By creating a tax wedge between the bid and ask priceoffinancialassets, the APT tax provides incentives to lengthen the average holding period offinancial instruments.
Or, at a time of economic stagnation in much ofthe rich West, you might ask yourself why all that cheap money created by central banks seems to have pumped up thepriceoffinancialassets to a disturbing extent, while doing little to stimulate job creation.
Thefinancial institutions with assets that they could not price can now maintain that the mere existence ofthe Troubled Assets Relief Program (TARP) means that there is a potential market for the securities that they could not sell previously.