After more research on Derivatives and Fast Trades, I realize I have combined Financial products and a Computerized Trading Platform: Derivatives and Fast Trades . Please read on!
While derivatives are indeed, Weapons of Mass Destruction, they are a Financial product . According to Warren Buffet, Derivatives which include CDO’s ( credit default swaps) are Weapons of Mass Destruction. These financial products brought us the Fiscal collapse of 2008. They are too Risky to remain opaque and un taxed. They comprise bonds of dubious quality with a variable range of interest rates depending on their degree of risk. As you may recall, these Bonds were highly leveraged and backed by air in 2008. That’s why the Banks, some Hedge Funds and AIG were bailed out by the taxpayers . If we had allowed them to fail, or made the Bankers responsible and accountable for these Financial Instruments, the Global Economy wouldn’t be suffering today.
Instead, we bailed out the bankers at the people’s expense. Seven yrs later we’re still suffering. Austerity does not work. Propping up the lenders and not the borrowers does not work. To take risk out of the system, I’ve proposed a moderate tax on Derivatives. I’ve revised my thinking and have corrected the amount of revenue to be collected when Derivatives are taxed at 6 Basis Points. if we taxed Derivatives 6 basis points, which is 6 cents on a $100.00 bundled of every trade or .0006 cents at $ 1.1 Quadrillion dollars ( which is $1,100 Trillion reported as the amount of Derivatives being traded February, 2015) the country would reap $660 Billion in revenue.
When I first reported on the volume of Derivatives in February , 2014, Derivatives were only $ 360 Trillion now they are $1.1 Quadrillion . An awesome amount considering that these instruments are unregulated and have created a system that is Too Big To Fail , even more unstable then in 2008.
- At over a Quadrillion traded, wouldn’t you prefer less risk and a balancing of our system to favor stability? It’s our choice? But wait , there’s more, as they say in “infomercials”!
If we taxed Fast Trades ( millisecond trades) at the same amount as Derivatives, we would add Several Billion more to our revenue Stream. Why Fast Trades, because they are a risky, opaque automated trading platform, which depends upon a mathematical model, algorithms. They are non competitive and have an unfair advantage. When you consider the Billions that move through the market every day, the Country would reap Billions more from another revenue stream. Fast trades are in effect Insider Trading. These opaque custom, computerized millisecond trades make the market. No human can type fast enough to compete. Additionally, these trades make balance sheet reporting obsolete, since trades are based on speed and profit motives, not value investing. That’s why they should be taxed. Should they be regulated, probably, but we’ll spend years trying to compete with an industry that has unlimited funds at the People’s expense. I’d rather tax them and stop inequality now. In France and other countries, when these trades, which comprise 50% of our market , were taxed, risk and trading were reduced by 10%. I call this a win win. For an understanding of Fast Trades, I’ve enclosed Mark Cuban’s Blog Post .
I understand this is may be a novel idea! Like everything else, this is dependent on Congress for Passage. However, we need money now, we need good paying jobs now, we don’t need to create more Risky Systems at our expense. The Hedge Funds and Bankers have partied at our expense for 7+ yrs. Wouldn’t you agree it’s time to Resurrect the Middle Class? Finally, we have a way to move forward and quickly. Why not support #TaxRiskStopInequality, now!
- Insist upon it and we can start moving forward.
Thanks for reading, following and sharing this information. Wishing everyone only the best. Joyce