Worth A Look
First he implies that traders caused the crisis, when the reverse is closer to the truth (the shorts were the only voice of sanity through the whole farce) then he says the tax would raise tons of money, which could be true only if it does not work, i.e., doesn’t discourage trading.
We think taxing transactions instead of capital gains would be a good idea, except that “instead of” never happens when government is concerned.
And while we are griping, why do these reformers always end up giving money to the government? If he really wants to slow trading, why not forget the tax and just restore regulated (i.e. higher) fees on brokerage . Then the brokers not the government would get the money, and we could go back to the old days when brokers served clients rather than front-running them.
Enough. Must be mindful of the great blogging temptation: to say the most about the dumbest stories.
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We’re not Bernanke bashers, but the Fed chief’s grudging concessions on disclosure are emblematic of the core problem. Informed markets work pretty well. Markets failed to detect and correct the mortgage catastrophe because they were denied information both by “the ideology of modern finance” (see Panic, Part II) and by government policy that actively encourages bank secrecy for fear the peasants would riot if they knew what was going on. Bernanke’s argument that the Fed should disclose banks that draw on special facilities, but only after it’s too late for markets to react, continues that policy.
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Memo to: Fox in Henhouse Department
A reform effort support by Geithner and the eight major trade association of the firms that would be regulated has got to be a doozie. Good work!
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We think bond ETFs are a great invention for the lay investor, but this piece offers some sound if obvious advice: don’t overpay
Tags: Andrew Redleaf, Richard Vigilante, Whitebox, WSJ
