As a cat owner I feel I must make a comment about eating food from the cat aisle because cat food isn’t cheap, ours is fussy and thus costs at least three quid a day in ‘special’ food which, because it isn’t human food, incurs 20% VAT
It’s cheaper to feed him precooked chicken from M&S but too much makes him sick.
Despite being a British Citizen, albeit descended from immigrants from Egypt a few thousand years ago he isn’t even covered by the NHS.
There is 61p a day in private healthcare for injections, flea and worming and 70p a day in insurance with a £250 and 20% excess when the private healthcare bill arrives for dental treatment etc, insurance which I believe attracts insurance premium tax of 12%. Treatment also incurs VAT at 20%
He’s clearly a net contributor to the economy and nothing is tax deductible. No wonder the economy is stuffed.
Anyway, as ever we know Richard Murphy is very wrong.
“He just doesn’t get that the markets in secondary investments exist so that pensions work.” Not just pensions, but any investment where there is not an agreed date of repayment.
Any investment is only made to allow surplus funds not needed for expenditure today to be used for deferred expenditure. A loan to a bank for a 5 year term obviously works; provided the bank is solvent I know I’ll get my money back in 5 years. But, to keep Spud happy, will I invest in the new share issue (so not second hand!) of XYZ PLC to provide permanent capital which, absent a winding up, is never intended to be repaid? Sure, I’ll get a basket of rights, voting on the board membership and entitlement to a dividend if (no guarantees) the directors declare one, but my capital is gone; no deferred expenditure when I may need it. Nobody would invest in any shares of any business ever on this basis without the existence of a secondary market. I may not know exactly how much I’ll be able to exchange my bundle of rights for to someone else for cash to spend, but I know I’ll be able to do it at any time. So at a stroke an investment opportunity which is uninvestable becomes investable.
This distinction between new and second hand bits of paper is utterly spurious. From the perspective of the issuing company, the shares have been issued once; who holds the piece of paper at any time is irrelevant. The name on the share register is as fungible as a £10 note is fungible.
Apart from completely missing the above, Spud also ignores the fact that when I, the original holder of shares in XYZ plc, sell my shares to Tim so that he stands in my shoes as the holder of my bundle of rights, I now have cash which I can either spend or use to buy other shares, including in new issues of whatever other companies are raising capital at the time. Does Spud really believe that the secondary market in existing shares means that new share issues can’t be satisfied because all the money required is just being exchanged on the secondary market? Apparently he does, yet clearly this isn’t the case. Any new investment opportunity which appears to offer a return commensurate with its risks will be fully subscribed. But without a secondary market it will fail.
Stupidity on this scale is truly hard to understand.
How is he going to ensure nobody buys second-hand properties? When granmama dies her house is bulldozed and a new one built?
As a cat owner I feel I must make a comment about eating food from the cat aisle because cat food isn’t cheap, ours is fussy and thus costs at least three quid a day in ‘special’ food which, because it isn’t human food, incurs 20% VAT
It’s cheaper to feed him precooked chicken from M&S but too much makes him sick.
Despite being a British Citizen, albeit descended from immigrants from Egypt a few thousand years ago he isn’t even covered by the NHS.
There is 61p a day in private healthcare for injections, flea and worming and 70p a day in insurance with a £250 and 20% excess when the private healthcare bill arrives for dental treatment etc, insurance which I believe attracts insurance premium tax of 12%. Treatment also incurs VAT at 20%
He’s clearly a net contributor to the economy and nothing is tax deductible. No wonder the economy is stuffed.
Anyway, as ever we know Richard Murphy is very wrong.
“He just doesn’t get that the markets in secondary investments exist so that pensions work.” Not just pensions, but any investment where there is not an agreed date of repayment.
Any investment is only made to allow surplus funds not needed for expenditure today to be used for deferred expenditure. A loan to a bank for a 5 year term obviously works; provided the bank is solvent I know I’ll get my money back in 5 years. But, to keep Spud happy, will I invest in the new share issue (so not second hand!) of XYZ PLC to provide permanent capital which, absent a winding up, is never intended to be repaid? Sure, I’ll get a basket of rights, voting on the board membership and entitlement to a dividend if (no guarantees) the directors declare one, but my capital is gone; no deferred expenditure when I may need it. Nobody would invest in any shares of any business ever on this basis without the existence of a secondary market. I may not know exactly how much I’ll be able to exchange my bundle of rights for to someone else for cash to spend, but I know I’ll be able to do it at any time. So at a stroke an investment opportunity which is uninvestable becomes investable.
This distinction between new and second hand bits of paper is utterly spurious. From the perspective of the issuing company, the shares have been issued once; who holds the piece of paper at any time is irrelevant. The name on the share register is as fungible as a £10 note is fungible.
Apart from completely missing the above, Spud also ignores the fact that when I, the original holder of shares in XYZ plc, sell my shares to Tim so that he stands in my shoes as the holder of my bundle of rights, I now have cash which I can either spend or use to buy other shares, including in new issues of whatever other companies are raising capital at the time. Does Spud really believe that the secondary market in existing shares means that new share issues can’t be satisfied because all the money required is just being exchanged on the secondary market? Apparently he does, yet clearly this isn’t the case. Any new investment opportunity which appears to offer a return commensurate with its risks will be fully subscribed. But without a secondary market it will fail.
Stupidity on this scale is truly hard to understand.