Not only does the anger toward Wall Street seem palpable, but it appears to be growing every day.
That’s not to say mobs with torches will be gathering outside the gate, but there does seem to be a growing cry for justice from Main Street. In fact that feeling of “we’ve been cheated by those fat cats and we won’t take it anymore,” is very much what lies behind Congressman Peter Defazio’s new legislation, which would impose a 0.25% transaction tax on stocks, options and futures.
The proposed House of Representatives' bill-H.R. 1068: Let Wall Street Pay for Wall Street's Bailout Act of 2009 was born out of taxpayer outrage. The concept is for this new tax to be used to off-set the bailout money– in essence making Wall Street pay for its own mess.
On the surface, that seems to make sense but an article published by Traders Magazine makes the case that it will do much more harm than good. They say the bill would dramatically increase trading costs, widen bid-ask spreads, kill off high-frequency market making firms, slash volumes and move trading to overseas markets.
"It would have a really major impact for the high-frequency players," said Jeff Bell, with Wedbush Morgan Securities' clearing and technology group. "It would end that whole business."
The Fast Money traders find the idea outrageous as well. ”2% of the people on Wall Street contributed to 100% on the problem,” adds Guy Adami. “I think it’s important to remember that." In other words be careful not to punish everyone for the crimes of the few.
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Trader disclosure: On Mar. 6th, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Adami Owns (AGU), (BTU), (C), (GS), (INTC), (MSFT), (NUE); Najarian Owns (GDX); Najarian Owns (DNA) Calls; Najarian Owns (FCX) Spread; Najarian Owns (GLD) Put Spread; Najarian Owns (MS) & (MS) Calls; Najarian Owns (MSFT) & (MSFT) Calls; Najarian Owns (PNC) Put Spread; Najarian Owns (X) Call Spread; Najarian Owns (V) & (V) Calls; Najarian Owns (WFC) & (WFC) Calls; Finerman Owns (WFC) Preferred; Finerman's Firm Owns (WFC) Preferred; Finerman's Firm Owns (DNA) & (DNA) Calls; Finerman's Firm Owns (BAC) Preferred; Finerman's Firm Owns (MSFT), (PBR), (RIG), (TGT); Finerman's Firm Is Short (VNO), (BAC), (BBT), (IYR), (IJR), (IWM), (MDY), (SPY), (USO); J. Najarian Owns (AA), (FDO), (M); J. Najarian Owns (MS) & (MS) Puts; J. Najarian Owns (BAC) Preferred; J. Najarian Owns (FAS)