irishtimes.com/newspaper/finance/2008/0729/1217279096198.html
More legal cannies come to light
Its becoming increasingly clear that a huge amount of people have been swimming naked.
And the banks are the ones who will ultimately carry the can.
Nope, the losses will be socialised, through loss of savings, higher taxation and inflation.
“Judge Concerned Many Legal Professionals Are Shysters”
loss of savings? 
I can understand the other two, how exactly will savings be socialised?
DIRT - The Lord giveth, the Lord taketh away
I’m not keen on DIRT as a rule. I discourages people from saving. Which I think is A Bad Thing™. I’d be keen on encouraging people to save their pennies so that when a rainy day comes along they aren’t immediately in trouble.
But I’m open to argument on that if anybody has a compelling counter-argument?
I’m sure once 100% mortgages came along the mindset of people actually having to save became redundant. 
I do agree though… taxing those who are being sensible in saving seems to be counter productive. This should be encouraged but instead savers are just seen as another honey pot for the taxman.
I agree up to a point. Like everything there needs to be a limit. Too much money sitting around is a bad thing too, people need to be encouraged to invest it in something useful whether that is shares, indigenous companies, education, etc.
I could certainly agree with that Jake. But I am thinking primarily of the smaller saver here. I think it encourages self-sufficiency which is A Good Thing™. I think it’d be great if you had a lot of smaller savers who were encouraged to save in their local CU because they weren’t getting caught for DIRT. It’d be good for them and it’d be good for their community.
Aside from an IPO or a right’s issue, there is nothing useful about investing in shares. You are gambling on the future ability of the company to be profitable, taking the chance that you have looked into the future more accurately than the person selling the shares to you. This is not productive use of capital.
*ducks behind parapet…
Ignoring my troll detector for a minute … 
Someone is selling shares either because they have something else to do with the money (other investment or consumption - possibly even just rebalancing their exposure), or because they think the shares are overvalued.
What is productive use of capital then?
Starting a company? (do you think you know more about that sector / market than everyone else?).
Buying property? (do you know more about that area / the economy than everyone else?)
Buying commodities? (do you know more about global supply/demand than everyone else?)
The DIRT collected on sensible and cautious people’s savings is used to pay the mortgage interest relief and tax relief at source of those who threw caution to the wind and bought houses they couldn’t afford. Seems perfectly fair to me.
This is a really good question!
The answer to the last two of your questions is no.
Investing in companies, either through IPO, or a rights issue to allow a company to expand are productive uses. Unfortunately, companies then go about goosing their share-price (executive pay) by over-paying their dividend. But this is not so bad. What is bad is the idea that google shares can exchange hands for 40+ times earnings on the basis of future growth. This is pipe-dream speculation of the highest order.
Infrastructure - this should be productive. It amazes me that we don’t see fixed coupon infrastructure bonds issued by the government or some of the semi-states (Bored Gosh, the ESB, Bored na Moana etc.) that are open to smaller investors. Likewise toll roads, broadband infrastrucure, schools, universities, hospitals, nursing homes. All could be built using private capital, by private companies, with a fixed rate of return. Pay by use would then pay the coupon and the principle. Is it really that hard to do?
And yes, funding start-ups, either on a small or large scale. The banks and state agencies aren’t really interested in very small companies. Given micro-funding models like Grameen bank in Bangladesh, it should be possible for individuals to fund local business on a small scale level. As an individual it is made difficult to charge interest on a loan. Why is this?
Yes, but someone is buying those shares, so the net free capital available for useful investment is zero!
Not quite true - the original person invested their money on the assumption of the liquidity offered by the stock market. If that liquidity wasn’t there, the original investment would have been less likely or at a higher price.
? 
What’s so confusing?
The money raised by a company (at IPO or an additional rights issue) is dependent on the share buyers assumption that they can get out any time they like via the stock market. As such, the initial act (which you recognise as the ‘investment’) only happens because of the clear and easy possibility of the later act (the transfer of the share to another investor).
In fact, you can take it further, and say that an angel investor only invests in a company if he thinks a large VC will buy him out, or the company can be IPO’ed or sold. Almost all investments are made with the assumption that they can be sold on.
If the investor had to hold their investment for a long time, or if there was high transaction costs involved, they would be much less likely to make that initial investment.
Gotcha.
I think what irritates me and what seems to me to be unproductive is the speculative aspect post the IPO. Perhaps it would be better if the shares were more illiquid to inhibit productive use of capitalism? (Everything else has been turned into socialism in the US so why shouldn’t this be?!).
you’re takin the michael right?
If I have something to sell
and I find a buyer
I should be able to sell ?
n’est pas?