Hi, Wasn't sure if this is the right place to post this. But something thats been concering me for a while now is the rise of hardline left wingers willing to attack the financial markets for the root cause of all evils at any opportunity. I wont go into a capitalist/socialist debate now as thats been done a million times and there is only one winner but socialism still gets the sympathy/emotional result regardless of facts. Im from the UK and its pretty shocking seeing the political landscape in America (a country i love and a shining light as an example of free markets.. historically) with this up and coming election. Hillary "wall street bashing" Clinton or Bernie "commie" Sanders on one side. And as for the right they arent much better. Here in the UK the leader of the opposition is an old marxists that wants to start "the people's QE" printing money to pay for government spending... (yes like Weimar Germany). Makes your headspin. All these scenarios spell the death for trading as we know it "if" these people were to get elected and follow through on their actions. In Europe there has been talk of a Financial Transaction Tax which would pretty much make day trading cost prohibitive (commissions would increase 10x 20x current levels) not to mention the fact markets would break down as nobody would provide any sort of liquidity whatsoever. The next financial rout in the markets it will be traders that get it in the neck. Im a professional prop trader and have been for 10 years. I know a lot of guys on this forum are pretty new to the markets. But have any other experienced guys made contingency plans for a political move like this? What are our options? Switzerland would never go for it, maybe somehow route orders through there? I really dont know. Cant just be me thats thinking about contingency plans?
Corbyn = the biggest threat to the UK since Hitler. Not joking. As the public get to "know" him, he'll most likely gain in popularity, and I wouldn't be surprised if he wins in 2020. Although, as it stands I'd bet against this happening. On the plus side (as I rationalize it in a non-expert capacity): Extreme opposition rhetoric is almost never implemented in full once in government; civil servants, particularly in the treasury will resist anything too drastic. The City of London and the financial sector--a huge contributor to GDP--are on your side. Markets in the emerging economies will become ever more viable as alternatives to the US market. A financial transaction tax in one dominion will be a catalyst to opening up opportunities in others. Spread betting and CFDs--a large industry with lobbyists--are a fall back. I know a retail trader who trades LSE stocks/options on the larger time frames and does well. If you have adequate capital, then this is viable, even with stamp duty or a FTT. A socialist can also be a pragmatist. The markets serve citizens, for example pensions, hedging for farmers/industry, etc. Pragmatically, you need speculators; making speculative trading impossible just doesn't make sense, even to a socialist.
How about the hard right willingness to harm, for example, the credit worthiness of the country to satisfy their delusional beliefs regarding deficits and debt as the root of all evil?
Yeah, it's the freezing of the budget that harms the country more, not the reckless spending. Sure, buddy.
Because credit agencies are known for being completely honest, never complicit and accurate in the risk they label securities with. Good thing, too, that the US Govt., decided to go after S&P when they downgraded the US.
ricter... the Fed prints the money... and it would have kept printing the money. the risk to the credit worthiness of the country from the Republicans was the risk that the "crisis" would see the Fed to continue to supply the country with money and then the people would have realized the Fed Reserve is in charge of the dollar not the Govt. Then people may have realized that the US dollar is actually a Federal Reserve note and the Federal Reserve system has private shareholders... not the Federal Govt. The risk was the entire sham would have tumbled down.... there was almost zero risk that the Federal Reserve would have made sure that interest was paid.
All good points, but rather than arguing who would have handled this mess better the fact is socialism would destroy this industry. What can we anticipate and be prepared for should the worst happen. One things for sure "banker taxes" and trading taxes will drive the industry abroad. Wonder who will pick up the slack and be the next Uk and America? Needs to be a Euro time zone to capture US and Asia sessions. But EU countries are already pretty much socialist. Dubai maybe?