A General Financial Transaction Tax: A Short Cut of the Pros, the Cons and a Proposal

The idea of introducing a general financial transaction tax (FTT) has recently attracted rising attention. There are three reasons for this interest: First, the economic crisis was deepened by the instability of stock prices, exchange rates and commodity prices. This instability might be dampened by such a tax. Second, as a consequence of the crisis, the need for fiscal consolidation has tremendously increased. A FTT would provide governments with substantial revenues. Third, the dampening effects of a FTT on the real economy would be much smaller as compared to other tax measures like increasing the VAT. The paper summarises at first the six main arguments in favour and against a FTT. It then provides empirical evidence about the movements of the most important asset prices. These observations suggest that a small FTT (between 0.1 and 0.01 percent) would mitigate price volatility not only over the short run but also over the long run. At the same time, a FTT would yield substantial revenues. For Europe, revenues would amount to 1.6 percent of GDP at a tax rate of 0.05 percent (transaction volume is assumed to decline by roughly 65 percent at this rate). In the UK, tax receipts would be highest. Even if only transactions on exchanges are taxed in a first step (at a rate of 0.05 percent), a FTT would yield 3.6 percent of GDP in the UK. In Germany, FTT receipts would amount to 0.9 percent of GDP in this case. If a FTT is introduced in the UK and in Germany at the same time, neither country needs to fear a significant "emigration" of trading. This can be presumed because roughly 97 percent of all transactions on exchanges in the EU are carried out in these two countries

Infrastructure for 3D model reconstruction of marine structures

3D model reconstruction of marine structures, such as dams, oil-rigs, and sea caves, is both important and challenging. An important application includes structural inspection. Manual inspection of marine structures is tedious and even a small oversight can have severe consequences for the structure and the people around it. A robotic system that can construct 3D models of marine structures would hopefully reduce the chances of oversight, and hence improve the safety of marine environment. Due to the water currents and wakes, developing a robotic system to construct 3D models of marine structures is a challenge, as it is difficult for a robot to reach the desired scan configurations and take a scan of the environment while remaining stationary. This paper presents our preliminary work in developing a robotic and software system for construction of 3D models of marine structures. We have successfully tested our system in a sea water environment in the Singapore Straits

Financial Transaction Tax: Small is Beautiful

The case for taxing financial transactions merely to raise more revenues from the financial sector is not particularly strong. Better alternatives to tax the financial sector are likely to be available. However, a tax on financial transactions could be justified in order to limit socially undesirable transactions when more direct means of doing so are unavailable for political or practical reasons. Some financial transactions are indeed likely to do more harm than good, especially when they contribute to the systemic risk of the financial system. However, such a financial transaction tax should be very small, much smaller than the negative externalities in question, because it is a blunt instrument that also drives out socially useful transactions. There is a case for taxing over-the-counter derivative transactions at a somewhat higher rate than exchange-based derivative transactions. More targeted remedies to drive out socially undesirable transactions should be sought in parallel, which would allow, after their implementation, to reduce or even phase out financialtransaction taxes

Aggregate Trading Behaviour of Technical Models and the Yen/Dollar Exchange Rate 1976-2007

The study analyses the interaction between the trading behaviour of 1,024 moving average and momentum models and the fluctuations of the yen-dollar exchange rate. I show first that these models would have exploited exchange rate trends quite profitably between 1976 and 2007. I then show that the aggregate transactions and positions of technical models exert an excess demand pressure on currency markets since they are mostly on the same side of the market. When technical models produce trading signals almost all of them are either buying or selling, when they maintain open positions they are either long or short. A strong interaction prevails between exchange rate movements and the transactions triggered by technical models. An initial rise of the exchange rate due to news, e.g., is systematically lengthened through a sequence of technical buy signals

Fractal Profit Landscape of the Stock Market

We investigate the structure of the profit landscape obtained from the most basic, fluctuation based, trading strategy applied for the daily stock price data. The strategy is parameterized by only two variables, p and q. Stocks are sold and bought if the log return is bigger than p and less than -q, respectively. Repetition of this simple strategy for a long time gives the profit defined in the underlying two-dimensional parameter space of p and q. It is revealed that the local maxima in the profit landscape are spread in the form of a fractal structure. The fractal structure implies that successful strategies are not localized to any region of the profit landscape and are neither spaced evenly throughout the profit landscape, which makes the optimization notoriously hard and hypersensitive for partial or limited information. The concrete implication of this property is demonstrated by showing that optimization of one stock for future values or other stocks renders worse profit than a strategy that ignores fluctuations, i.e., a long-term buy-and-hold strategy.Comment: 12 pages, 4 figure

The Profitability of Technical Stock Trading has Moved from Daily to Intraday Data

This paper investigates how technical trading systems exploit the momentum and reversal effects in the S&P 500 spot and futures market. The former is exploited by trend-following models, the latter by contrarian models. In total, the performance of 2,580 widely used models is analysed. When based on daily data, the profitability of technical stock trading has steadily declined since 1960 and has become unprofitable over the 1990s. However, when based on 30-minutes data the same models produce an average gross return of 8.8 percent per year between 1983 and 2000. These results do not change substantially when trading is simulated over six subperiods. Those 25 models which performed best over the most recent subperiod produce a significantly higher gross return over the subsequent subperiod than do all models together. Over the out-of-sample period 2001-2006 the 2,580 models perform much worse than between 1983 and 2000. This result could be due to stock markets becoming more efficient or to stock price trends shifting from 30-minutes prices to prices of higher frequencies

Principles for non-ionizing radiation protection

In this statement, the International Commission on Non-Ionizing Radiation Protection (ICNIRP) presents its principles for protection against adverse health effects from exposure to non-ionizing radiation. These are based upon the principles for protection against ionizing radiation of the International Commission for Radiological Protection (ICRP) in order to come to a comprehensive and consistent system of protection throughout the entire electromagnetic spectrum. The statement further contains information about ICNIRP and the processes it uses in setting exposure guidelines

Light-emitting diodes (LEDS): Implications for safety

Since the original ICNIRP Statement was published in 2000, there have been significant improvements in the efficiency and radiance (i.e., optical radiation emission) of LEDs. The most important improvement is the development of 'white' LEDs that can be used as general lighting sources, which are more efficient than traditional lighting sources. LEDs emitting in the ultraviolet wavelength region have also become available and have made their way into consumer products. All these changes have led to a rise in concern for the safety of the optical radiation emissions from LEDs. Several in vitro and animal studies have been conducted, which indicate that blue and white LEDs can potentially cause retinal cell damage under high irradiance and lengthy exposure conditions. However, these studies cannot be directly extrapolated to normal exposure conditions for humans, and equivalent effects can also be caused by the optical radiation from other light sources under extreme exposure conditions. Acute damage to the human retina from typical exposure to blue or white LEDs has not been demonstrated. Concern for potential long-term effects, e.g. age-related macular degeneration (AMD), remains based on epidemiological studies indicating a link between high levels of exposure to sunlight and AMD. When evaluating the optical radiation safety of LEDs, it has now been established that published safety standards for lamps, not lasers, should be applied. Thus far, the only clear, acute adverse health effects from LEDs are those due to temporal light modulation (including flicker). Glare can also create visual disturbances when LED light fixtures are not properly designed. Further research is needed on potential health effects from short- and long-term exposure to new and emerging lighting technologies