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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: bentway who wrote (128833)	6/14/2008 2:59:54 PM
From: RockyBalboa	Read Replies (1) \| Respond to of 306849

After some rethinking, some more comments: Abolishing the trade? That would quickly move trading to exchanges abroad; to London, to the Eurex or even further to the Russia if the Micex expands it´s commodity segment. But it would fit nicely to the ongoing destruction of corporate America. Jobs in the area of commodity traders and operators would be loat and created elsewhere. But if one is so inclined to demote NYC as the financial capital of the world, please go ahead. A turnover tax? When I started trading stocks in London I was appalled by the existence of a stamp duty; a steep 0.5% on ALL purchases of common stock! That ate mightily into results particularly when one traded a lot. No problem; says the broker we have a way to circumvent the tax (for a small fee), use a CFD and all is fine. A CFD is no stock... In general, "regulation" is quickly due to arbitrage so business moves to less regulated areas: The senators don´t need to look further than Europe: Basle II, a generally sound regulatory framework for loans provided to nonbanks should lead to less risky balance sheets and a better alignment of spreads to credit risk. But it does not: In reality, it meant to move the more risky (read: expensive in terms of equity) loan business "offshore" and it backfired: Bank funds an overcollateralised rated offshore SPV which then grants loans under even more lenient terms than the financing bank at home could do. At home, no one cared because its still an AAA rated SPV. Be aware that those chickens still need to come home to roost!