Econ. Professor: Average US Stock Holding Lasts Just 22 Seconds

[one...two...tree 2,762]

Buy! Sell! Repeat. Quickly.

In a thorough discussion of America's economy over the past century with TheRealNews.com, economist Michael Hudson noted that the average financial transaction in the U.S. lasts an astoundingly short 22 seconds. According to Hudson, President of The Institute for the Study of Long-Term Economic Trends and a professor of economics at the University of Missouri, the average foreign currency investment lasts just 30 seconds.

In the interview, Hudson summarizes the drastic shift in American tax policy since the early 1900s, explaining how falling tax rates for the wealthy, and on financial transactions, encouraged people to make money on Wall Street than with deals surrounding tangible goods. The computerization of financial transactions then exacerbated this trend, making it easier to buy and sell at a frantic pace.

"All of a sudden you have the economy encouraging speculation in real estate, in stocks and bonds, instead of direct investment," Hudson said.

Hudson also criticized theories that low taxes lead to economic growth, calling that "junk economics."

"Prosperity and wealth grow fastest when income tax rates are highest, and wealth slows and the economy slows when taxes are cut," Hudson said.

http://tpmlivewire.t...nds.php?ref=fpa

[^_^ 5,021]

I assume you (irrationally) have a problem with this?

[one...two...tree 2,762]

I assume you (irrationally) have a problem with this?

Wait....what?

[mawilson 2,133]

Welcome to the world of high-frequency trading.

[Obama 2012 1,714]

digging for random articles that support your tax tyranny Steven?

Lower taxes help with growth when placed in the right areas.

It's erroneous on this guys part if he doesn't think lower Capital Gains taxes are good though. They very much so are, especially in a thriving economy. You lower that tax, you're actually helping the tax coffers, which at the end of the day is what the greedy pigs in Washington care about.

[mawilson 2,133]

It's erroneous on this guys part if he doesn't think lower Capital Gains taxes are good though.

Profits on high-frequency transactions are not taxed as capital gains, they are taxed as regular income.

Lower capital gains taxes help "buy and hold" investors like Warren Buffett. They do nothing for HFT firms.

[james&olya 1,121]

digging for random articles that support your tax tyranny Steven?

Lower taxes help with growth when placed in the right areas.

It's erroneous on this guys part if he doesn't think lower Capital Gains taxes are good though. They very much so are, especially in a thriving economy. You lower that tax, you're actually helping the tax coffers, which at the end of the day is what the greedy pigs in Washington care about.

And if you repeat that often enough, all the weak-minded will come to accept it as true.

[james&olya 1,121]

Profits on high-frequency transactions are not taxed as capital gains, they are taxed as regular income.

Lower capital gains taxes help "buy and hold" investors like Warren Buffett. They do nothing for HFT firms.

Why should passive income (capital gains) have favorable status? It is a fiction advocated by those who make their incomes this way that somehow the dollars of wealth created by passive investment are somehow different than dollars of wealth made by punching a time clock. A dollar is a dollar! Yes, it is economic warfare. The aggressors are those advocating for favored tax status for themselves! Oops, this was supposed to tag with the prior post!

Edited January 5, 2011 by james&olya

[Obama 2012 1,714]

Why should passive income (capital gains) have favorable status? It is a fiction advocated by those who make their incomes this way that somehow the dollars of wealth created by passive investment are somehow different than dollars of wealth made by punching a time clock. A dollar is a dollar! Yes, it is economic warfare. The aggressors are those advocating for favored tax status for themselves! Oops, this was supposed to tag with the prior post!

Wrong.

The stock market is a gamble. Nothing more, nothing less. You take money (that you've already paid taxes on) and invest it into a company/product to help that company makes money/more products, or to help something hold a value because you think it will offer returns for you.

It gets a favorable status because ultimately you can lose. Do you get to pay negative taxes if you lose money? Of course not. So why shouldn't these tax rates be lower, why shouldn't they stay low to help keep the game going and to keep people investing.

Don't get me wrong, I think the market itself needs to have more stability than it does, but increasing tax rates on 'risk' is silly.

[^_^ 5,021]

The stock market is a gamble. Nothing more, nothing less.

Haha. Wrong.

[scandal 951]

Buy! Sell! Repeat. Quickly.

In a thorough discussion of America's economy over the past century with TheRealNews.com, economist Michael Hudson noted that the average financial transaction in the U.S. lasts an astoundingly short 22 seconds. According to Hudson, President of The Institute for the Study of Long-Term Economic Trends and a professor of economics at the University of Missouri, the average foreign currency investment lasts just 30 seconds.

So?? This is a reflection of increased high speed trading, particularly algorithmic trading, stat arbitrage trades,etc. All of which adds volume and liquidity and aids in price discovery. Which in turn leads to more competitive exchanges and marketplaces, narrower spreads, and lower broker commissions. I am failing to see a problem here.

[mawilson 2,133]

Do you get to pay negative taxes if you lose money?

Well, yes, but only a small amount (up to an annual limit of $3,000). If your

total net capital loss is more than $3,000, you can carry over the unused part

to the next year and treat it as if you incurred it in that year, but it's still

a joke. If you lost $50,000 in the stock market, it will take you 16+ years to

write off your losses that way.

[Mr. Big Dog 10,747]

It gets a favorable status because ultimately you can lose. Do you get to pay negative taxes if you lose money? Of course not.

Actually, yes. Investment losses can be taken off your taxable income - first it will reduce your tax liability on long term investment gains and if you have excess losses, you can deduct those to a certain limit from your other taxable income. If you're in the higher tax brackets, your tax breaks from losses actually exceeds your tax liability from your long term investment gains. Whatever excess losses you have (those that exceed the deduction limit) can be carried forward into the next tax year. The system is built - just like this great nation altogether - to privatize gains and socialize losses. It's how the income gap widens more rapidly which is what the entire tax code is really all about. It's been ordered, purchased and delivered that way.

Edited January 5, 2011 by Mr. Big Dog

[Mr. Big Dog 10,747]

Well, yes, but only a small amount (up to an annual limit of $3,000). If your total net capital loss is more than $3,000, you can carry over the unused part to the next year and treat it as if you incurred it in that year, but it's still a joke. If you lost $50,000 in the stock market, it will take you 16+ years to write off your losses that way.

True but if you are in the higher tax brackets, the tax benefit actually exceeds the tax liability on your long term investment gains. Why should Uncle Sam share your pain to a larger degree than he shares in your gain?

[mawilson 2,133]

Why should Uncle Sam share your pain to a larger degree than he shares in your gain?

Right now, yes. But if you want to tax capital gains as regular income, I'd expect a full deduction on losses as well.