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comment by craig
craig  ·  4809 days ago  ·  link  ·    ·  parent  ·  post: What is a Tobin Tax?
>I think you are right about unintended consequences of a Tobin tax. I think it'd be more effective to simply put a minimum amount of time that you must hold any given asset. Trades are timestamped, so it would be easy. Even 1 hour would probably be an improvement.

Doing this would cause massive volatility, everybody would be stampeding in and out of assets at the same time. If you really want to stop HFT (which on the evidence available is actually nothing to do will the current market woes) you could simply make order cancellations more expensive, this would stop them all in their tracks. But I think this would solve nothing in the longer term.

>IMHO. It was too easy for Greek politicians to take the easy road when Germany's good credit was feeding their addiction. I really don't see the EU coming under one effective fiscal policy, and I think that is the only real solution. For that reason, I think the Euro is probably going to die.

Still seems like a political decision to me, the whole reason for the crises lunching from drama to drama is the refusal to let the euro die. But of course politicians would rather do any amount of damage than see their power bases eroded.





martin  ·  4532 days ago  ·  link  ·  
Curious if you still feel the Euro is going to die? Are they just prolonging the inevitable? A long painful death instead of a quick painful death?
mk  ·  4809 days ago  ·  link  ·  
Doing this would cause massive volatility, everybody would be stampeding in and out of assets at the same time.

If it was 1hr after the individual buy, it shouldn't synchronize sales. The buys are at different times, so the sales will be too.

If you really want to stop HFT (which on the evidence available is actually nothing to do will the current market woes) you could simply make order cancellations more expensive, this would stop them all in their tracks.

Maybe, but it might be difficult to make them expensive enough that it had an effect without other unintended consequences.

Still seems like a political decision to me, the whole reason for the crises lunching from drama to drama is the refusal to let the euro die. But of course politicians would rather do any amount of damage than see their power bases eroded.

And yet, saving the Euro (by centralizing the EU fiscal policy) would be a big erosion of power for member-state politicians. I think they are just not willing to face what it will mean for the EU, even as it looks more and more inevitable.

AnonymousCoward  ·  4809 days ago  ·  link  ·  
>Doing this would cause massive volatility, everybody would be stampeding in and out of assets at the same time. If you really want to stop HFT (which on the evidence available is actually nothing to do will the current market woes) you could simply make order cancellations more expensive, this would stop them all in their tracks. But I think this would solve nothing in the longer term.

I don't think he's saying they'd all be able to be sold or bought at the same time, just that 1 hour after it was bought, it could be sold.

Something bought at 8:30 could be sold at 9:30. It wouldn't make buying or selling only possible on the hour.

craig  ·  4809 days ago  ·  link  ·  
As anybody who knows day trading will tell you most traders trade at the start and the end of the day, but anyway I don't know for sure what the effect would be, nobody does.