He sets up a number of straw men which completely miss the POINT of the financial transactions tax. >In very brief form, it wasn’t high speed trading, nor any

He sets up a number of straw men which completely miss the POINT of the financial transactions tax. >In very brief form, it wasn’t high speed trading, nor any of >the markets where that occurs, which led to the crash. In very brief form, the financial transactions tax is NOT about preventing another crash (other regulations are needed for this). It's about preventing HFT operators from effectively levying a tax on the rest of the participants in the equities market (e.g. pensions and value investors). >Reducing speculation increases price volatility Absurd. In fact, high levels of capital flows correlate with financial crises (i.e. they're a cause of volatility): http://www.crei.cat/people/broner/BDES%20pub.pdf http://www.crei.cat/people/broner/BDES%20pub.pdf This can be seen in HFT by looking at the flash crash. Volatility gone nuts. Did that ever happen before HFT? >the tax itself will not in fact raise any net revenues Again it's NOT THE POINT of the tax to raise revenues, it's to discourage HFT: http://www.nakedcapitalism.com/2013/11/robin-hood-tax-how-reformers-sabotage-themselves-with-terrible-branding.html http://www.nakedcapitalism.com/2013/11/robin-hood-tax-how-re... >and yet will have a cost to both the workers in the form of lower wages and pensioners in lower pensions. Not only false, the opposite is true. The profits that HFT firms make have to come from SOMEwhere, correct? Well, they come from you. Specifically, large investors (pension funds), insurance companies, value investors, etc. Other participants in the market. HFT takes money directly from pension funds who are executing large orders, by 'skimming' off the orders they make. Their profits are not made out of thin air. >So an FTT would indeed drive up costs for individual investors making the >critics correct on this very point then? Nope. FTT is infinitesimally tiny % of a transaction. Unless you're executing millions upon millions of transactions a day that's an infinitesimally tiny amount. In which case you're NOT an individual investor, you're doing HFT... the exact kind of behavior this tax is intended to cut down on. >Sigh. The argument is now that it’s not going to cost people very much >because we’ve decided not to count that cost which is going to be the >largest for people. Firstly, HFT WITHDRAWS liquidity precisely when it is needed the most. Most algos will freeze up during times of market distress. So yeah, they're not helping when the markets are ACTUALLY suffering from a lack of liquidity. Secondly, they're adding trading volume, not liquidity. It was never hard to actually sell or buy a stock before HFT. They're not cutting down on spreads (that's what market makers do - and HFT is NOT market making). When the markets are operating normally, they're already very, very, very liquid (as was the case before HFT). HFT makes little to no difference. HFT is basically legalized front running. It should be banned somehow because it is parasitic on the other participants in the equities market. The financial transactions would cut down on that, but don't expect them to give up without a fight (as this guy is witness to).