Who Benefits From Market Speed Bumps? The Exchanges

<p class="story-body-text story-content" data-para-count="159" data-total-count="159">Since the election, stock prices have risen sharply on hopes that a wave of pro-growth policies under Donald J. Trump will drive up equity prices even further.</p> <p class="story-body-text story-content" data-para-count="166" data-total-count="325">But Mr. Trump’s administration will soon face a trend that threatens to move the long-term benefits found in stock markets away from investors and toward exchanges.</p> <p class="story-body-text story-content" data-para-count="166" data-total-count="325">Continue reading in The <a href="http://www.nytimes.com/2016/12/23/business/dealbook/who-benefits-from-market-speed-bumps-the-exchanges.html?_r=0">New York Times</a></p> <p class="story-body-text story-content" data-para-count="166" data-total-count="325"><em>Holly A. Bell is an associate professor at the University of Alaska in Anchorage and a consulting scholar on financial market structure and regulation. She is also the author of the thriller <a href="https://www.amazon.com/Trading-Salvos-Kate-Adams-Novel-ebook/dp/B01H0OOUE0">“Trading Salvos.”</a></em></p>

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Fiscal Policy

Why a Financial Transaction Tax Is a Bad Idea

<em>This article was originally posted on TabbForum <a href="http://tabbforum.com/opinions/associate-professor-university-of-alaska-anchorage">here</a></em> By Holly A. Bell Former Secretary of Labor Robert Reich claims financial transaction taxes are simply sales taxes on Wall Street traders and won’t harm markets or cause capital to flee. Yet studies of FTTs in other countries show they harm Main Street and distort markets. Former Secretary of Labor Robert Reich recently produced a snappy video about why financial transactions taxes (FTTs) as proposed by Bernie Sander’s on the campaign trail should be retained and turned into law. Unfortunately, his pithy presentation is wrought with inaccuracies. He begins by modifying the language of FTTs by shruggingly telling us it’s just a sales tax. We pay sales taxes on many things and it’s only “fair,” he claims, that anyone who sells a stock should pay a tax too. Yet it’s not exactly like a sales tax. For one thing, it’s not transparent. When you go

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A Conversation on Alaska’s Budget Crisis

My August Conversation with Mike Chmielewski on Alaska's Budget Crisis on Radio Free Palmer. Listen Here <a href="http://www.radiofreepalmer.org/2016/08/19/matsu-college-professor-holly-bell-talks-about-budgets-8-10-2016/">http://www.radiofreepalmer.org/2016/08/19/matsu-college-professor-holly-bell-talks-about-budgets-8-10-2016/</a>

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The Last Remaining Political Speech

In the interest of full disclosure, before I launch into my thoughts about Melania Trump’s convention speech, I think it is important to tell you whom I plan to vote for in the upcoming Presidential election. At this moment my charming and faithful dog Annabell is my top choice as a write-in candidate. Yes, I am among the disgruntled, which requires the giant assumption that I was ever gruntled. Yet, despite my lack of enthusiasm for any Presidential candidate short of the entertainment value of the large rubber boot perched atop the head of Vermin Supreme, I’m about to defend Melania’s alleged ‘plagiarized’ speech. Well, maybe not defend, but at least explain why her speech was so similar to Michelle Obama’s. The reason is actually very basic. It’s the same reason all beer is ‘refreshing’, all mattresses lead to ‘better sleep’, and hamburgers are always ‘juicy and seasoned to perfection’. Presidents are

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Denali II

Well-structured sales tax does more for Alaska than income tax

<span class="updated">As Alaska works to balance the state budget, one thing is certain: We will all have less money in our wallets. The scale of our deficit means we are likely to see both PFD reductions and new taxes. While the governor has proposed an income tax, a sales tax may a better alternative for Alaska.</span> To continue article, <a href="http://www.adn.com/article/20160401/well-structured-sales-tax-does-more-alaska-income-tax">click here</a>

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Database

The Potential Effects of Reg AT: Unintended Risks and Diminished Cooperation with Market Participants

Ill-considered regulation regarding algorithmic trading will adversely affect the ability of legitimate market participants to contribute to liquidity, price discovery, narrow spreads, and low trading costs. The CFTC shares with market participants a growing interest in algorithmic trading and its potential effects on the markets. Rather than working with market participants cooperatively, the Commission proposes a prescriptive regime applicable to virtually any firm that trades in the futures (and swaps) markets. If finalized, this proposal will establish an approach dominated by enforcement that will chill firms’ willingness to work with the Commission to address emerging problems in the area. In addition, by opening firms’ source code to unlimited inspection by the Commission and others, the proposal creates dangerous vulnerabilities for an asset of utmost importance to trading firms. <strong>To see full article click <a href="http://mercatus.org/publication/potential-effects-reg-unintended-risks-and-diminished-cooperation-market-participants">here</a></strong>

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Opinion

Occam’s razor can cut Alaska’s budget problems to the bone

<strong>My latest from Alaska Dispatch News:</strong> As our legislators gather in Juneau to consider Alaska’s budget and how to bridge the billions of dollars of shortfall between state income and spending, there are a few key points I would like them to keep in mind. I have twice listened to presentations on the various budget proposals and have each time believed that the principle of Occam’s razor was not being applied. Occam’s razor is a problem-solving principle that says when you have competing hypotheses, you should select the one with the fewest assumptions. Budgets are the state’s hypotheses of what the fiscal situation will look like over the next year and beyond. In every case, the budget proposals I have seen are based on copious assumptions about future states of numerous variables, two of which I will discuss here. When a budget proposal begins making assumptions about variables a decade or more

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Fear

Let’s Not Panic About Syrian Refugees

Much to the disappointment of many of my friends and readers, I tend to be a rational person. I don't panic at the latest media or twitter hype. As long as I'm not in danger of a head-on collision requiring immediate action, I like to think about things a bit before I draw any conclusions. The horrific terror attacks in Paris, have fueled fears about Syrian refugees entering the U.S.. I understand the immediate gut reaction, I had it too, then I started thinking about it and exploring the data. One of the keys to quelling these fears is to understand the difference between asylum seekers and refugees. The risk of radical Islamists entering Europe are high because their geographic location leads to asylum seekers, who are arriving unscreened and in large numbers. But refugees are highly screened and take years of processing before they are allowed to enter a country.

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Macroeconomics

One Reason Our National Economic Policy Stinks

<a href="http://www.professorhollybell.com/wp-content/uploads/2015/09/ID-100332225.jpg"><img class="wp-image-2757 alignleft" src="http://www.professorhollybell.com/wp-content/uploads/2015/09/ID-100332225-300x300.jpg" alt="Macroeconomics" width="276" height="276" /></a>Every year I attend a major economics conference to geek out with and learn from a significant collection of global economists. While just breathing the air at such an event can be inspiring, talking to people often leads to sheer terror about the future of our national and global economy. Last year’s event was no exception. At one of the many receptions I attended, I was nibbling hors d'oeuvres & sipping a glass of wine surrounded at the table by young professionals. About half worked for government agencies and the other half were PhD Students. One of the PhD students, we’ll call him Frank, was getting ready to graduate from a prestigious university in a few months with a degree in Macroeconomics and Econometrics and move to a job at the Federal Reserve. Frank fancied himself an expert on inflation targets and monetary

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Denali II

The Positive Side of The President’s Visit to Alaska

The President’s recent visit to Alaska was in many ways controversial, but there was one<a href="http://www.professorhollybell.com/wp-content/uploads/2015/09/IMG_4392.jpg"><img class="size-medium wp-image-2747 alignright" src="http://www.professorhollybell.com/wp-content/uploads/2015/09/IMG_4392-225x300.jpg" alt="Denali" width="225" height="300" /></a> positive aspect to it: It has inspired me to start blogging again. While I realize this excites some, frightens others, and disinterests most, there were so many things I wanted to blog about during the President’s visit, that I had to give the blog a facelift and return the hamsters to the power wheel. So where have I been and what have I been doing? Writing for money primarily, but that kind of writing doesn’t really let me fully express myself. It’s like a perpetual job interview in which you have to keep editors happy and manage your emotional outbursts. You have no idea how badly I want to overuse exclamation points!!!!!! Phew, that’s better. Since the President is gone and discussion of his trip is mostly over,

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