Click amount to donate direct to CounterPunch
  • $25
  • $50
  • $100
  • $500
  • $other
  • use PayPal
Support Our Annual Fund Drive! CounterPunch is entirely supported by our readers. Your donations pay for our small staff, tiny office, writers, designers, techies, bandwidth and servers. We don’t owe anything to advertisers, foundations, one-percenters or political parties. You are our only safety net. Please make a tax-deductible donation today.
FacebookTwitterGoogle+RedditEmail

Nurses vs. High-Speed Traders

by SARAH ANDERSON

Of all the street actions leading up to the NATO summit, the one that might seem most perplexing is a nurses’ rally for a tax on securities trades. Financial markets are pretty remote from hospital bedsides, you might think.

Why would nurses get mixed up in an issue like that?

RoseAnn DeMoro, executive director of National Nurses United, says there’s a simple explanation: “The big banks, investment firms and other financial institutions, which ruined the economy with trillion-dollar trades on people’s homes and pensions and similar reckless gambling, should pay for the recovery.”

Nurses have been on the front lines of the crisis, seeing firsthand the health impacts of skyrocketing poverty and record high rates of uninsured Americans.

Their specific tax proposal: a small fee on each trade of stocks, derivatives and other financial instruments. Even at a rate of 0.5 percent or less, such taxes could generate massive revenues to pay for things ordinary people in Chicago and elsewhere urgently need, such as affordable health care and decent schools.

Endorsers of their Friday rally in Daley Center Plaza include 100 union, environmental, and global health groups.

What these groups see as a practical way to meet society’s basic needs is unlikely to be embraced by Chicago’s trading industry, however. The city has become a Mecca for “high-frequency traders.”

These firms’ computers make thousands of trades per second to exploit fleeting stock price discrepancies.

Because what the nurses are calling a “Robin Hood tax” would apply to each trade, high-frequency traders would be hardest hit. For long-term investors, the cost would be negligible.

One firm with a lot to lose is Citadel. The hedge fund has claimed to account for as much as 10 percent of global equities trading in a single day. Their annual profits from speed strategies have been as much as $1 billion.

Dozens of small high-frequency trading houses have also popped up around the Chicago Mercantile Exchange. Thirty of 35 members of the industry’s national lobby, the Principal Traders Group, are based in the Chicago area.

An example is Infinium Capital, a firm notorious for rocking world oil prices by sending thousands of erroneous buy orders to oil markets in a few seconds. It was fined $850,000.

Like many in its industry, Infinium can run circles around ordinary investors because its computers are located next to exchange servers. Those on the same floor as the Merc’s servers can transmit up to 5,000 orders per second with less than 10 milliseconds of lag time.

As support for the Robin Hood tax gains momentum, lobbyists for the trading houses will surely turn their sights on it. The Financial Services Forum has already urged the Obama administration to block such taxes, not just in the United States, but also in Europe.

One of the speed traders’ arguments is that such taxes would make it hard for them to provide the liquidity that oils our nation’s financial machine. But many traditional investors point out that during crises, speed traders drain liquidity just when it’s needed most.

They’re also concerned that the lightning-speed computers could go haywire and trigger another crash.

Nurses vs. high-speed traders. Now there’s a match-up you probably never thought you’d see playing out in the streets of Chicago.

Sarah Anderson directs the Global Economy Project of the Institute for Policy Studies.

This column is distributed by OtherWords.


Sarah Anderson directs the Global Economy Project at the Institute for Policy Studies.

More articles by:

2016 Fund Drive
Smart. Fierce. Uncompromised. Support CounterPunch Now!

  • cp-store
  • donate paypal

CounterPunch Magazine

minimag-edit

Weekend Edition
September 30, 2016
Friday - Sunday
Henry Giroux
Thinking Dangerously in the Age of Normalized Ignorance
Stanley L. Cohen
Israel and Academic Freedom: a Closed Book
Paul Craig Roberts – Michael Hudson
Can Russia Learn From Brazil’s Fate? 
Andrew Levine
A Putrid Election: the Horserace as Farce
Mike Whitney
The Biggest Heist in Human History
Jeffrey St. Clair
Roaming Charges: the Sick Blue Line
Rob Urie
The Twilight of the Leisure Class
Vijay Prashad
In a Hall of Mirrors: Fear and Dislike at the Polls
Alexander Cockburn
The Man Who Built Clinton World
John Wight
Who Will Save Us From America?
Pepe Escobar
Afghanistan; It’s the Heroin, Stupid
W. T. Whitney
When Women’s Lives Don’t Matter
Julian Vigo
“Ooops, I Did It Again”: How the BBC Funnels Stories for Financial Gain
Howard Lisnoff
What was Missing From The Nation’s Interview with Bernie Sanders
Jeremy Brecher
Dakota Access Pipeline and the Future of American Labor
Binoy Kampmark
Pictures Left Incomplete: MH17 and the Joint Investigation Team
Andrew Kahn
Nader Gave Us Bush? Hillary Could Give Us Trump
Steve Horn
Obama Weakens Endangered Species Act
Dave Lindorff
US Propaganda Campaign to Demonize Russia in Full Gear over One-Sided Dutch/Aussie Report on Flight 17 Downing
John W. Whitehead
Uncomfortable Truths You Won’t Hear From the Presidential Candidates
Ramzy Baroud
Shimon Peres: Israel’s Nuclear Man
Brandon Jordan
The Battle for Mercosur
Murray Dobbin
A Globalization Wake-Up Call
Jesse Ventura
Corrupted Science: the DEA and Marijuana
Richard W. Behan
Installing a President by Force: Hillary Clinton and Our Moribund Democracy
Andrew Stewart
The Democratic Plot to Privatize Social Security
Daniel Borgstrom
On the Streets of Oakland, Expressing Solidarity with Charlotte
Marjorie Cohn
President Obama: ‘Patron’ of the Israeli Occupation
Norman Pollack
The “Self-Hating” Jew: A Critique
David Rosen
The Living Body & the Ecological Crisis
Joseph Natoli
Thoughtcrimes and Stupidspeak: Our Assault Against Words
Ron Jacobs
A Cycle of Death Underscored by Greed and a Lust for Power
Uri Avnery
Abu Mazen’s Balance Sheet
Kim Nicolini
Long Drive Home
Louisa Willcox
Tribes Make History with Signing of Grizzly Bear Treaty
Art Martin
The Matrix Around the Next Bend: Facebook, Augmented Reality and the Podification of the Populace
Andre Vltchek
Failures of the Western Left
Ishmael Reed
Millennialism or Extinctionism?
Frances Madeson
Why It’s Time to Create a Cabinet-Level Dept. of Native Affairs
Laura Finley
Presidential Debate Recommendations
José Negroni
Mass Firings on Broadway Lead Singers to Push Back
Leticia Cortez
Entering the Historical Dissonance Surrounding Desafinados
Robert J. Burrowes
Gandhi: ‘My Life is My Message’
Charles R. Larson
Queen Lear? Deborah Levy’s “Hot Milk”
David Yearsley
Bring on the Nibelungen: If Wagner Scored the Debates
FacebookTwitterGoogle+RedditEmail
[i]
[i]
[i]
[i]