Re: Merkel Wants End To Speculators Who Bet Vs Greece

There are those who believe markets are kept liquid by speculators. I have deferred to them, with doubts, but the quantification of liquidity proved indeterminate. I have always believed we should tax short term capital gains at the full rate, but long term gains not at all, precisely to discourage excessive speculation. The Tobin tax goes further, perhaps too far. Bob Haugen has shown volatility coincident with crises. Some say that decimalisation has produced volatility, that we would be better if we only had one, not two, decimal points. Mundell argued it was currency volatility which caused the recent crises, but because he believes in a single global currency. Efficient markets do not believe speculators know anything, but that they accelerate price discovery, the same way turbulent flow accelerates chemical mixing. Lastly, we have to realise that the greatest cause of volatility is the institutional investors, pensions and universities, who are the same ones complaining the most about shorttermism. They have people who sit around full time managing money who feel they are not doing their job if they do not take advantage of every little change, precisely because they manage such large amounts that the little differences are substantial. These are the people who parcel out their money to hedge funds in hopes of greater returns. Seed venture capital for startups vanished precisely because these large funds believed the small ventures too troublesome to manage, and preferred the larger economies of short term gains.

- = - Vasos Panagiotopoulos, Columbia'81+, Reagan, Mozart, Pindus, BioStrategist

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---{Nothing herein constitutes advice. Everything fully disclaimed.}--- [Homeland Security means private firearms not lazy obstructive guards] [Urb sprawl confounds terror] [Phooey on GUI: Windows for subprime Bimbos]

Reply to
vjp2.at
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The trouble with that line is that its easy for some to produce their entire income from long term capital gain and there is no reason why they should avoid paying any income tax, particularly when they can be the highest earners.

Certainly much to far.

Trouble is that he hasnt established cause and effect. The volatility is most likely the RESULT of the crisis.

The trouble with that line is that the US system doesnt effectively have two decimal points with Wall St transactions and its got just as much volatility as other markets which do.

But cant provide any evidence to substantiate that claim, particulary with the GFC.

We do effectively have something close to that.

Nothing like the same way, actually.

Thats very arguable indeed with universitys.

Plenty of them dont.

Doesnt mean that they can pick the short term movements tho.

greater returns.

No they arent.

Nope, because liquidity dried up and few are prepared to take that sort of risk at the moment.

Reply to
Rod Speed

I have been trying for three years to find a measurable mathematical definition of liquidity. Not the ZIRP liquidity trap. Add speculation to that. That is a big part of the problem here. All I got was giggles. We are talking about vague, undefined things. I did find that the 1913 mandate for "elastic currency" comes out exactly as the Taylor rule if you take the elasticity of the Copernican quantity of money using the Kagan velocity.

- = - Vasos Panagiotopoulos, Columbia'81+, Reagan, Mozart, Pindus, BioStrategist

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---{Nothing herein constitutes advice. Everything fully disclaimed.}--- [Homeland Security means private firearms not lazy obstructive guards] [Urb sprawl confounds terror] [Phooey on GUI: Windows for subprime Bimbos]

Reply to
vjp2.at

I love terms like "price discovery". This "price discovery" can be extremely costly to the society and the economy. Such was the "price discovery" for oil in mid 2008. While the speculators (a lot of them pension funds) run the price up to $150 per barrel, it had settled down to $35 at the end of the year and it is about $80 now. Did the speculators discover anything???? I think not. Some made outrageous fortunes in the meantime.

"Price discovery" should not be allowed for essential commodities. Only those who utilize the commodity should be allow to purchase it. I really do not care about "price discovery" in stocks.

Well, I am not sure that this is the reason for the drying up of venture capital for startups. It has been drying up for sometime. Venture capital was always focused on very short term. Startups could only attract money if they were headed by CEOs with well known "previous" successes. Otherwise, a product had to be very close to the horizon to attract venture capital money. This silly policy has now dried up the R&D channel.

Reply to
ADR
*+-their entire income from long term capital gain and there is *+-no reason why they should avoid paying any income tax,

Germany and Japan had zero long term gains tax during their best years. Peter Grece got the cap gains pref cut in 1978 that gave us the VC boom of the 1980s.

*+-> amounts that the little differences are substantial.

*+-Doesnt mean that they can pick the short term movements tho.

They are all hot air. Hedge funds have monstrous survivor bias.

Unemployed boast hedge funding the way they used to boast consulting.

*+-liquidity dried up and few are prepared to take that sort of risk

A 29Jan10 VC conference recently described the years since 1999 as the "lost decade". When boomer pensions bloated, VCs would not invest less than five million dollars, while before the Microsoft IPO, they would invest a quarter million with merger exits. Then in 2007 they reversed duration preference in order to begin paying out pensions (fourthturning.com). That's why you had supposed venture funding for designer shopping funds but not for hard science.

- = - Vasos Panagiotopoulos, Columbia'81+, Reagan, Mozart, Pindus, BioStrategist

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---{Nothing herein constitutes advice. Everything fully disclaimed.}--- [Homeland Security means private firearms not lazy obstructive guards] [Urb sprawl confounds terror] [Phooey on GUI: Windows for subprime Bimbos]

Reply to
vjp2.at

snipped-for-privacy@at.BioStrategist.dot.dot.com wrote

Doesnt mean that their best years were due to that, or that its equitable either.

You dont know that that is what produced that.

Nope.

Separate matter entirely.

Separate matter entirely.

risk at the moment.

Just because someone claims something, doesnt make it gospel.

Yes, there was a hell of a lot more money around later.

Nope, because liquidity dried up and the appetite for risk in spades.

Nope.

Reply to
Rod Speed

   Some  say  that

= -

There are those who strongly belive that you Greeks are not....

Reply to
micegr

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