bank on 200 pip moves to just break even is well... no one would even bother.  That's  like betting your house on a 1:1,000,000 chance of winning a free coffee.  
Did you see the post I made with the example numbers?  How on earth am I supposed to cover $200,000 PER MONTH in taxes?  How is that feasible for anyone that isn't a billionaire/massive bank?  I know people that do THOUSANDS of FX traders per month, that's over $2 MILLION PER MONTH in taxes.  You can't possibly think any retail trader makes that much money.  If I made even 1/10 of that I'd be laying on a beach in the Bahamas blowing fat lines off porn stars with Charlie Sheen, not sitting here debating this with you.  :-*

The premium on the last buyer is perhaps not a good expression.
Let's take oil as an example. What i mean by this premium, is the increase of the price paid by at the pump, by the final consumer of the product, which is due tu speculation.

A recent report show that this increase due to speculation could be as high at 20%
http://ourfinancialsecurity.org/blogs/wp-content/ourfinancialsecurity.org/uploads/2011/07/FINAL-Wrap-up-Gas-Prices-Speculation-Call-6-30-11.pdf (http://ourfinancialsecurity.org/blogs/wp-content/ourfinancialsecurity.org/uploads/2011/07/FINAL-Wrap-up-Gas-Prices-Speculation-Call-6-30-11.pdf)
http://www.youtube.com/user/TheRealNews#p/u/5/furSTUKwfOw (http://www.youtube.com/user/TheRealNews#p/u/5/furSTUKwfOw)

I'm ok with speculators making money, they are providing a service in markets, I just want to put a limit somewhere.

And about the tax amount, you're saying it won't be profitable without knowing how big that tax is. 1% is not a fixed number, i have now idea how low this tax should be, i just think there should be one.
Then we can make a bigger tax in comodities, a smaller in forex. Depend of the need for speculators within the market.
There will still be winner because we need speculators, there'll just be less.

In your example you're talking about a 200pip average to break even. How about a 20pip then ? maybe that's already enough to make HFT non profitable

Ok and what happens when speculation forces prices DOWN instead of up?  Trading is equally likely to bring prices down as it is to ramp them up.





While I understand where you're coming from, this is the same flawed thinking that makes a gas tax to lower oil consumption seem like a good idea.  In both the case of this tax and a gas tax, the people that are the LEAST problem to the system (retail traders and broke-ass people that can hardly afford gas to begin with) are the hardest hit, while those that are actually detrimental to the system (the big banks and people driving around in Hummers) can easily afford the tax so it has little to no effect on them.

You can't hit big players by taxing everyone equally.  When you tax everyone equally, the people hardest hit are the ones that were struggling to begin with, the littlest guys that weren't hurting anyone.  Meanwhile, you have next to no effect on the wealthy leeches and manipulators you're trying to stop.  This is why I'm saying that this tax wants to be viable, it needs an acception for retail traders and investors.

One of the primary purposes is to shut down the existence of HFT as we have established that it is parasitical - at least, my arguments as to why it is parasitical have yet to be countered based on anything derived from the tangible universe in which we live, but I eagerly await any angle on this which I have yet to consider.  There are a few ways I interpret the latter part of your post: that the big HFT banks would be able to continue with HFT?  Or that big non-HFT operations would simply squeeze the little guys out of the market?

If your business model is to make short-term trades all day this obviously would adversely affect your bottom line to a degree.  But it's hard to say how much as the exchange markets would look significantly different.  Estimates put the total amount of trade volume due to HFT at upwards of 70-80%, and that number is climbing.  To what we've already discussed through HFT you are affectively paying more at the exchange than you would otherwise be if HFT wasn't allowed.  So it does require a bit of imagination to see if this would be in your personal, short-term best interest which seems to be all that most consider.  Most the large banks are that you are probably worried about are insolvent and need to be liquidated in Chapter 7 bankruptcy, so I don't know to which 'big banks' you'd be speaking of that (in my perfect world) would be allowed to survive as is.

Another purpose is to raise revenue from the financial sector which has been having windfall year after windfall year and yet another reason is to drain the speculative swamp that is the financial markets.  Too much money is sloshing around the currency markets for certain, and I'd rather have a 1% Tobin Tax on this flow than capital controls which will probably be here soon anyway.

It may be the case that even after HFT was effectively stopped that this 1% tax would not be in your best interest, and that's your position to uphold.  My desire through this tax is to prevent the national bankruptcy of the USA and the return to a real economy, not our spectral apparition of an economy that has and can only continue to exist through our world reserve currency status.  I fear that when that this rug is pulled out from under us it will result in a crushing level of poverty for the vast majority of US citizens (and the world) and/or World War III.  That's what I wish to avoid, but if your own personal self interest seems to outweigh this outcome, then by all means propose a better program to head off the coming crisis.

It's a tax on the turnover of the market, not the profits.  The problem in taxing profits as we have seen extensively is that it is harder to implement, requires a much bigger bureaucratic apparatus (anything to minimize unnecessary bureaucracy we should be in favor of), doesn't gain as much revenue and is meaningless against the myriad of tax havens all over the planet.

Thanks.  Someone who understands that all of the US can't just trade scrip all day long with all the value that that scrip representing coming from somewhere.  The Tobin Tax is just 1 part of many on a return to a productive economy based on tangible real world asset growth namely products that people can buy and increasing levels of research and output.  This would just 1 nail in the coffin on the dominance of finance (and you can call it whatever you want but it's the same general group: Wall St, the oligarchy, the corporatocracy, the New World Order, the American Elite) in our political system. 

I'm saddened for the USA to see that a country like Iceland could hit an average of $40,000 per capita income (before they were bullied and sabotaged by the UK) while the USA rolls around in a cesspool of economic, social, moral, intellectual, and spiritual decay.  It's amazing to think what life could be if we weren't ruled and duped by monetarists, Malthusians, zero-growthers and other fanatics of different insane ideological viewpoints.

Big non-HFT operations would continue.  They wouldn't squeeze little people out of the market, the tax would do that for them.  What would be left of the little people would be buy and holders, now getting severely raped by markets controlled only by big money, because retail traders would be no more.


We do not disagree on HFT and we do not disagree on the need to get our economy back to reality, or at least more distant from money making money.  We don't even disagree on the potential usefulness of this tax... but why can't there be an exception for retail traders?   You keep overlooking this point.



Additionally, while I hate the financial services industry as much as you do, we both acknowledge that it IS a large part of the economy.  This tax would decimate it, and what becomes of all the millions of people that work in that industry?  The tax will make them jobless overnight, but there won't suddenly be a glut of manufacturing jobs for them to jump into in the same time frame.

The statement that "politics should stay out of economics" is the most political statement that can me made.  Typically it is made by the libertarian monetarists who become obsessed with the icons and symbols of an economy rather than how the whole system functions and to what purpose does it exist.  There is no economic system not upheld by government law, order and protection and no government not supported and reliant upon it's economic system.  They are in a symbiotic relationship; hence the term "Political Economy".  Unfortunately slippery slope arguments like this are hard to quantify and really are an unobserved phenomenon but make a great campaign slogan.  Can you (or anyone) point to an event subject to the 'slippery slope' phenomenon?  You can't because no such thing exists.  The observable historical reality is that government is going to be a vehicle for the interests that control it.  It always has been.  Anything that you'd accredit to a "slippery slope" I can show you the conflict between 2 interests in which 1 did not show up to the fight or not in sufficient strength to "carry the day".  Perhaps they didn't show up to that political struggle because they believed that "The law is a ham handed tool.  It should not be used to make subtle changes in the world.  If you start upon this path, there is no end to it."   That sounds like a great belief to convince your opposition of: a world view that seeks to eliminate opposition by invalidating the human right to be heard in the halls of government, subjecting its adherents into a blind alley of being a political inert mass, a political jellyfish adrift on a sea that truly is your master to which you have no say and no control.  To relinquish your self determination to a pitifully naive ideology that has and never will attainable, or should even be sought, should be given its due credit the social and economic dysfunction of our present global condition.

Unless the average person can identify what is in their best interest and organize and fight for it then please don't naively think that others will not fill this power vacuum.

If the world is filled with more than a small fringe minority that truly believe this then we can all expect to be very, very poor, very soon.

Perhaps these crude anti-historical ideas will die when people become so impoverished from their implementation that they'll be forced to pick up some books and read.

Problem: how would you prove that someone is HFT?  Who would police it?  How would you pay for whomever would be policing it?

BIG Problem:  How would you prevent those charged with policing it from falling under the sway of those that they are supposed to police?

There was a reason I was in favor of this over the idea of just 'banning it', it is because these questions came to mind and there was no workable answer.

Perhaps you should be considering the following from your angle: how much would the tax need to be to eliminate HFT by implementation but "save" the retail traders?

In addition the big market worth going after is the currency markets, not the stock markets (as much).  Is that where you do most your trading?

Are you just referring to the securities markets being a zero sum game or the entire economy (the larger Market) being a ZSG?  I disagree with both points, the latter more than the former, but both nevertheless.

Why do you think that a 'large bank' would be trading a making losses in these markets because they are the only one's who can afford it?  So by virtue of their deep coffers they are doing trades that net less than 1% profit?  Why would they do that?  Simply because they can afford to throw money down a hole?  Am I missing something in your argument?

Not everything is going to be solved by the Tobin Tax, that is true.  There are other means for that I'm willing to discuss.  But how is a Tobin Tax 'taxing everyone equally'?  It's not.  It's effectively outlawing HFT in practice and not everyone has HFT server farms and multiple mathematician PhD's inventing custom exploitation algorithms to make gains on minuscule market moves.  Does everyone HFT?  No.  Do some people make their money off of frequently trading stocks in the short-term?  Yes.  These people it would have a variant impact on, but remember that 70% of the existing trades on the market wouldn't exist so it would be a massive shift in the existing system.  The Tobin Tax at a 'hefty' 1% returns more (what I would call) sanity to the markets: markets based on mid to long term investment to efficiently allocate capital.  The modern markets resemble more of a casino in their operation than a system to 'efficiently allocate capital'.  This would do a hell of a lot in returning to what it is supposed to exist for.

Because it matters not whether I'm Goldman Sachs, Citibank, myself, or poor grandma Jensen from the farm in Idaho.  If I do a standard lot FX trade, I'm slapped with a $2,000 tax liability just like that.


Again I'll ask, why can there not be an exception for retail traders?

Why should retail trader be exempted from this tax?  I've read everything that you've posted so far and I'm unconvinced that you should be not subject to this tax.  Please explain what you feel you are adding to the economy by making these trades?  Why should your ability to buy and sell and make minor profits on short-term speculative market gyrations be viewed by anyone other than yourself as beneficial?  I can imagine the arguments that you are going to make but I'd much rather you make them than me impose what I think they're going to be on you.

 ;)

I don't disagree that politics and economics cannot be separated. But do you agree that the law is a ham-handed tool to resolve issues that arise rarely?


Ludwig Von Mises's book on interventionism and the real life experience of India's absolutely horrid license raj are full of examples of laws that have been passed ignoring economic effects and resulting in great suffering.


You should consider the cost-benefit analysis of the probability of your being able to convice a majority of the people in the government that affects your life and your ability to carve your own sphere of autonomy and voluntary trade.
And technological changes affect this, greatly. Before bitcoin, I was very skeptical of even the possibility of agorism. Now it seems really feasible.

I agree with patri freidman's ideas on this. The systems competing in the world are a function of the market for governance.


Not thinking of entrepreneurial solutions is the real relinquising of self determination.
Thinking "Oh this problem will be solved only if I have 1000000 people on my side" is relinquishment.

This isn't a problem that "arises rarely" it's chronic, it's widespread, it's perpetual.  It's going on everyday without exclusion.  How is that "rarely"?  How is implementing a law that stops parasitical activities "ham-handed"?


Nice selective quote mine collapse there by the way.  But you're avoiding the question I posed.
 



You start by convincing people, the politians usually play catch up.  This isn't execlusively for my own self interest, a foriegn concept on a forum such as this, I know.  If people are reasonable they'll be convinced, if they are ideologically driven on some market founded faith-based doctrine, then perhaps not.  But I'll never know if I don't try.




Quaint how you cede to me in this statement that you believe that you or I shouldn't be heard by our government for a redress of grievances but seem to hold tenable that there is no problem with that.  First of all how is anything to do with being 'entrepreneurial' related to taxation and regulation?  History provides testament argument against your second statement.  Mass movements are never easy but they only happen for those 'foolish' enough to believe they can change the system.

Reminds me of the argument that if you eliminated the income tax then all the tax preparation services would go out of business.  To me, this is as near a perfect example of the 'broken window theory' you can get in practice.  There is a large group of 100,000 or more people probably involved in preparing taxes and writing tax prep software.  If we eliminated this need or greatly reduced this need by only passing income taxes past a certain threshold then they would be out of a job, no doubt.  But they are already employed whatsoever from the government largess doing work with 0 productive capacity, scant justification for social necessity,  much of which basically involves trying their hardest to defraud the treasury by a maximum degree of tax avoidance, etc.  We must ask ourselves do we allow for the slow drain on our economy by fearful indecision in the face of the clearly wasteful enterprise that is solely propped up by government in the first place?  I would argue not.  Much of this argument applies to the financial services industry.

Our financial services industry needs to shrink.  It has been growing at the expense, not at the benefit of the 'real economy'.  It made 40% of corporate profits in the past few years.  I've heard statistics that it is roughly 17% of our entire economy now.  This is much too high and has only been allowed to exist through: the unsustainable financial deregulation that has been unmitigated disaster, nearly 0% interest showered on the too-big-to-fail banks, bailouts, regulatory capture, quantitative easing etc.

In my system though, there would be job-retraining programs and massive public works and research programs as there is no shortage of these things that need to be done.

I am much for ending the global empire too, but not in favor of dumping a million solders on the streets with no path for rejoining the workforce.

Entrepreneurship and taxes/regulations are often at odds with each other. Taxes and regulations are barriers where you often need to seek legal professionals for compliance help and is a barrier to market capital wise and effort wise. They often create a protection "moat" around your established competition as well.

My only response will be to ask you whether you really want to start down the road of making judgment calls about who is and who is not benefitial to society, and structuring policy and tax laws to reflect those judgments.

The economy has already been screwed up from government intervention, capital must shift away from things like student loan debt, housing, service sector. Yes the repeal of Glass-Stegal, while keeping the government-backed FDIC insurance was a major factor in allowing the leverage and bubble to form.

See, in your system, we would just shift the money to the already-in-a-bubble education system, temporary employment measures, and more government bureaucrats (often just as parasitic as the finance industry). The free market is already shifting back to an almost-forgotten-system of apprenticeship. I can't think of anything that would fuel real job-creation more than the spirit of entrepreneurship through apprenticeship.

Sorry for my tardiness in my response. I need a way to aggregate my answers so I can know who I responded to in what thread and when.

Firstly, my "system" isn't a system, it's a set of axioms which define the laws regarding the interactions between men. They determine when and if a forceful response is warranted.

To answer your question about a banking system. That's rather easy. Devise your own banking system and convince people in a non-coercive way to join you. I could care less whether or not you have reserve requirements, issue insurance policies against loss or other whatnot. It's your problem if your system fails or succeeds. Assuming you use your clients property in an non-fradulent way (as per a contract), do as ye will. However if you think you can force a specific economic system on everybody, I would not advocate that in any way.

I don't believe it's necessary to "gather" revenue for the "government". I believe it's possible to find your own means of defensive protections just like you can shop for shoes or groceries. It's about choice. Notwithstanding that, I do see the difficulty in some aspects of the application of law, being voluntary, that could cause confusion if there wasn't a standardizing body. Either way centralizing force into the hands of the few is not my idea of a sustainable justice system. I'd like to try a free market of competing governing bodies vying for yours and my business.

Hopefully the best will come out on top.

What that we are standing at the hilltop of some 'slippery slope' that is so often cited around here?

I hate to inform you of this but this already being done by people without the moral qualm against doing so, (i.e, creating and molding law) in their own best interest.  Is it your argument that only people with nothing to gain in a system are impartial enough to be fair mined?  Then who should govern the affairs of men?

To step into the realm of questioning what is moral and what is antithetical to civilization is the responsibility of all persons wanting to exist in a civilized society.  If any of the past great philosophers would have such a squeamish disposition regarding the topic of morality and law we would be living in much more primitive conditions.

So yes.  I do want to go down 'this road'.  To determine what is moral and not is not only a social imperative, it is our highest calling as citizens.

This post is so discombobulated that I really don't know where to begin.  Proposing that you somehow know what 'my system' is based off a snippet quote that lacked a voluminous explanation of the sake of brevity is laughable.  Yet, as it is so common in forums, if you leave an opening for where there is even the slightest ambiguity regarding what someone is implying then all manner of other positions that were never proposed and never held by the author are inferred based off of what the respondent seeks to identify with things they've heard other people saying that hold beliefs to which they believe are of a similar political or social persuasion. 

Please do not make this mistake with myself.  My ideas are my own and I use language very carefully.  I strive to pick and choose ideas from people based on their merit alone.  You probably identify me as someone holding a host of beliefs that I do not.  I would be willing to bet that I know more about topics to which you've never posted, inferred from the things you have posted than you could derive from me based on what I've posted - BUT, I wouldn't ever make an argument based on such assumptions.  Blindly swaggering into the 'arena' of ideas and imposing what you believe your 'oppositions' ideas on them isn't a way that either of us can learn anything from each other.

These ideas are very romantic yet so scattered that I don't know where to begin. This post continues the ongoing opinion in these 'free market' circles of the futility of working to do good using force.  All of this I've already harped on repeatedly on this thread, so I won't do it again.  Moreover you don't even counter the previous arguments I've made to this point, basically repeating what as already been hashed over as if I'm to reword my arguments for every person unwilling to read the entire thread.

On a side note, as it would take dozens of pages to even decipher what you specifically mean by much of this I'll just say the following:

I just hope that you'll continue to read all manner of historical, political, social, economic and other books of academic pursuits and be willing to abandon ideas and beliefs held now to the fairness and trust of your own ability to reason.  Some people have so much stake in their beliefs that they feel they have to hold them long past where a reasonable person would otherwise cast them off.  If you have any books to which you think would convince me that what I've specifically said on this thread is incorrect please link them here and I'll be sure to read them if I haven't already, but 'avalanche' style posts like this in which you try to make more than 1 or 2 points in a handful of sentences doesn't well make your point and shows that you either are lacking in effort to fully explain what you mean or lack an understanding of what you actually believe with any depth.

I found this bill that Peter DeFazio and Paul Wellstone introduced in the year 2000.

U.S. Congress Concurrent Resolution
 on Taxing Cross-border Currency Transactions to Deter Excessive Speculation
 (H.Con.Res.301)
Congressman Peter DeFazio (D-OR) and Senator Paul Wellstone (D-MN)
 (Introduced April 11, 2000)


It is the sense of the Senate and the House of Reprentatives that the United States should show leadership by enacting, in concert with the international community, transaction taxes on short-term, cross-border foreign exchange transactions to deter speculation. The adoption of such Tobin-style taxes should be done in coordination with a large number of nations, in a fully transparent and accountable manner, with the revenue dedicated to urgent global needs.

A. Introduction

WHEREAS every day over $1.8 trillion in currency exchanges moves across national borders, a volume far greater than in the last decade; and

WHEREAS such rapid movement of foreign currency has created some additional opportunities for legitimate productive investment, but also has created the potential of triggering national currency collapses and resulting financial crises;

I. Currency Market's Volume and Volatility

WHEREAS daily trading in currency markets increased from $0.2 trillion to over $1.8 trillion in just over a decade, from 1986 to 1998; by comparison, the trade in goods and services for all countries for an entire year is only $4.3 trillion; and, therefore, in less than a week, foreign exchange transactions exceed the entire annual volume of world trade in goods and services;

WHEREAS over 85 percent of these transactions are of a purely speculative nature where investors bet on whether currency values and interest rates will move up or down, and thus bear little or no relationship to the production and trade in goods or services;

WHEREAS more than 40 percent of all these transactions involve round trips of fewer than three days; and over 80 percent of global foreign exchange transactions involve round trips of less than a week;

WHEREAS the vast majority of transactions take place in relatively few financial centers, particularly the United Kingdom (32 percent), the United States (18 percent), Japan (8 percent), Singapore (7 percent), Germany (5 percent), Switzerland (4 percent), Hong Kong (4 percent), and France (4 percent);

WHEREAS these speculative transactions themselves often cause short-term fluctuations of exchange rates, thus provoking more speculation;

II. Sovereignty and Stability of Nations Threatened

WHEREAS such volume and volatility of liberalized capital flows not only threatens national currency devaluation and financial crises, but disrupts the ability of nations to establish equitable and just economic policies; to intervene to protect their own currencies; and to provide support for needed social and environmental programs;

WHEREAS in the past, central bank reserves were sufficient to combat any speculation on their country's currency; now, however, financial speculators have created a daily market volume which dwarfs all of the world's central banks combined; and therefore, when a country cannot defend its currency, it effectively loses control of its monetary policy;

WHEREAS such speculative pressure on a currency results in higher interest rates than is warranted by internal monetary conditions; leading to a lowering of economic growth and an increase in domestic unemployment with the related social problems;

WHEREAS there is overwhelming evidence that the lack of stability helps to cause financial crises with increasing frequency (1992/93 Europe, 1994 Mexico, 1997 Southeast Asia, 1998 Russia, 1999 Brazil), even in countries where basic economic fundamentals are sound, and the market reacts irrationally to rumors ("herd behavior"), causing "speculative bubbles" to burst when speculators flee a particular currency;

WHEREAS such financial crises can have enormous impact worldwide; for example, the Asian currency crisis lowered the world growth projection for 1998 by one percent and increased worldwide unemployment by 10 million; and unpredictable exchange rate fluctuations create additional uncertainties for entrepreneurs, making rational planning more difficult;

WHEREAS such crises have not only economic impact, including exacerbation of global economic inequality; but also social impact including increased unemployment, price increases and disruptions, plant closures, poverty, human rights violations, diversion of resources from sustainable development, and social upheaval; which burden poor, indigenous, and middle-income populations most heavily;

WHEREAS such impacts in other nations have a spillover effect in the United States and elsewhere by contributing to increased trade imbalances, dumping of low-price products on overburdened markets, and contributing to increased unemployment, volatility in agriculture markets, and stagnant or falling wages;

WHEREAS de facto support by governments and international institutions of excessive financial speculation may undermine desired macroeconomic policies and contribute to moral hazard and irresponsible market behavior;

III. Transaction Taxes as a Partial Solution

WHEREAS excessive speculation could be curbed by a very small tax of between 0.1 percent and 0.25 percent on each cross-border currency transaction (now commonly called "Tobin-style taxes", as proposed in 1978 by Nobel prize winning economist James Tobin), or an alternate two-tiered version (proposed in 1996 by German economist and IMF consultant Paul Bernd Spahn);

WHEREAS such a tax reduces incentives for short-term speculation while remaining small enough to leave longer-term investments intact; with the resulting increased stability of exchange rates servings as a stimulus for productive trade;

WHEREAS the senior economist of the Federal Reserve Bank of San Francisco has written, "...if your goal is to limit short-term speculation, it is hard to beat the Tobin tax";

WHEREAS the revenues from such a tax, projected to be between $50 billion and $300 billion a year, would provide urgently needed resources to combat global and local crises;

WHEREAS concerns voiced about tax havens and the collection and enforcement of such taxes have been researched by economists, and plans proposed to answer these concerns, such as collection at settlement sites to ensure universality and to track derivative instruments, as proposed by Schmidt;

WHEREAS there is already an international movement in support of a transactions tax, including passage of a resolution in the Canadian Parliament, introduction of resolutions in the European Parliament, the French Parliament, and British House of Commons, substantive discussion of the issue in the European Parliament and the parliaments of Switzerland and Germany, plus a chapter in the current Finnish government rules;

Now, therefore be it resolved by the U.S. House of Representatives, that -

(1) It is the Sense of the House that -

(A) The United States should show leadership by enacting, in concert with the international community, transaction taxes on short-term, cross-border foreign exchange transactions to deter speculation. The adoption of such Tobin-style taxes should be done in coordination with a large number of nations, in a fully transparent and accountable manner, with the revenue dedicated to urgent global needs;

(B) The United States should build support for and advocate this position at the World Bank and the IMF, as well as within other regional and international organizations, including the OECD, the G-8, and the newly established G-20;

(C) This should not be done in isolation of other initiatives for reform of global finance. Instead, the United States should continue to explore other options together with the international community. These options include, but are not limited to: tougher transparency rules, tighter reserve requirements, creation of exchange rate "target zones", national currency controls, cash requirements for mutual funds, and stronger source-country measures such as disincentives for short-term lending.


 The office of Congressman DeFazio is located at:
 2134 Rayburn House Office Building, Washington DC 20515
 202.225.6416 ph
 202.225.0032 fx
 E-mail: peter.defazio@mail.house.gov
 Web: www.house.gov/defazio/index.htm

 The office of Senator Wellstone is located at:
 136 Hart Senate Office Building, Washington DC 20510
 202.224.5641 ph
 202.224.8438 fx
 E-mail: senator_wellstone@exchange.senate.gov
 Web: wellstone.senate.gov

 For further information, contact Tom Vinson
tom.vinson@mail.house.gov

Tobin Tax Initiative
CEED/IIRP, PO Box 4167
Arcata, CA 95518-4167
phone: (707) 822-8347, fax: (707) 822-4457
e-mail: cecilr@humboldt1.com

Home | Who Are We | What are Tobin Taxes | Tobin Tax Policy | Tobin Tax Bibliography
US Campaigns | Campaigns Around the World | Contact the Initiative

 The Tobin Tax Initiative is a project of the Center for Environmental Economic Development.

So how do you propose a tobin tax is implemented? And for what currencies?

BTW Here is an interesting article from Themis Trading about the negatives of HFT.

http://www.themistrading.com/article_files/0000/0348/Toxic_Equity_Trading_on_Wall_Street_12-17-08.pdf

LIQUIDITY REBATE TRADERS

To attract volume, all market centers (the exchanges and the ECNs) now offer rebates of
about 1⁄4 penny a share to broker dealers who post orders. It can be a buy or sell order, as
long as it is offering to do something on the exchange or ECN in question. If the order is
filled, the market center pays the broker dealer a rebate and charges a larger amount to the
broker dealer who took liquidity away from the market. This has led to trading strategies
solely designed to obtain the liquidity rebate.

In this case, our institutional investor is willing to buy shares in a price range of $20.00 to
$20.05. The algo gets hit, and buys 100 shares at $20.00. Next, it shows it wants to buy
500 shares. It gets hit on that, and buys 500 more shares. Based on that information, a
rebate trading computer program can spot the institution as having an algo order. Then,
the rebate trading computer goes ahead of the algo by a penny, placing a bid to buy 100
shares at $20.01. Whoever had been selling to the institutional investor at $20.00 is likely
to sell to the rebate trading computer at $20.01. That happens, and the rebate trading
computer is now long 100 shares at $20.01 and has collected a rebate of 1⁄4 penny a share.
Then, the computer immediately turns around and offers to sell its 100 shares at $20.01.
Chances are that the institutional algo will take them.

The rebate trading computer makes no money on the shares, but collects another 1⁄4 penny
for making the second offer. Net, net, the rebate trading computer makes a 1⁄2 penny per
share, and has caused the institutional investor to pay a penny higher per share.


PREDATORY ALGOS

More than half of all institutional algo orders are “pegged” to the National Best Bid or
Offer (NBBO). The problem is, if one trader jumps ahead of another in price, it can cause
a second trader to go along side of the first one. Very quickly, every algo trading order in
a given stock is following each other up or down (or down and up), creating huge, whip
like price movements on relatively little volume.

This has led to the development of predatory algo trading strategies. These strategies are
designed to cause institutional algo orders to buy or sell shares at prices higher or lower
than where the stock had been trading, creating a situation where the predatory algo can
lock in a profit from the artificial increase or decrease in the price.

To illustrate, let’s use an institutional algo order pegged to the NBBO with discretion to
pay up to $20.10. First, the predatory algo uses methods similar to the liquidity rebate
trader to spot this as an institutional algo order. Next, with a bid of $20.01, the predatory
algo goes on the attack. The institutional algo immediately goes to $20.01. Then, the
predatory algo goes $20.02, and the institutional algo follows. In similar fashion, the
predatory algo runs up the institutional algo to its $20.10 limit. At that point, the predatory
algo sells the stock short at $20.10 to the institutional algo, knowing it is highly likely that
the price of the stock will fall. When it does, the predatory algo covers.
This is how a stock can move 10 or 15 cents on a handful of 100 or 500 share trades.

AUTOMATED MARKET MAKERS

Automated market maker (AMM) firms run trading programs that ostensibly provide
liquidity to the NYSE, NASDAQ and ECNs. AMMs are supposed to function like
computerized specialists or market makers, stepping in to provide inside buy and sells, to
make it easier for retail and institutional investors to trade.

AMMs, however, often work counter to real investors. AMMs have the ability to “ping”
stocks to identify reserve book orders. In pinging, an AMM issues an order ultra fast, and
if nothing happens, it cancels it. But if it is successful, the AMM learns a tremendous
amount of hidden information that it can use to its advantage.

To show how this works, this time our institutional trader has input discretion into the algo
to buy shares up to $20.03, but nobody in the outside world knows that. First, the AMM
spots the institution as an algo order. Next, the AMM starts to ping the algo. The AMM
offers 100 shares at $20.05. Nothing happens, and it immediately cancels. It offers
$20.04. Nothing happens, and it immediately cancels.


PROGRAM TRADERS

Program traders buy or sell small quantities of a large number of stocks at the same time,
to trigger NBBO or discretionary algo orders, so as to quickly juice a market already
moving up or down into a major drop or spike up.

Because so many algo orders are pegged and are being pushed around by other high
frequency traders, program traders are like a fuse. When they light it, that’s when things
get really going. This is especially so in volatile markets when things are very shaky and
people are very nervous like they are now. Keep in mind that many algo orders must
achieve a percentage of volume that matches the market in the stock. So if the program
traders can increase the volume on an individual stock just enough, they will trigger even
more algo buying or selling.

Program traders profit by having an option on the market. Their objective is to push that
option into the money by a greater amount than what they used to get the market moving.

MARKET CENTER INDUCEMENTS FOR HIGH FREQUENCY TRADERS

Most high frequency trading strategies are effective because they can take advantage of
three major inducements offered by the market centers and not typically accessible to retail
or institutional investors.

1. Rebate traders trade for free. Because they are considered to be adding liquidity,
    exchanges and ECNs cover their commission costs and exchange fees. This makes it
    worthwhile for rebate traders to buy and sell shares at the same price, in order to
    generate their 1⁄4 penny per share liquidity rebate on each trade. Exchanges and ECNs
    view the order maker as a loss leader in order to attract the order taker. In addition, the
    more volume at different prices, even if that means moving back and forth a penny, the
    more money the market center makes from tape revenue. Tape revenue is generated by
    exchanges and ECNs from the sale of data to third party vendors, such as Bloomberg
    for professional investors, and Yahoo for retail investors.

2. Automated market makers co-locate their servers in the NASDAQ or the NYSE
   building, right next to the exchanges’ servers. AMMs already have faster servers than
   most institutional and retail investors. But because they are co-located, their servers
   can react even faster. That’s how AMMs are can issue IOC orders – immediate or
   cancel – sometimes known as “cancel and replace.” They issue the order immediately,
   and if nothing is there, it is canceled. And that’s how AMMs get the trades faster than
   any other investor, even though AMMs are offering the same price. AMMs pay large
   fees to the exchanges to co-locate, but it obviously has a decent return on investment.
   According to Traders Magazine, the number of firms that co-locate at NASDAQ has
   doubled over the last year.

3. People often wonder whether it is fair or legal for program traders to move the market
   the way they do. Everybody forgets, however, that in October 2007, just a little more
   than a year ago, the NYSE very publicly removed curbs that shut down program
   trading if the market moved more than 2% in any direction. The NYSE said it was
   making the change because “it does not appear that the approach to market volatility
   envisioned by the use of these ‘collars’ is as meaningful today as when the Rule was
   formalized in the late 1980s.” On a more commercial level, the NYSE had been at a
   competitive disadvantage because other market centers that didn’t have curbs were
   getting the program trading business.


What Is The Effect of All This Toxic Trading?

1. Volume has exploded, particularly in NYSE stocks. But you can’t look at NYSE
   volume on the NYSE. The NYSE only executes 25% of the volume in NYSE stocks.
   You’ve got to look at NYSE listed shares across all market centers, such as ECNs, like
   the NYSE’s own ARCA, or dark pools, like LiquidNet. Traders Magazine estimates
   high frequency traders may account for more than half the volume on all U.S. market
   centers.

2. The number of quote changes has exploded. The reason is high frequency traders
   searching for hidden liquidity. Some estimates are that these traders enter anywhere
   from several hundred to one million orders for every 100 trades they actually execute.
   This has significantly raised the bar for all firms on Wall Street to invest in the
   computers, storage and routing to handle all the message traffic.

3. NYSE specialists no longer provide price stability. With the advent NYSE Hybrid,
   specialist market share has dropped from 80% to 25%. With specialists out of the way,
   the floodgates have been opened to high frequency traders who find it easier to make
   money with more liquid listed shares.

4. Volatility has skyrocketed. The markets’ average daily price swing year to date is
   about 4% versus 1% last year. According to recent findings by Goldman Sachs,
   spreads on S&P 500 stocks have doubled in October 2008 as compared to earlier in the
   year. Spreads in Russell 2000 stocks have tripled and quoted depth has been cut in
   half.

5. High frequency trading strategies have become a stealth tax on retail and institutional
   investors. While stock prices will probably go where they would have gone anyway,
   toxic trading takes money from real investors and gives it to the high frequency trader
   who has the best computer. The exchanges, ECNs and high frequency traders are
   slowly bleeding investors, causing their transaction costs to rise, and the investors
   don’t even know it.

Fantastic find.  Thanks for the link.  This appears to have shut up anyone who could argue against the Tobin Tax with their fanatically simple notions of 'freedom' and 'free markets'.

1 improvement I've added to the proposed tax.

T-Bills would be exempt or have a greatly reduced tax, like 0.1% rather than 1%.

Thank you, that is all.