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Sol Sanders | Follow the money No. 79 -- What Obama Could Do
A version of this column is scheduled to be published Monday, August 15, 201, in The Washington Times -- Chris
Follow the money No. 79 -- What Obama Could Do
By Sol Sanders
The dust has far from settled on the Washington stalemate over setting a new debt limit. As Thomas Sowell pointed out, so logically, were an increase in the debt ceiling only “routine”, held up by pesky Congressional Tea Partiers, as the spenders charged, then what would be the purpose of having a ceiling at all? But while an indecorous debate encapsulated the larger ideological divide, America rapidly moves on, remorselessly, to threatening politico-economic issues cascading in from Europe and Asia as well as at home.
Ironically the current world crisis proved one thing: a continuing overwhelming faith in America’s importance, whether economically or culturally. Proof is “the flight to quality” by investors worldwide into the American Republic’s indebtedness as witness all-time record low interest in U.S. Treasuries auctions. Prime Minister David Cameron’s turn to American police [overcoming the usual our British Greek to your American Roman prejudices] in the face of chaotic English urban rioting is another indicator. But disquieting news from Libya approaching indecisive civil war and tragic events in Afghanistan where withdrawal leaves a highly vulnerable Pakistan indicate just how wanting is continued Obama Administration “leading from behind”.
US economic amelioration and patching up its world role would require extraordinary statesmanship. And as many observers, Pres. Harry Truman for one, have judged, the Constitution and history has made the presidency a very strong executive, and it sometimes matters less what he decides but that he act. “The buck stops here”, Mr. Truman’s pithy saying, remains a call for presidential courage on Pres. Barack Obama.
Here’s the kind of action that might result were that summons answered:
· Send Michelle and the kids off to Martha’s Vineyard while making a seminal Oval Office Labor Day speech on economic affairs. The spin might be: while holding to fundamental beliefs for a new era of economic justice, pragmatism demands that agenda be put on hold to meet the deepening emergency replaced by a program of cooperation with business to produce jobs immediately.
· Ask the Congress to skip vacation and reconvene in special session, if needs be three days a week, to consider economic-political measures necessitating legislative action, or simply as a forum to vent the public’s criticism.
· Call for a summit at the highest level with our allies in Europe and Japan on the world economy -- including the simultaneous attendance of all central bankers --to discuss coordinating economic strategies and tactics.
· Begin weekly meetings in closed session with a group of recognized private sector leaders to brainstorm recovery strategies and tactics.
· Call for an immediate minimum two-year extension of the Bush tax cuts, ask Congress immediately to cut capital gains to zero, and begin the examination of longer term tax alternatives including a flat tax.
· Propose a tax reform commission of experts modeled after the Defense Base Closure and Realignment Commission to suggest immediate incremental incentives for small businesses – the fountainhead of jobs.
· Lift all administrative restrictions on discovery and production of fossil fuels, especially in the Gulf and Alaska and Virginia, creating perhaps a quarter of a million jobs immediately.
· Use the extensive administrative powers written into Obamacare to suspend any implementation for at least five years and suggest its review by a body of medical, insurance and regulatory technocrats to be presented to the Congress before November 2012.
· Ask Congress for a one-time tax remission for multinationals to encourage repatriation of an estimated $2.5 trillion in profits held overseas, on condition 25% be invested immediately in an infrastructure fund [highways, bridges, airport, rail reconstruction, etc.], a private sector Reconstruction Finance Corporation administered by those companies in collaboration with local governments.
And then sit back and see the American economy take off!
Alas! I fear we have as much hope for such a program, either thematically or in its specifics, as the proverbial snowball in the nether regions. Hangers-on, leftwing Democrats and the kept mainstream media will continue to hope for victory in next year’s elections, clinging to an agenda designed to enthuse the President’s “politically correct” base, demonize his opponents and flimflam independents by pretending a position of compromise.
Unfortunately, it looks like that indomitable American economy with its incredible history of jobs creation will have to continue to tread water – as it will manfully -- against a Washington tide.
sws-08-12-11
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For some real waffle read this, and it comes from Merk's currency funds
http://www.merkfunds.com/merk-perspective/insights/2011-08-09-budget-bat...
I am having flashbacks….20 Years in the corporate world, of which was subject to torturous hours upon hours of meetings; pointless meetings to discuss things over-n-over and clobber a dead horse. You see Sol, talk is cheap-and you are advocating more talking in DC… Seriously?
How many effin meetings do our Politian’s need? How many hours must we discuss the same issues? What, 3 years isn’t enough, you are advocating more you say- when the 535 and their staff already know the correct course of action.
Just as in the corporate world- meetings are pointless unless at the end of that meeting resolution to issues, and calls to action, by and for every participant are clear. When exiting the meeting room there need to be goals set ….NOT a focus on when is the next meeting time and when will I see the meeting minutes!
Maybe we should address why that nonsense is allowed to continue, we have a president with no spine-an empty suit walking, and a congress that is hell bent on see him fail, a congress that could give crap with what is happening in the Heartland of America. Quite the combination I must say.
So, enough TALKING already…..THEY NEED TO GET IT DONE. If the actors on Capitol Hill had to live by the rules of the real world, they would have been terminated already. 2012 cannot come soon enough!
Lastly, let me surmise the bottom half of your writing and why it won’t work by stripping out the BS, bullet point by bullet point, which will then leave things clear as to why your assertions will not work.
Speech….. speech….. consider….. Call for… summit…. Discuss…. Begin…… brainstorm….. Call for…. Ask…. Begin…. Propose….Suggest….. suggest…. Ask…. Do you see the problem here? I hope you do, because that is why we will never get to your utopian conclusion: “And then sit back and see the American economy take off!”
gs_
Every program (stimulus 878billion for one), every policy, every platform, every law that Obama has endorsed has one common element, redistribution of money from taxpayers/debt holders to the groups he deems worthy. It is REDISTRIBUTIVE CHANGE.
Go back and look at everything he's accomplished in the past 3 years that has to do with spending, borrowing and "revenues."
It all has the common element of redistributive change at its core.
That's why he can not let go of the stupid, downright moronic call last week to continue the battle for a "balanced approach" to the budget that includes HIGHER TAXES!
There is a time to raise taxes, like Clinton did during an economic boom. But not now.
Raising taxes in this environment would smash growth and guarantee a second, and just as deep recession.
Obama has just boxed himself in. He has no way out with the economy slowing and jobs declining and sentiment falling off the cliff.
No, but he can do a lot of damage.
Take this for example, Bank of America just unloaded last week a huge pile of craptrywide mortgages to Fannie Mae. The Govt. bailed out business that is a black hole of bad loans. The plan is to turn owners into "renters" with the Govt. as landlord. Right. That will last until December 2012 after Obama loses the election. The program will come down in the dark of night. The "renter" will be forgiven his future and past payments until the former "owner"/"renter" can afford to pay.
Remember, NEVER LET A CRISIS GO TO WASTE!
Another idiot waxing faux free-marketeerism and monetarist bullshit talking points. Same shit that got us into this mess will not get us out of it.
Who is this moron? And the The Washington Times recycles this shit?
Seniors and Savers are 100% punked with Bernank's Zero Interest rates Forever on their savings. Here's peter Schiff:
"I believe that ultra-low interest rates are among the biggest impediments currently preventing genuine economic growth in the US economy. By committing to keep them near zero for the next two years, the Fed has actually lengthened the time Americans will now have to wait before a real recovery begins. Low rates are the root cause of the misallocation of resources that define the modern American economy. As a direct result, Americans borrow, consume, and speculate too much, while we save, produce, and invest too little. "
Read more: http://www.businessinsider.com/the-fix-is-in-2011-8#ixzz1UwltEU3C1. "immediate minimum two-year extension of the Bush tax cuts ... cut capital gains to zero, and begin the examination of longer term tax alternatives including a flat tax"
All well and good, if you can propose specific cuts that will reduce federal spending by at least 40%.
2. "a commission of experts ... to suggest immediate incremental incentives for small businesses"
In other words: I have no idea what to do, let's try to find somebody smarter than me.
3. "Lift all administrative restrictions on discovery and production of fossil fuels"
Fine, as long as there are reasonable checks on habitat destruction and tough financial penalties for violations and spills.
4. "suspend ... Obamacare"
Whoopee doo. It's already going down in the Supreme Court, already nearly certain to be blocked by next president.
5. "one-time tax remission ... repatriation of ... profits held overseas ... 25% be invested ... in ... a private sector Reconstruction Finance Corporation administered by those companies in collaboration with local governments"
Sure thing, buddy, and moreover we should invite the Russian oligarchs and local Russian politicians to advise on how to run this fund, since they've got so much experience with these kinds of things.
"And then sit back and see the American economy take off!"
Alas indeed.
Somehow we managed to build the Hoover Dam during GDI. We sold War Bonds during WWII. Start issuing 25 year Infrastructure Bonds..4.5% interest. Tax free for those over 65. Can be bought at any FDIC insured bank/cu. Rebuild roads, bridges, internet, electric grid, etc. Hire American workers, American companies. Get the money moving around again and payrolls up, taxes being collected. Be a great investment for pension funds. We have to start thinking out of the box. Sen. Ron Wyden and two other Senators are proposing TRIP bonds, but I think their idea might be more complicated and not accessible to the general public.
"We have to start thinking out of the box."
Or just do a modernised version of the 1930's WPA.
This stuff is only hard because the elites don't want it, and would prefer you to sit in the box that they built for you.
OK, this solution sucked. I agree with most of you the guy who posted this is out to lunch. But I do believer there is some small things we can do:
1. Flat tax, limit loopholes. Mortgage interest on mortgages over $400k are non-deductible. No second homes are deductible. Investment properties' interest are deductible.
2. I'm no fan of increasing the money supply, but the way it's being done is disastrous in a monumental fashion. Institute a different method: Let banks know they can have money at the 0% or near that level rates IF they offer loans to people who have incomes of between $50k and $200k a year. The banks can charge up to 3% over the 10 year note. Each year that the creditors have an excellent payment history AND maintain a good credit score, they have 1/4 a point removed. Each year they don't meet one of these standards, 1/4 of a point is added. It can go as low as 2% or to 1/4 above the 10 year note (whichever is lower). It can go as high as 8% or 1/4 point under the 10 year note (whichever is lower). This will spark the lending which the government is seeking, and it will accrue to the middle class in a manner which is effective and meaningful. Money can go toward home improvements, cars, mortgages. Things we desperately seek movement and activity in.
3. Eliminate the disastrous Medical Insurance Obamacare which is causing stifling problems for companies. I've spoken to many HR people - it's a disaster.
4. Eliminate all the stimulus crap that is still in effect.
5. End the wars, pull troops home now.
6. Tell other nations to foot their own defense, but set up timetables for them to do so - let them use their own military spending to "boost" their economies so we don't have to.
7. Set up a market sensitive program for shifts to alternative energy - no extra breaks or subsidies, but genuine market incentives for switching to alternatives. I have investigated alternatives for years, and very few are useful with the current breaks or subsidies. If they were market based, it's possible that productivity improvements could be made to make them useful. One of the best I've seen is a "solar rental" whereby the solar company installs panels on your home for free, in exchange for the reverse payments your system can produce during your slow electric periods. This can be done for wind, too.......and if you have battery backup in your basement (as I do) you can be prepared for blackouts or low solar/wind periods.
8. Incentivize government to be productive. Set a balanced budget for every department. If they come in under budget, while meeting their accomplishment targets, gov't employees can get some kind of bonus. Overall, the size of the government will wind up being cut.
Time is now. We can do this if we're smart. Some of my points may seem outlandish - some undoable. But I believe this can work.
you seem to be under the impression the government is working for "we the people"
you also seem to be under the impression they are open to suggestion and alternative (to the agenda) ideas
so does the knucklehead who wrote this absurd article
silly silly inspector
And I don't get how loaning more debt to consumers so they can buy more cheap Chinese made crap is going to help America build the factories and infrastructure that it needs?
Actually, I'm not under any impression. I'm well aware of what "the agenda" is. And I know who the criminals in DC are working for. I'm merely suggesting some alternatives which, assuming we CAN take back the political structure, might be implemented.
As for loaning money, consider this: it matters little where you purchase from. But that isn't the point at all. The loans themselves wouldn't be allowed for "purchases of goods", and rather for things that would be useful - mortgages, refinancings, autos (admittedly some foreign), home improvements, etc. which are currently beyond the reach of moderately frugal middle class folk like myself.
I would love to buy a new car, get a new roof, and paint my house. It desperately needs painting. But I can't take out a loan because I'd prefer to take out a low interest HELOC, which would only get me into trouble, particularly if interest rates go up again (as they will).
I'd prefer solutions which DO NOT involve government intervention. But it seems that most people are not happy with that. So, assuming that SOMETHING must be done to keep the sheeple happy, let's do it intelligently. At this point, money is injected into the system to make Goldman Sachs and a myriad of other investors even more wealthy. Let's shift that away from the investment community and toward Main Street. My method of fiat injection would benefit small to medium sized banks and middle class families. The interest rate movement would work WITH YOU if you're a good payor. If you're not - you'll get hurt (but not substantially so, as when the inflation eventually hits us where it hurts). But all in all, it's an idea which can help people rather than giving money to those who don't need it (the wealthy) or those who don't know how to use it (the perpetually poor).
I'm all for social reform and helping those without anything, but the best way to help people like that is to give the middle class a boost.
I will readily admit that Obama and his bankster friends (as well as most Republicans) don't give a damn.
Your plan won't do shit.
It's the SYSTEM which has systemic problems, and his answer is more supply side bullshit that got us here.
Glass-Steagall, not free money for rich people. We'll give them a break, not the regular people, and not change what's actually destroying us.
Glass-Steagall is the answer, not more gimmicks.
A change of the structure, not more imbalance creating bullshit like tax holliday's, or drill baby drill, etc, etc.
Then watch that money get sucked into the black hole of the ponzi which wasn't changed.
Great Plan! About as good as, 'I'll pull out'.
What Obama could have done is pass GLass-Steagall, that's what the people put him in office to do (even if they didn't specifically know it). They voted for a change away from the idiocy that preceeded him. What we got was more of the bankster same.
Impeach Obama, pass Glass-Steagall (HR 1489)
Everyone else about the subject is either a fool, acting foolish, or are downright fucktards.
Still hammering on that one note, eh? Please explain to the crowd, how separating investment and depository banking will create jobs. We'll wait.
Won't create jobs directly, but will stop these ongoing TBTF financial crises which are leading to massive misallocations of public capital. It will allow the big financial institutions to fail and for everyone else to go "so what" and get on with life.
And then our leaders can focus on the economy for once, not the damn markets.
There you go, unlimited energy:
http://www.jouleunlimited.com/
Of course, the TPTB might have something to say about folks taking the FED's printing press away ...
http://www.youtube.com/watch?v=Py8QYt54EpE
And just think of the jobs that will be created to replace all the equipment melted beyond recognition by all that E85. ;)
I don't understand the appeal of the easy answers after the failure of decades of con-mens' easy answers. Is the country -- and its analysts -- that dumb?
Here's an easy (ha ha) answer: fuel shortage! And the pathetic dribbles in Alaska and (yr kiddin') Virginia won't even begin to slake America's gargantuan appetite for crude. C'mon Whalen, get rid of the damned car and buy a bike. Work your fat, lazy banker's ass into some shape!
The system is falling apart and the pols including Obama are punting. What else are they going to do? Ask Americans to sacreefice? Har! Har! Har!
I'll believe it when I see it: Obama puts the US on an energy diet and admits the American Waste-Based economy is bankrupt ... that we will now have problems feeding ourselves ... no more 24 hour electricity and no cars.
That's where the money is going anyway. The sooner everyone faces that reality the better off everyone will be ... not having to convince anyone over here.
What is it? "Gold/silver/lead"? Do I have that right?
The US plan is to force the exterior on an energy diet first (this including the 3 billions people who have no access to modern energy sources)
In this context, one should remember that riding a bike in a polluted environment as the one generated by cars traffic is highly harmful to health.
While in a city, behaving the US citizen way, that is insulating yourself from your own and others'pollution within the comfort of a car cell is the forced choice.
People not abiding by this option damage their own health, shorten their life expectancy and give dominance to people behaving the US way.
US word order, an order of freedom and responsibility.
.
You had me at Thomas Sowell.
I agree with it all and it makes sense, which is why Obama will never do any of it. He is a marxist, not a pragmatist, and there is no way around that fact. In his mind, things are going according to plan.
.
you suck RC Whalen
why don't you do us a favor and go fuck off back to whatever hole you crawled out of.
Maybe the government should watch this for a free education in economics...
http://www.youtube.com/watch?v=cboASI3Bzfo
That is one damned good cartoon. Good find.
It all seems so complicated. Here let me simplify it for you:
http://www.youtube.com/watch?v=h6sj89xgnl4&feature=player_detailpage
unfortunately the kid said no and we had to live through a bunch of boring remakes.
That was great!
Back when the Banks only stole Billions from "We the People"!
Now Stealing Trillions is En-Vogue'!
My How the Bankers have grown!
or..
My how much the FED has printed!
Yes, but, Sol, he can't do all that while he's spending money and fighting 'wars', he just doesn't have the time and his teleprompter doesn't have the words.
DavidC
Eventually a course of action will be taken. Events are forcing a reconfiguration of the current system. At this point is seems we have an orderly or disorderly choice. We can't keep propping up the banks. That was a proven failure.
C'mon sol, how about simple solutions. Reinstate the glass steagall act. indict the criminals in Wall Street and Government. Print our own money. If you wanted to do more, get rid of HFT and look at the uptick rule. Problem solved.
@ Optimator -- Yep....now you are talking about real solutions. Not much support for those, though.
+1000. This garbage by Sol has no business being given space on zerohedge. It's disturbing. I guess this is a Fox News, Koch brothers sponsered blog. My bad.
A couple of better solutions- Single payer health care. End both wars. Bring all troops home immediately. Close all military bases in the Arab world, Europe and Asia. Reduce the military budget by $200 billion next year, then $100 billion more each year until it reaches $200 billion a year, WHICH WILL STILL LEAVE US WITH THE STRONGEST MILITARY IN THE WORLD, BY FAR.
Eliminate the Bush tax cuts for the wealthy and raise the top marginal tax rate to 50%, next year, 60% the year after that, 75% the year after that and leave it there.
Make all markets completely transparent. Make banking boring again. Go after the use of overseas tax havens with a vengeance.
There's more, but do these things and voila! Debt, deficit, social security problem solved. Disgruntled, unpatriotic, whining little rich babies will run away and be pouting in Bahrain for a couple of years until they realize that America is still the greatest country in the world and they come crawling back with their tails between their legs.
Hoo boy. Tree hugger, bleeding heart, centralized-cradle-to-grave government vipers abound here today.
As I sat drinking my $2 coffee (with free refill, and a tip) in Newport Beach this morning at the marina, acing 90% of the NYT crossword, I saw probably the largest yacht I've ever seen (huge!) leave its mooring and headed out of port. Not knowing boats, I ventured guesses in my mind what such a impressive vessel might cost? $50MM, 75MM? More? Dunno. I wondered about who owned it and how did he/she produce that sort of wealth, etc.
The next thing I noticed is there were five or six uniformed "hands" that were taking up the lines, stowing the ropes. Them plus the other crew had to number at least a dozen, maybe twenty. So, lets say twenty (really big boat, man). That crew's pay has got to be a decent (if not very decent for some). It just affirmed to me that wealth does not deprive collateral wealth, it produces it. Maybe the owner is a capital venturist, investing in other small companies that create wealth, jobs which in turn create taxable revenue.
So the social-progressive idea is to take the money that this man or woman has earned/gained (or most of it) and been paying employees and investing (wisely or otherwise) and hand it to B. Obama and the government "pot" and that will be the best way to improve everybody's situation.
Horse-Hockey.
Sol has it right here and Whalen has it right most of the time, too.
This "panacea" here by CDS would assume: That malevolent Islamism would just go away. All our allies would happily have us leave them to fend for themselves (ie Korea), B. Obama and the Government will be our Doctors, nurses and health administrators (btw, Obamacare already has a $1 trillion overrun, and it hasn't even been implemented yet) . That there would be the necessary creation of 7-10 million jobs (by who?) to ensure that our debt doesn't exceed 150% of GDP.
I don't think so.
Neither does 80% of your fellow citizens. Get a grip, my friend.
That said, I would happily agree with you that we should get rid of the Fed and orderly wind-down and restructure the TBTF's. If the latter isn't done, it will happen anyway, just a lot more messier.
What a twit. Hope you enjoyed your breakfast and the view, but methinks you are a little out to lunch. Been in LaLa Land long?
This is a weak article & the thread is picking it apart. I like Chris generally, especially his perspective on banks & RE, but offering this guy up to us is disappointing.
We need some answers, but the ones he offers are not the right ones. There are probably 10 posters in this link alone with a list of better solutions.
OR, it was Angelo Mozillos yacht, furnished by fraud and the us taxpayer bailouts. The hands you saw were not US citizens, and as you lap your coffee you are a tourist in Newport, naive of the way the world of double standards And fraud finance really works.
I got news for you, that level of wealth has absolutely zero to do with small business, no nothing, whatsoever.
Instead of a $75M boat employing a handful of serfs running around after some rich guy, that guy could use the capital to start 10 US factories and employ 2500 Americans.
But no, that would be much more hard work and risk than cruising around the bays being waited on.
And this is the problem with our wealthy so-called "job creators". It's a farce.
.
Taxes and revenues are two differrent things. Raising tax rates reduces revenues.
Carter's top rate 70% = 19% revenue from top earners.
Today top rate is 35% = 39% of revenue from top earners. Double Carter's revenues from top earners at half the tax rate.
Top rate of 100% = 0% revenue. Top rate of 0% = 0% revenue. To maximize the revenue from the top earners you have to find the poiint on the curve that matters. Taking food from babies to punish the "rich" is actually counterproductive to your revolution.
Sure, let's pretend that the distribution of income in those two scenarios is even remotely comparable...or that Hauser's law doesn't apply. LOL
That "point on the curve" is almost double what the top rate is now.
Are you talking to me?
I have no idea what you are talking about, and not very sure you do.
@ gwar5....you fail to describe what the cut-off levels for your "top" earners are. How many were top earners at 70% rate? How many more in tope earner bracket at 35%?
Here is a different perspective. Check out ratios of debt/GDP at end of Presidential terms:
Carter - 35.2% (-3%)
Reagan Term 1 - 43.8% (+11.8%), Term 2 - 53.1% (+9.3%)
Bush 1 - 66.1% (+13%)
Clinton Term 1 - 65.4% (+0.7%), Term 2 - 56.4% (-9%)
Bush 2 Term 1 - 63.5% (+7.1%), Term 2 - 84.2% (+20.7%)
http://en.wikipedia.org/wiki/National_debt_by_U.S._presidential_terms
So, I ask.....is it better to tax & spend or to borrow and spend?
Sure, let's compare Reagan's population growth piggyback to Bubba's capital gains piggyback and pretend we're exclusively discussing apples.
"Eliminate the Bush tax cuts for the wealthy and raise the top marginal tax rate to 50%, next year, 60% the year after that, 75% the year after that and leave it there."
You lost me right there. As a business owner, what is my incentive to make more money (and produce more jobs) if each dollar I make is incrementally taxed more? Why not shorten your post and just say we should adopt a socialist/communist centrally planned economy? What really gets me is that I don't even disagree with your other ideas, but have no idea how those fit in with abusive tax rates???
Abusive?? We are talkin about the tax rates during the greatest uninterrupted period of growth in American history, when business owners had plenty of incentive to make money and produce jobs and the middle class grew and the American dream of moving your family up the economic ladder was still a possibility! This is the greatest nation in the world, and we get to live and work here. There's your incentive. You don't want to give anything back? Fine. Move to Greece or Syria. I am so sick of people saying that the tax rates on the top 2% that were in place under Eisenhower and Kennedy and Nixon were abusive or would disincentivize small businesses. That is just unpatriotic hogwash.
You need an incentive to make more money...beyond making more money?!
Making more money necessarily produces more jobs?
If you're not interested in making more money, doesn't that leave a market for others to create more jobs?
What percentage of small business owners are in that top bracket? (hint: even clumsy use of fireworks would allow you to count it on one hand)
LOL
LOL
The guy clearly has no idea that during the time of massive US industrial and middle class growth in the 1960's and 1970's, the corporate tax rate sat at between 48% and 52%.
And as I recall, there were plenty of wealthy people willing to do the hard work to build up great companies back then.
If you or I don't want to make more money because of the higher rates then someone else will. Thats what we need anyway. Many people making decent money vs. a few making a ton of money and the rest making nothing.
Thanks for seeing thru all the meaningless crap. Also, if they don't like the tax rates they can move to China. None of these assholes are indispenbable. They can all be replaced. Just like the obnoxious, pompous assholes running the TBTF banks. Who needs them? We've already got too many chiefs & not enough indians.
Tick Rate Hits New Highs, Indicating HFT Activity
Traders Magazine Online News, August 12, 2011
James Armstrong
Bloomberg is reporting an unprecedented number of quotes in recent days, rising to new highs on Wednesday even as overall volume was down slightly, an indication of unfilled orders and the likely presence of active high frequency traders.
“The tick volume is up dramatically, when the actual volume of shares traded isn’t at the highest levels that we’ve seen,” Nagrath said. “Every time an order goes out, even though it’s canceled, for us it counts as another tick, another quote.”
Wednesday set an all-time high of 43.7 billion ticks. That was about one and a half times the number of ticks recorded during last year’s flash crash. Yesterday, data showed about 38 billion ticks, according to Bloomberg.
Click for chart <------------ Great PDF Chart of Ticks 2008 Fincial Crash / Flash Crash in 2009 / Japan Tsunami as well in this chart for comparison.
http://www.tradersmagazine.com/news/ticks-hfts-trading-volumes-108026-1.html?ET=tradersmagazine:e979:55405a:&st=email&utm_source=editorial&utm_medium=email&utm_campaign=tm_weekly_081211