Who is the Man with the Name that Rhymes?If the name don't rhyme it ain't mine.

Trustbusters want to put less emphasis on market definition when assessing mergers

WHAT line of business are you in? It is hard for a lot of people to answer this question with a straight face. As tasks become more specialised and firms occupy ever-smaller market niches, job titles and business categories can sound comically obscure. It is a source of embarrassment for antitrust agencies, too. To assess whether there is a enough competition in a market, trustbusters must first decide what the market is. The results can be risible. For instance, Britain’s Office of Fair Trading (OFT) said this month that the purchase of a job-lot of theatres by the Ambassador Theatre Group did not raise competition concerns. The OFT’s definition of the relevant market in this case (the “provision of regional theatres for medium-scale national touring productions”) is unlikely to be found on anyone’s business card.

Some economists doubt whether defining a market is useful at all when judging marriages between very specialist firms. The issue has a growing saliency because America’s trustbusters are currently rewriting the guidelines for “horizontal” mergers (tie-ups between firms that offer the same sorts of products). The update is partly an exercise in good housekeeping: the current guidelines were written in 1992 and do not reflect advances in economic theory and changes to actual practice since then. It is also an opportunity for American policymakers to shift the analysis of mergers away from an obsession with “structure”—the size of the combined market share of merging firms—to focus instead on how big a constraint each firm is on the other’s pricing. ...

(author unknown)

I wrote a post a while back about How to Get Rich.  The no shortcuts version. It is posted below. I wanted to repost it because its been so popular in the archives. Plus, with the advent of some new banking laws, I wanted to update it with a quick note.

On July 1, laws for banks change so that they can not charge you overdraft fees UNLESS YOU OPT – IN. In other words, if you want your bank to give you cash at an ATM, or cover a debit charge on your debit card when there isn’t enough money in your account to cover it, you have to give the bank permission to do so. When you give that permission, you also give them permission to charge you HUGE amounts of money in the form of an Overdraft Charge. When I say HUGE, I mean HUGE. To the impact of 10s of Billions of Dollars per year in revenue for banks.

If you want to get rich, one of the first steps you need to take is NOT OPT IN. No matter how the banks package and market the benefits and wonders of overdrafts at the ATM or on your debit card, don’t fall for it !

Thats the How to get Rich lesson for the day. Dont be an overdraft sucker !

And here is a repost of my How to Get Rich post from 2008

Thats what so many want. Right ? I’m certainly not going to lie and say it is not a whole lot better having lots of money. I had a whole lot of fun and loved my life when I was eating mustard and ketchup sandwiches and sleeping on the floor of a 3 bedroom apartment that housed me and 5 buddies.

I have a whole lot more fun now. It doesn’t suck to be rich.

The question everyone wants answered, is how to get there. There are ways to get there. But there is not a template that works every time for everyone. It works sometimes. Getting there requires being ready when opportunity presents itself.

IMHO, change and uncertainty create opportunity. Times like we are facing now, with complete financial uncertainty are perfect times to start on the road to getting ahead financially.

First, here is WHAT NOT TO DO:

There are no shortcuts. NONE. With all of this craziness in the stock and financial markets, there will be scams popping up left and right. The less money you have, the more likely someone will come at you with some scheme . The schemes will guarantee returns, use multi level marketing, or be something crazy that is now “backed by the US Government”. Please ignore them. Always remember this. If a deal is a great deal, they aren’t going to share it with you.

I dont broadcast my great deals. I keep them all to myself. The 2nd thing to remember is that if the person selling the deal was so smart, they would be rich beyond rich rather than trolling the streets looking to turn you into a sucker. There are no shortcuts.

So what should you do to get rich ?

Save your money. Save as much money as you possibly can. Every penny you can. Instead of coffee, drink water. Instead of going to McDonalds, eat Mac and Cheese. Cut up your credit cards. If you use a credit card, you dont want to be rich. The first step to getting rich, requires discipline. If you really want to be rich, you need to find the discipline, can you ?

If you can, you will quickly find that the greatest rate of return you will earn is on your own personal spending. Being a smart shopper is the first step to getting rich. Yeah you have to give things up and that doesn’t work for everyone, particularly if you have a family. That is reality. But whatever you can save, save it. As much as you possibly can. Then put it in 6 month CDs in the bank.

The first step to getting rich is having cash available. You arent saving for retirement. You are saving for the moment you need cash. Buy and hold is a suckers game for you. This market is a perfect example. Right at the very moment when cash creates unbelievable opportunity, those who followed the buy and hold strategy have no cash. they cant or wont sell into markets this low, that kills the entire point of buy and hold. Those who have put their money in CDs sleep well at night and definitely have more money today than they did yesterday. And because they are smart, disciplined shoppers, their personal rate of inflation is within their means. Cash is king for those wanting to get rich

The 2nd rule for getting rich is getting smart. Investing your time in yourself and becoming knowledgeable about the business of something you really love to do

It doesn’t matter what it is. Whatever your hobbies, interests, passions are. Find the one you love the best and GET A JOB in the business that supports it.

It could be as a clerk, a salesperson, whatever you can find. You have to start learning the business somewhere.  Instead of paying to go to school somewhere, you are getting paid to learn.  It may not be the perfect job, but there is no perfect path to getting rich.

Before or after work and on weekends, every single day, read everything there is to read about the business. Go to trade shows, read the trade magazines, spend a lot of time talking to the people you do business with about their business and the people they buy from.

This is not a short term project. We aren’t talking days. We aren’t talking months. We are talking years. Lots of years and maybe decades. I didn’t say this was a get rich quick scheme. This is a get rich path

Now you wait for times of uncertainty and change in your business. The time will come. It may  come quickly, it may take years and years. But it will come. The nature of our country’s business infrastructure  is that it is destined to be boom and bust. Booms are when the smart people sell. Busts are when rich people started on their path to wealth.

You will know when that time is here for you because you will know your business inside and out. You will be ready because you will have been saving up for this moment in time

With all the change and uncertainty in the financial markets, there are people right now making more money than they ever dreamed of. They are the ones who have been living the real estate market and the financing behind it and understanding what actually what was going on. They re the one who understood the complexities of the credit markets. When everyone was following the crowd, they kept on saving their money and avoiding the temptation of groupthink.

Boom and busts happen to every industry. The question is whether you have the discipline to be ready when it happens for you ?

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Ant notes a piece up on WBUR Boston addressing theories to explain the universal human experience that time seems to pass faster as you get older. Here's the 9-minute audio (MP3). Several explanations are tried out: that brains lay down more information for novel experiences; that the "clock" for nerve impulses in aging brains runs slower; and that each interval of time represents a diminishing fraction of life as we age.

Read more of this story at Slashdot.

kdawson032717748849058323300678647644996523236115963914873140213203129260473982074830420620909675732773037404738789832297318174135160668573749840460621760243577617545409576778427664498384040164741864886208970765157393664090640609877872070234054712167562039028086586090251594147950527384502354404336995335379016499727350088057960955609908442136496400121315391837030048129912903274381625781285665535519267635306353517847433519526131695437701127112060827609411632998540617016863315191752402084683905168373406861454852511706743370112128080852281383372128853969162247530470560835562397521353412179976779432224622082778964745041359040716312440589555810111895915800573953197057896980779851837181355648489869816014012747922963731147352116602914386861176671760790519694238481308393573854613512543034418889896079061220381776438812744553506393220872550858913123237703652999926371536548477424491447602978694593234869704121144635764672962740970924827168604923308660483240423860279086230341341090817131353310007218523606313504749061496294491075901739557592793221665328233214612006000773295333140285769060085330031844330151148353585239712966707061238956016346988125940979228588158231350413336747995148702527882881900483901102509303783916663560225923283900970304901385605256382558206

Buttonwood's notebook Buttonwood

THERE are many reasons for the rise in inequality in Anglo-Saxon nations over the last 30 years. Globalisation has played its part by allowing capital, financial and human, to shift to where it is least taxed and constricted; the arrival of China and India into the global economy has put pressure on wages of unskilled workers. A move from a manufacturing-based to a service-based economy has diminished the power of labour unions, and increased the premium paid to "talent", all the way through from software designers to sports stars. (Up until 1962, British footballers were subject to a maximum wage.) The advantages of private education have given the children of wealthy parents a head start.

But I wanted to put forward an issue that has not often been mentioned; leverage. The Anglo-Saxon economies have been in the vanguard of credit growth and in the dominance of the financial sector.

Imagine that a casino gave much larger credit limits to its punters. Whereas the odds would still favour the house, you would get much bigger gains for the winners and losses for the losers. Similarly in financial markets, rapid credit growth allows more investors and bankers to roll the dice. Some will be skilful; more will be lucky and, as Nassim Taleb, points out in Fooled by Randomess, we will find it hard to tell the difference.  

But the crucial difference with a casino is that credit growth in the asset markets turns the odds in favour of the punter. The use of borrowed money to buy assets drives asset prices higher, and encourages banks to lend more money against those assets.

Furthermore, this system rewards those who have assets in the first place. The poor who have few assets don't get to take part.

What about subprime lending? Well one can see the subprime borrowers as the last ones allowed into the Ponzi scheme. The fastest growth in such lending came in 2005 and 2006; the subprime borrowers were thus the suckers lured in at the top of the market.  

All this is why controls on bank leverage are so important. It was the high level of leverage that allowed bankers to make big bets, ultimately with taxpayers' money. Control the leverage and banks will make smaller profits in the boom times, and thus pay lower bonuses. But this is a slow process. And the tricky bit, as detailed in a previous post, is how to deal with all the debt that has already occurred.    

And on that point, for those looking for an in-depth analysis on how higher government spending reduces economic growth, please see the ECB paper on the 1970-2004 period, complete with more statistical analysis than you can shake a stick at. 

UPDATE: Just to respond to the uru86 comment, you haven't got it straight; you have got it completely backwards. By controlling leverage, we prevent bubbles, huge bank profits and bonuses and thus reduce inequality. So this note is not about "retaining" inequality at all.

(author unknown)

Buttonwood's notebook Buttonwood

THERE are many reasons for the rise in inequality in Anglo-Saxon nations over the last 30 years. Globalisation has played its part by allowing capital, financial and human, to shift to where it is least taxed and constricted; the arrival of China and India into the global economy has put pressure on wages of unskilled workers. A move from a manufacturing-based to a service-based economy has diminished the power of labour unions, and increased the premium paid to "talent", all the way through from software designers to sports stars. (Up until 1962, British footballers were subject to a maximum wage.) The advantages of private education have given the children of wealthy parents a head start.

But I wanted to put forward an issue that has not often been mentioned; leverage. The Anglo-Saxon economies have been in the vanguard of credit growth and in the dominance of the financial sector.

Imagine that a casino gave much larger credit limits to its punters. Whereas the odds would still favour the house, you would get much bigger gains for the winners and losses for the losers. Similarly in financial markets, rapid credit growth allows more investors and bankers to roll the dice. Some will be skilful; more will be lucky and, as Nassim Taleb, points out in Fooled by Randomess, we will find it hard to tell the difference.  

But the crucial difference with a casino is that credit growth in the asset markets turns the odds in favour of the punter. The use of borrowed money to buy assets drives asset prices higher, and encourages banks to lend more money against those assets.

Furthermore, this system rewards those who have assets in the first place. The poor who have few assets don't get to take part.

What about subprime lending? Well one can see the subprime borrowers as the last ones allowed into the Ponzi scheme. The fastest growth in such lending came in 2005 and 2006; the subprime borrowers were thus the suckers lured in at the top of the market.  

All this is why controls on bank leverage are so important. It was the high level of leverage that allowed bankers to make big bets, ultimately with taxpayers' money. Control the leverage and banks will make smaller profits in the boom times, and thus pay lower bonuses. But this is a slow process. And the tricky bit, as detailed in a previous post, is how to deal with all the debt that has already occurred.    

And on that point, for those looking for an in-depth analysis on how higher government spending reduces economic growth, please see the ECB paper on the 1970-2004 period, complete with more statistical analysis than you can shake a stick at. 

UPDATE: Just to respond to the uru86 comment, you haven't got it straight; you have got it completely backwards. By controlling leverage, we prevent bubbles, huge bank profits and bonuses and thus reduce inequality. So this note is not about "retaining" inequality at all.

(author unknown)

January is big business for diet companies. Here's the skinny on them.

letters@smartmoney.com (Trevor Delaney,Lisa Scherzer)

click2005 notes a an article in The Register calling into question the one piece of hard evidence that has been put forward to pin the Google cyberattacks on China. It was claimed that a CRC algorithm found in the Aurora attack code was particular to Chinese-language developers. Now evidence emerges that this algorithm has been widely known for years and used in English-language books and websites. Wired has a post introducing the Pentagon's recently initiated effort to identify the "digital DNA" of hackers and/or their tools; this program is part of a wide-ranging effort by the US government to find useful means of deterring cyberattacks. This latter NY Times article notes that Google may have found the best deterrence so far — the threat to withdraw its services from the Chinese market.

Read more of this story at Slashdot.

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Power corrupts, but it corrupts only those who think they deserve it

REPORTS of politicians who have extramarital affairs while complaining about the death of family values, or who use public funding for private gain despite condemning government waste, have become so common in recent years that they hardly seem surprising anymore. Anecdotally, at least, the connection between power and hypocrisy looks obvious.

Anecdote is not science, though. And, more subtly, even if anecdote is correct, it does not answer the question of whether power tends to corrupt, as Lord Acton’s dictum has it, or whether it merely attracts the corruptible. To investigate this question Joris Lammers at Tilburg University, in the Netherlands, and Adam Galinsky at Northwestern University, in Illinois, have conducted a series of experiments which attempted to elicit states of powerfulness and powerlessness in the minds of volunteers. Having done so, as they report in Psychological Science, they tested those volunteers’ moral pliability. Lord Acton, they found, was right. ...

(author unknown)16998274945892638232

wordsbycodi:

(via evafay)

(author unknown)15766693241210949915

After nearly two years of development, we are proud to announce the release of the first alpha version of the Drupal 7.x family. This alpha includes a tremendous number of new features and new under-the-hood improvements for both users and developers.

We revamped Drupal's user interface, added key contributed modules including CCK and ImageField, introduced a new object-oriented database layer, revamped file handling capabilities, and an automated testing framework based on SimpleTest, among literally hundreds of other improvements. Drupal 7.0 alpha 1 is the collective work of over 800 core contributors.

It is important to note that this alpha version should not be used for production sites. We've resolved most errors reported so far, but there are outstanding known issues (including security issues) and most likely some problems that have not been reported as of yet. It is expected that there will be at least one more alpha version followed by a few beta versions and at least one release candidate before Drupal 7.0 is finalized. You can help us reach the final release date sooner by testing this alpha and providing feedback.

read more

webchick

A disturbing decline in global liberty prompts some hard thinking about what is needed for democracy to prevail

MORE than at any time since the cold war, liberal democracy needs defending. That warning was issued recently by Arch Puddington, a veteran American campaigner for civil and political rights around the world.

This week the reasons for his concern became clearer. Freedom House, a lobby group based in Washington, DC (where Mr Puddington is research director), found in its latest annual assessment that liberty and human rights had retreated globally for the fourth consecutive year. It said this marked the longest period of decline in freedom since the organisation began its reports nearly 40 years ago. ...

(author unknown)

Lexington's notebook Lexington

APOLOGIES for the light blogging this week. I've been writing a 3-pager on Barack Obama, as well as the usual column.

This item from AFP struck me:

More than 24 million Chinese men of marrying age could find themselves without spouses in 2020, state media reported on Monday, citing a study that blamed sex-specific abortions as a major factor.

Let's leave aside, for a moment, the ghastliness of aborting girls for being girls. What could be less conducive to peace and stability than having a large population of young men who are never going to get married and are probably sex-starved to boot?

In Collapse, Jared Diamond describes a little-known aspect of the Rwandan genocide of 1994. In areas where there were no Tutsis to kill, young Hutu men killed older Hutu men. In rural Rwanda, you cannot support a wife without land. The older men held most of the land, and so monopolised the women. So when they had the chance, the younger men killed them.

I'm not saying this will happen in China. But the country already has tens of thousands of protests every year, some of them violent. A big population of frustrated young men with little to lose spells trouble.

(author unknown)

Lexington's notebook Lexington

APOLOGIES for the light blogging this week. I've been writing a 3-pager on Barack Obama, as well as the usual column.

This item from AFP struck me:

More than 24 million Chinese men of marrying age could find themselves without spouses in 2020, state media reported on Monday, citing a study that blamed sex-specific abortions as a major factor.

Let's leave aside, for a moment, the ghastliness of aborting girls for being girls. What could be less conducive to peace and stability than having a large population of young men who are never going to get married and are probably sex-starved to boot?

In Collapse, Jared Diamond describes a little-known aspect of the Rwandan genocide of 1994. In areas where there were no Tutsis to kill, young Hutu men killed older Hutu men. In rural Rwanda, you cannot support a wife without land. The older men held most of the land, and so monopolised the women. So when they had the chance, the younger men killed them.

I'm not saying this will happen in China. But the country already has tens of thousands of protests every year, some of them violent. A big population of frustrated young men with little to lose spells trouble.

(author unknown)

An anonymous reader writes "As more and more games move away from 60fps, the myth of the human eye only being able to detect 30fps keeps popping up. What's more, most people don't seem to realize the numerous advantages of a high framerate, and there's plenty of those."

Read more of this story at Slashdot.

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The creators of a groundbreaking videogame had unlimited time and money to make a sequel. And that was the problem.Clive Thompson

Loneliness is a contagious disease

ON THE surface, Framingham, Massachusetts looks like any other American town. Unbeknown to most who pass through this serene place, however, it is a gold mine for medical research. Since 1948 three generations of residents in Framingham have participated in regular medical examinations originally intended to study the spread of heart disease. In the years since, researchers have also used Framingham to track obesity, smoking and even happiness over long periods of time. Now a new study that uses Framingham to analyse loneliness has found that it spreads very much like a communicable disease.

Feeling lonely is more than just unpleasant for those who yearn to be surrounded by warm relationships—it is a health hazard. Numerous studies show that loneliness reduces fruit-fly lifespans, increases the chances of mice developing diabetes, and causes a host of adverse effects in people, including cardiovascular disease, obesity and weakening of the immune system. Simply being surrounded by others is no cure. In people, the mere perception of being isolated is more than enough to create the bad health effects. However, in spite of its significant impact, precious little is known about how loneliness moves through communities. ...

(author unknown)

Aspiritech, a Chicago based non-profit company, has launched a program to train high-functioning autistic people as testers for software development companies. The company says autistics have a talent for spotting imperfections, and thrive on predictable, monotonous work. Aspiritech is not the first company to explore the idea of treating this handicap as a resource. Specialisterne, a Danish company founded in 2004, also trains autistics. They hire their workforce out as hourly consultants to do data entry, assembly line jobs and work that many would find tedious and repetitive.

Read more of this story at Slashdot.

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A “Sopranos” bus tour of New Jersey features sites like Holsten’s Confectionery, the Pizzaland shack and the auto-body shop run by Sal Bonpensiero.

By HARVEY ARATON

An example of socialist production principles—but not a good one

SELDOM, since the day Adolf Hitler gave the order to produce the Volkswagen, has a car been given such an explicitly ideological mission. But the vehicles that roll, occasionally, off the production line at Venirauto’s factory, west of Caracas, will free Venezuelans from the “yoke of capitalism,” declares President Hugo Chavez. The factory was opened with great fanfare by the president three years ago. It is a joint venture between Iran and Venezuela, which Mr Chavez predicts will turn his country into a car exporter. It is also intended to be an example of socialist production principles, although its workers see things a little differently.

In December they downed tools over the company’s refusal to negotiate a collective contract. Their wages, even at the grossly overvalued official exchange rate, are worth around $25 a day. They complained of poor safety conditions and exploitative work practices. Their supposedly socialist employer refuses to recognise trade unions and has ignored the labour ministry’s order to reinstate sacked union activists. ...

(author unknown)

More than a year ago I wrote a post (see below) about taxing stock transactions. I suggested 10c per share on both sides. Some of our politicians are suggesting .025pct.  There really is no reason not to do it either way. Spreads have narrowed in the past several years to pennies from nickels, dimes and quarters. So we know that the market can operate with the wider spreads.  Historically spreads are the profit margin of market makers. Well in this era, who is a bigger market maker than the US Treasury ? They are providing liquidity at every corner, so why shouldn’t they (we) get paid for it ?

Of course like any other government attempt to raise taxes, how they use the money is where they will absolutely screw it up. In this example they want to use half the money to fund a Job Creation Fund.  A government run Job Creation Fund is the ultimate Oxymoron.  Let me offer another post of mine that suggests that we open the doors to entrepreneurs and simplify and cheapen their cost to start businesses. The process of creating a company in this  country has become so burdensome at the hand of regulation, insurance, taxes and administrivia, that we are slowing the true job creation engine that this country needs right now. Instead of the Government funding jobs, if the focus is on job creation, which is what it should be today, these funds should be used to remove all friction to those who start, fund and run companies.

This is from an excerpt from a  post of mine and it is exactly what a smart politician should propose today in order to stimulate the creation of jobs in this country

How to Jumpstart the Economy – Tax Free Small Businesses

Jul 28th 2008 10:13AM

What has impacted my decision on whether or not to start a business is the amount of paperwork involved and the local, state and employer taxes involved. Its complicated and expensive to start even the smallest business in the real world. The real world of course is different than the Internet world. The state of business, and in particular, entrepreneurship in the US has devolved into two worlds, the Internet and the real world.

In the Internet world, all you have to do is setup an account with an ad network, put it on your website, generate some traffic and they send you a check. . No licenses, no tax id, no announcements in the newspaper. It took me minutes. Its exactly what millions of people do as well and its created an entire Internet economy that lives off of Google, Yahoo, MIcroSoft, AOL, Ebay and others. Its the entrepreneurs path of least resistance, which is exactly why most take this route.

Compare that with setting up a real world business. This is from the State of Texas: (Which I am proud to say makes it far easier than most states to start a business).

Step 1:Legal Structure and Registrations
Step 2:Business Tax Responsibilities
Step 3:Licenses Permits and Registrations (Note to State of TX, this link was broken, I had to find the destination page )
Step 4:Business Employer Requirements

As an entrepreneur , I can tell you that working through the requirements of these four steps is scary and intimidating. Why ? Because to merely start your business, you have to deal with lawyers and accountants, which not only costs a lot of money, but more importantly, requires you to trust those lawyers and accountants to make decisions that could have make or break consequences on your business. You may have the best idea with the ability to execute on that idea, but one little snafu by these professionals and your business is down the tubes.

Even worse, if you mess up on any of this, you could get in legal trouble. You could get sued, or find yourself in the middle of some legal nightmare.

Then of course, there is the financial reality of having to pay all of the business and employer taxes and ever increasing insurance premiums.

Which brings us back to How to Jump Start the Economy.

If you want to see an immediate re invigoration of the economy, open the door back up for individual entrepreneurs to enter the real world without fear and without an immediate financial burden that pre empts their ability to be successful.

If we really want to stimulate job creation in this country, take the same approach to small business with 25 or fewer employees that we take to Internet taxes. Outlaw them.

No taxes or license fees of any kind on small businesses with 25 or fewer employees. No employer payroll tax. No state or local taxes. No taxes on earnings. No Payroll taxes.  Nada. Use the money from the proposed taxes on the trade of public shares to fund not only this, but healthcare insurance premiums as well. The business owners and their employees will pay income taxes on their personal income , but not corporate earnings

The only taxes they would collect and remit are sales taxes and of course they would still file personal income taxes on their individual earnings.

Make this available exclusively to owner operated companies and only allow the operator to own and operate a single company (to prevent gaming the system).

The impact on the economy would be amazing and immediate. Those without jobs would be able to work for themselves. They would be able to join together and start companies. They would be able to take risks with far less capital and far less fear of failure.  Sweat Equity would be all it takes to start a business. In addition, we would see many cash only propreiters go legit.

Not only would we see hundreds of thousands of new businesses started seemingly overnight, with millions of new hires, but from those new businesses would come new ideas that hopefully would give us our next engine for economic growth that super cedes today’s ideas.

For Congress, the challenge will be to keep the process simple. A simple no cost, online registration for the businesses, with information about the who, what, where and ownership of the companies so that they can track and help fund them. Which in turn would create the information base from which to fund the state  and local revenue that would be lost. Easy  ? No. But a far greater reward in job creation and growth for the country than the Government creating Job Funds and public works efforts.

In this economy  we should open the door to our country’s Intellectual capital and the entrepreneurial energy that separates us from the rest of the world. Make it easy for entrepreneurs to do what entrepreneurs do, and great things happen. Voters and politicians alike seem to have forgotten what has made this country an economic powerhouse. We need to focus on creating a friction free environment for small businesses. That is exactly what will create jobs

 

Tax the Hell Out of Wall Street; Give it to Main Street

Sep 30th 2008 9:02AM

Tax every single share of stock that is bought and sold 10 cents per transaction. One dime. If you buy a share of stock, your brokerage pays a 10c tax. If you sell a share, your brokerage pays a 10c tax. 1 share, 100 million shares. Its 10 cents per share.

Of course the  tax will be paid for by those of us who are buying and selling stocks. So what. Here is the reality. If you are a true investor. Someone who wants to own a share of stock in a company you believe in, then its an amount that is not going to impact your investment decision making process.

If you are a professional trader or an institutional trader that trades continuously, then it may impact your decision making process, but only to the point of reducing your returns by a minimal amount. Its not going to change your inclination to trade. If you make 9.9pct instead of 10pct, you aren’t going to stop trading.

Whats the economic impact ?

If the NYSE, Nasdaq, Amex and OTC are trading 2 Billion shares a day, thats $ 200 Million Dollars PER DAY. If there are 260 trading days a year. Thats about 52 Billion dollars a year.

Thats real money.

Of course there has to be some fine print. You could reduce the tax per share for stocks under $5 dollars to 5cents. But i would leave it at 5cents even for stocks priced at pennies per share or less. This tax would act as a protection for investors and traders who get pitched unregulated penny stocks and who are more often than not the victims of rip off artists.

Take this $52 Billion Dollars and ????. I will open it to the floor for suggestions and save my conclusion for a later post.

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