Friday, May 26, 2017

Algorithmic Trading should be minimized with Financial Transactions Tax

This is typical NPR whitewash.

They don't give many details, I don't think he mentions the most famous Quant meltdown of all, LTCM, it was the biggest bailout-thing of any kind in history at the time, only to be outdone later.  It was a famous hedge fund based on the math from the "economics nobel" award winning formula by Scholes et al in the 1970's for figuring out the average math for commodities, therefore a fair way to price them.  So LTCM was based on the idea that if you just raise billions and borrow hundreds of billions more, and bet against all the commodity price levels that don't meet the math, and ride the average profits.  All the big money, smart people, and big banks believed it, or so they said.

Problem is, in all forms of gambling, there's always one more number, and when that comes up...  In this case, it was the post-Soviet meltdown of Russia, caused by the western backed (if not created) Yeltsin regime.  But all the big banks and everybody had bought into LTCM, so it had to be slowly "unwound" over months to prevent the entire economy from tanking.  A scraped profit for a few had put the entire economy at risk (and risk is a very big cost).

To the extent we even allow trading in stocks, bonds, and commodities, those trades should be taxed to discourage clever ways of "gaming" them which creates only zero sum gains at best, if not public losses in the aggregate.

The so called transaction tax.  That's the chief tool to crack down on excessive trading and re-trading, because small percentages add up when you are doing trillions of trades to gouge a profit.

Right now we leavy heavy and unfair 8% tax on "sales" of ordinary commodities, like clothes.  But we refuse to levy any tax whatsoever on trades of stocks and commodities.  In the 1920's, there was a 0.02% tax on stock trades, but today there is none in the US.  There used to be such a tax in London, I'm having some trouble verifying that right now.  It turns out one major reason for Brexit was to dodge the proposed EU transaction tax, which would be 0.1% on stocks and bonds, and 0.01% on commodities.  If London had such a tax, and I believe they did at some time, it was somewhat smaller than that.  So you can see now why all the money people wanted to leave the EU.  I did not know this until right now.

We should tax stock trades and clothing exchanges the same, and everywhere in the country.  0.1% seems like a good rate to me.

Anyway I believe most tax revenue should come from taxes on large wealth and income flows, and not as much on sales and trading--which weigh down the economy at greater expense to the poor.  But 0.1% seems ok.

A financial transactions tax was promoted by Sanders and Warren, but is certain never to get passed and signed by the current representatives.  We could only test our democracy by replacing anyone not like Sanders and Warren, then would our representatives still follow the will of the banks?  I would hope not, not that I know for sure.  But we certainly cannot expect anything until we do replace all the representatives not like Sanders and Warren.

Thursday, May 18, 2017

The Smoldering Laptop

An anonymous federal investigator has backed up the claim that Seth Rich, the DNC staffer slain last year, had sent over 40,000 emails and 17,000 attachments to Gavin MacFadyen, an American journalist and director  of Wikileaks in London.

The DNC has never released materials to the FBI, preferring to hire a private investigator associated with the anti-Russian think tank The Atlantic Council, who claimed that they had been hacked by Russia.

Update!  This story has now been fully discredited, the most believable discrediting (not the Washington Post for sure) is

But this is not Perry Mason.  They don't talk about the laptop at all.  They talk about Wheeler's walking back his own claim.  That is what it is ALL about.

Well it's easy to see someone might be putting the finger (or $$$$) on Wheeler not to say anything more.  Discrediting the messenger does not discredit, necessarily the message.  Where Snopes says "False" the correct answer is "We Don't Know."  I'll accept that.  Wheeler is not a fully credible witness, having now reversed himself.  But that is hardly proof at all that his original remarks were fabrications, and he clearly has been someone involved in investigating the case.

Thursday, May 4, 2017

Shorter Hillary Clinton: I confess, I confess that Wikileaks did it

6 months after the election, while the Trump+GOP juggernaut is a clear and present danger and we should be watching and responding to each and every one of THEIR actions, Hillary Clinton wants to tell us she is now taking full responsibility for losing the election...she is taking full responsibility by blaming Wikileaks.

And her co-travelers on MSNBC are still echoing in every way, including editorializing by the imitable Brian Williams (who I see now was suspended a while ago for false reporting about the War On Iraq--and it looks to me  now that he shouldn't even be allowed on TV).

I'm spending a week with my sister who (gasp) loves to watch MSNBC.  On Tuesday night I was all set to declare that Rachel Maddow isn't nearly as bad as I thought.  I was listening from another room, but it seemed that it wasn't Wikigate 24/7 anymore.  Rachel was actually detailing contemporaneous actions by Trump.  I was going to post that Rachel might now be worth watching.

But no more.  After listening to the Blame Wikileaks chorus of Brian Williams et all, I've decided that I will not watch MSNBC any more ever until they can get past this.

And I've decided to start making monthly contributions to Wikileaks, who IMO has been doing a great service from it's inception, including showing how the monsterously corrupt DNC was crushing the Sanders campaign.  By the way this isn't hard to do, and you don't have to use Bitcoin or anything like that.  You can contribute to Wikileaks through sister organizations in the USA and the EU using Paypal or any credit card.