I have made suggestions for the reform of ISAs this week to reduce the absurd bias towards those with wealth that they enable.
In the past, I have suggested reform so that ISAs should support the green economy - which I stand by.
Now, I have learned that Jeremy Hunt is also looking at reforming ISAs. As the FT notes:
Chancellor Jeremy Hunt is planning the biggest shake-up to Individual Savings Accounts in years to persuade more people to take advantage of the tax-free vehicles and use them to back London-listed companies. UK Treasury officials have met investment industry executives in recent weeks to discuss how to simplify the current array of Isa products and remove barriers to investing in the stock market, according to people briefed on the discussions.
So, instead of wanting to end abuse or to fund the climate transition Hunt wants to pile more money into the stock market.
The messages that comes back to me, very loud and clearly from this and from the new Act requiring that 18 year olds contribute to pensions that will inevitably be saved in predominantly share based funds, are threefold.
First the stock market is terrified that the Ponzi scheme that supports share valuations might fail. Those valuations have depended fur decades on more, and regular, funding coming in than there are sales taking place. Hunt is helping extend the false impression that this market has anything like the value given to it.
Second, Hunt wants to increase inequality by extending tax reliefs for the well off.
Third, Tories are looking to line up their post-ministerial careers.
Hunt's ISA suggestions make no sense, at all. If ISAs have a role in the UK savings environment it is not the one that Hunt is planning for them.
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Hunt is wrong, but he’ll be gone.
Sorry, couldn’t resist that.
Or, more eloquently, “If you wait by the river long enough, the bodies of your enemies will float by.” Sun Tzu.
Sadly, Mr Hunt doesn’t seem to be the sharpest knife in the drawer (though I’ll give him the benefit of the doubt that he is good to his family, to children,and to animals).
Despite his personal wealth I’ll also give him the benefit of the doubt that he doesn’t understand that “investing” in stock markets doesn’t help industry but is a Ponzi scheme. I prefer to attribute it to ignorance rather than malevolence.
Why is Hunt an MP and minister? He doesn’t need the money. I expect, like so many “self made men” (there is no such thing), he thinks he has skills to share with the uninformed masses. But luck in business does not necessarily provide a good basis for government. Clearly not in Hunt’s case.
Anyway, even if he does make wholly inappropriate changes to ISAs, he won’t be around for long.
I guess the real danger is that Starmer will “triangulate”, back off from any Hunt changes only slightly, but keep most of them.
Yikes, that’s a terrifyingly thought.
“First the stock market is terrified that the Ponzi scheme that supports share valuations might fail. Those valuations have depended fur decades on more, and regular, funding coming in than there are sales taking place. Hunt is helping extend the false impression that this market has anything like the value given to it.”
You really do not understand how stock markets function, do you? A share price reflects the anticipated return on an investment in the company’s shares. And ultimately, for the market as a whole, that’s related to the yield on government paper. Because no-one would be buying shares if the yield on government paper was higher. Share market prices are certainly not governed by supply/demand of investment money. That’s a ridiculous idea. Investments are fungible. Prices are governed by the attractiveness of alternatives to buying shares.
Individual share prices change as the consensus view of the anticipated return on investment in the company changes. No other reason.
Wow. Do you realise how have naive you are?
I had to read the post by city slicker twice, to be sure I really understood. Its complete utter bo**ocks.
Richard,
You are being lectured by someone so lacking in confidence in the ability to defend an argument beyond mere gross assertion and gratuitous insult, he or she requires to hide behind a limp pseudonym; indeed ‘city slicker’ apparently derives not from the activities of financial genius; but from a 1918 silent short, ‘The City Slicker’ starring Harold Lloyd; so its slapstick, set in a rundown hotel in a town named Punkville (says it all, really).
I have no idea why you do not instantly bin this kind of trite rubbish; but, of course – its not my call!
Sometimes I like to give the idiots an outing
Mostly I don’t
I’m sorry. Was that response in english?
I’ve added the missing ‘naive’, but given how absurd your comment was (because it was total textbook bullshit), who cares?
City Slicker
Coming here peddling nothing but received wisdom that has been technically debunked many times over does not give you the right to comment on anything in particular including people’s typos which are the least of any problems discussed here.
I suggest you do a bit more critical reading about markets before you start quoting from stuff like the ‘efficient market hypothesis’ which after all and much like much of the er….’governing logic (??!!) of market operations is a hypothesis and in doing so is actually open to being challenged:
Hypothesis: A tentative explanation for an observation, phenomenon, or scientific problem that can be tested by further investigation.
Where markets have actually been successful City Slicker is presenting their hypotheses as absolute truths, and preventing further testing and investigation, particularly in academia.
Now, either go and do some reading or go back to sleep and dream like you have been.
I was in Chicago on a course at Northwestern Business school in the middle of which Black Monday happened. A long time ago I know. Being lectured by people like the Slick from the City who asserted that the market accurately prices stocks based on perfectly accurate predictions of future revenues. A number of us had a hilarious time trying to get them to explain why IBM on Monday was worth 2/3 what it was worth on Friday.
But then those of us who have seen things close up know full well that it is a cross between a Ponzi scheme and a betting shop where inside information and herd instinct rules. Of course Hyman Minsky worked that out years ago.
🙂