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
http://www.panix.com/~vjp2/vasos.htm http://www.facebook.com/vasjpan2
---{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]

wrote:

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 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.

The Tobin tax goes further, perhaps too far.

Certainly much to far.

Bob Haugen has shown volatility coincident with crises.

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

Some say that decimalisation has produced volatility, that
we would be better if we only had one, not two, decimal points.

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.

Mundell argued it was currency volatility which caused the recent crises,

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

but because he believes in a single global currency.

We do effectively have something close to that.

Efficient markets do not believe speculators know
anything, but that they accelerate price discovery, the
same way turbulent flow accelerates chemical mixing.

Nothing like the same way, actually.

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.

Thats very arguable indeed with universitys.

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,

Plenty of them dont.

precisely because they manage such large
amounts that the little differences are substantial.

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

These are the people who parcel out their money to hedge funds in hopes of greater returns.

No they arent.

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.

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

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
http://www.panix.com/~vjp2/vasos.htm http://www.facebook.com/vasjpan2
---{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]

On Mar 9, 3:19*am, wrote:

currency. *Efficient *markets do not *believe speculators know *anything, but
that they accelerate price discovery, the same way turbulent flow accelerates
chemical *mixing.

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.

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.

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.

*+-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
http://www.panix.com/~vjp2/vasos.htm http://www.facebook.com/vasjpan2
---{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]

wrote
Rod Speed wrote
wrote

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 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.

Germany and Japan had zero long term gains tax during their best years.

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

Peter Grece got the cap gains pref cut in 1978 that gave us the VC boom of the 1980s.

You dont know that that is what produced that.

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.

Thats very arguable indeed with universitys.

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,

Plenty of them dont.

precisely because they manage such large
amounts that the little differences are substantial.

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

They are all hot air.

Nope.

Hedge funds have monstrous survivor bias.

Separate matter entirely.

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

Separate matter entirely.

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.

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

A 29Jan10 VC conference recently described the years since 1999 as the "lost decade".

Just because someone claims something, doesnt make it gospel.

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.

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

Then in 2007 they reversed duration preference in
order to begin paying out pensions (fourthturning.com).

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

That's why you had supposed venture funding for
designer shopping funds but not for hard science.

Nope.

On Mar 9, 7:19*am, wrote:
* *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
* *http://www.panix.com/~vjp2/vasos.htm...k.com/vasjpan2
* ---{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]

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