Archive for the ‘Financial Reform’ Category

Bernie Sanders missed a big opportunity on Monday …

August 26, 2015

Yesterday, we posted about high frequency traders crowing about their high profits from Monday’s unprecedented stock market volatility.

Arguably, their methodology — hinging on fast data and low transactions’ costs — fanned the volatility flames.

I was surprised that Bernie Sanders didn’t seize the moment to say “I told you so” … and to pitch his Financial Transactions Tax.

Given the stock market bounces this week, I though it would be timely to reprise a post from a couple of weeks ago which has heightened relevance and timeliness …

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Shocker: I agree with Bernie Sanders’ Financial Transactions Tax … err. make that “half-agree”

Dem-Socialist candidate Bernie Sanders doesn’t serve up much that I agree with … but, there is one reheated idea that I half-support.

Sanders proposes that financial transactions be taxed … roughly 1/2% for most trades … slightly lower for for some categories of investments … say, Municipal Bonds.

Sanders would use the new tax proceeds to fund public college for low-income students.

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Let’s dissect the proposal … then, for what it’s worth, I’ll tell you where I agree and where I disagree …

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High frequency traders crow: “Best day since the 2010 Flash Crash” … say what?

August 25, 2015

Yesterday was a historically spectacular day on Wall Street … DJIA down 1,000 on the open, rebound by about 750 points, back down by 750.

Unprecedented volatility.

DJIA 08-24-15

Geez, was the world’s economic structure changing that much hour-to-hour?

Was new economic  information flowing in at warp speed?

Nope.

Sure, there was a deepening understanding that the market is over-valued and that China’s economy is in trouble.

That explains a big correction, but what about the hour to hour volatility?

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Shocker: I agree with Bernie Sanders’ Financial Transactions Tax … err. make that “half-agree”

July 22, 2015

Dem-Socialist candidate Bernie Sanders doesn’t serve up much that I agree with … but, there is one reheated idea that I half-support.

Sanders proposes that financial transactions be taxed … roughly 1/2% for most trades … slightly lower for for some categories of investments … say, Municipal Bonds.

Sanders would use the new tax proceeds to fund public college for low-income students.

image

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Let’s dissect the proposal … then, for what it’s worth, I’ll tell you where I agree and where I disagree …

(more…)

Don’t these jabronies* ever learn ?

June 28, 2010

Holder looks dumb when he has to admit that he hadn’t read the Arizonia law that he intends to challenge in court.

Napolitano looks dumber when – a day or two later – she says she’s opposed to the law but hasn’t read it either.

Pelosi says they haad to pass ObamaCare to find out what’s in it.

Now, our DC intelligentsia passes a massive Financial Regulatory law (which, incidentally, doesn’t touch Fannie or Freddie) and …

Sen. Dodd who as chairman of the Senate Banking Committee says:

“No one will know until this is actually in place how it works. But we believe we’ve done something that has been needed for a long time.” 

Source article:
http://www.washingtonpost.com/wp-dyn/content/article/2010/06/25/AR2010062500675_pf.html

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* jabronie: used to describe a person or action lacking judgment or sense.
http://www.urbandictionary.com/define.php?term=jabronies

Prying eyes: gov’t hones in on your financial transactions …

May 25, 2010

The was (and is) broadscale opposition to the Patriot Act provisions that let Feds listen in to phone chats.  But, not much whining about the Feds getting their  hands on all of our health and financial records. 

ObamaCare gives the Feds access to individual health records (though they promise they won’t do anything ontoward with them) ,,,  and the new Financial Reform ductates more detailed accounting of financial transactions.

And, oh yeah, there’ll be 15,000 more IRS agents …

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Excerpted from cnnMoney.com: Stealth IRS changes mean millions of new tax forms, May 21, 2010

The 1099 is a catch-all series of IRS documents used to report non-wage income from a variety of sources like contract work, dividends, earned interest and pension distributions.

There’s  massive expansion of requirements for businesses to file 1099 tax forms that was hidden in the 2,409-page health reform bill, but it’s just one piece of a years-long legislative stealth campaign to create ways for the federal government to track down unreported income and close the so-called “tax gap”.

The federal government loses an estimated $300 billion each year from the “tax gap” between what individuals and businesses owe and what they actually pay.

A new 1099-K aims to shine a light on a currently hard-to-track payment stream: credit cards.

Starting in 2011, financial firms that process credit or debit card payments will be required to send their clients, and the IRS, an annual form documenting the year’s transactions. It applies to all payment processors, including Paypal, Amazon.com, and others that service very small businesses.

The 1099 changes attached to the health care reform bill massively expand the requirements for filing the “1099-Misc” form, which companies use for recording payments to freelance workers and other individual service providers.

Until now, payments to corporations have been exempt from 1099 rules, as have payments for the purchase of goods.

Starting in 2012, all business payments or purchases that exceed $600 in a calendar year will need to be accompanied by a 1099 filing.

In essence, the 1099-Misc is having its role changed from a form for tracking off-payroll employment to one that must accompany virtually any sizeable business transaction.

Full article:
http://money.cnn.com/2010/05/21/smallbusiness/1099_deluge/index.htm

Senior moments: Senators say “Let’s regulate ATMs” … now, somebody tell them what they are.

May 25, 2010

Congress seems willing to regulate a lot of stuff that they don’t understand.

Hard to imagine somebody flummoxed  (<= one of my favorite words)  by ATMs has got a grasp on Credit Default Swaps … go figure.

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Excerpted from Washington Post: Aging Congress flummoxed by ATMs,  May 21, 2010

Sen. Tom Harkin (D-Iowa) has long pushed an amendment to limit those pesky and expensive transaction fees at automated teller machines, but his fellow senators didn’t go along with the idea this week.

One possible explanation: Quite a few of Harkin’s aging colleagues appear to have little or no contact with the decades-old technology of cash machines.

  • Sen. Ben Nelson (D), for example, told the Omaha World-Herald this week that he has never once used an ATM, relying on bank tellers instead.
  • Sen. Mike Johanns (R), has used his ATM card fewer than five times.
  • Sen. Charles E. Grassley (Iowa), the ranking Republican on the Finance Committee has a bank card but doesn’t use it for cash.

The remarks also appear to provide further evidence of cloistered politicians and a generation gap in the halls of an aging Congress.

The average age of members is among the highest of any Congress in the past century

  • The average age of senators is 63.1 years, which is three years higher than it was four years ago;
  • The average for the House was 57.2 years, which is up by two years.
  • The Senate’s longest-serving member, Robert C. Byrd (D-W.Va.), is 92.

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Factoids

The first ATMs appeared in the United States in 1969 … there are more than 1.7 million machines worldwide.

Over 90%  percent of consumers use an ATM … about 60 percent of consumers use their bank’s ATM up to five time a month … ,12 percent use it at least 10 times a month.

Most banks barely break even on ATM fees — free customer withdrawals are typically paid for with charges to noncustomers …  but about half the ATMs in the country are operated by independent, for profit ATM operators.

Full article:
http://www.washingtonpost.com/wp-dyn/content/article/2010/05/20/AR2010052003613.html?wpisrc=nl_tech

The Sarbox burden …

May 21, 2010

Punch line: Senators  Hutchison (R., Texas) and Landrieu (D., La.) have offered an amendment to exempt companies with less than $150 million of shares held by the public from “internal-controls” audits – the most onerous of Sarbox impositions.

Ken’s Take: I was wondering when somebody would step up and highlight that Sarbox did nothing to stop or slow the 2008 financial meltdown …

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Excerpted from WSJ: The No-Cost Stimulus, May 18, 2010

Sarbox, the Beltway’s previous attempt at financial-regulatory reform, was intended to improve the information investors receive about public companies.

The law did nothing to prevent poor disclosure at companies like Lehman Brothers but it did saddle the U.S. economy with billions in unexpected costs.

The SEC estimates that the average public company pays more than $2 million per year complying with the law’s Section 404.

The SEC admits that compliance burdens fall disproportionately on smaller companies.

These audits are piled on top of the traditional financial audit, and on top of a company’s own internal-controls review.

The result is that going public in the U.S., once the dream of entrepreneurs world-wide, has for too many company founders become something to avoid.

Full article:
http://online.wsj.com/article/SB10001424052748703315404575250693201556662.html?mod=djemEditorialPage_h