Aaaaagh!!

Sometimes Blogger does the most infuriating things to me. And there really isn't much I can do to fix it at the moment.

At the moment, I have an expandable post hack in most (but not all) of my posts which is supposed to allow readers to click on the link "There's more of this diatribe here..." which should, theoretically, allow people to expand a post if they want to read more of it. It ain't working folks. If it pops up in this post (I didn't put it there) you'll need to click on the post heading to see more of the post instead.

It is driving me nuts. Don't know when I can fix it either, 'cause our net connection at home is not happening due to us changing ISPs.

Edit 17/07/2007: Thanks to this fix at Hackosphere, all is good again. I feel better now.

Great debacles of our time: The great mezzanine financing collapse (part 3)

This is part 3

Part 1 is here.

Part 2 is here.

It is with great displeasure that I announce that Bridgecorp has gone under.

This, sadly, means that a fourth major mezzanine financier has gone to the wall, and appears to have taken with it about AUD $25 million of investors' money.

I don't really want to add much more to this. It's a sad tale, and I don't know much about Bridgecorp's circumstances. Suffice to say, there can't be much more carnage on this front.

Standard but necessary disclaimer: This is not advice. Only a complete idiot would think that any of this constituted advice. It's not even vaguely reasonable to consider this to be advice. If you are in any doubt as to the content of this, see a good, independent financial adviser immediately. They do exist.

Wikipedian protester

Thanks Kathryn for this one:



I had a giggle, anyway.

Pants!

In what is getting my vote as the silliest lawsuit ever, good sense has prevailed in the District of Columbia and a plaintiff has lost a case against a dry-cleaner.

The plaintiff in this case was no ordinary plaintiff, though. In this case, Judge Roy L Pearson, Jr attempted to extort sue the, um, pants off a humble everyday dry-cleaner over a missing pair of pants for USD 67 million.

During the case, the plaintiff was portrayed as a "bitter, insolvent man" who was solely motivated by greed. The defence clearly got that one right.

Pearson lost.

I've said on many occasions that tort law is sorely in need of reform. The one thing about torts is that it is one incredibly subjective area of the law, and the whole common law thing about it has proven to be time and time again, simply wrong.

Now, in Australia (as in most places around the world), we hear cases like this go on in US courts all the time and we say that it could only happen there.

Wrong.

Australia started getting a wave of stupid and silly lawsuits in the nineties as a result of pushy plaintiff lawyers proving that tort law is yet another weapon for greedy miscreants who just want to benefit at the expense of other people, and certainly not in a just fashion.

I once listened agog as a friend of mine with a background in litigation reeled off a string of precedents that would provide you with a fair chance to sue the roads authority for not keeping the road dry.

I've long held that some kind of legislation should be enacted explaining exactly what it is that can and can't sue someone for. And how to calculate the penalties.

In the early noughties, a wrestler at a gym in Melbourne (Foscolos v Footscray Youth Club and Parker, [2002] VSC 148) sued his trainer (and the gym) for over AUD 5.7 million and won, bankrupting the trainer. The grounds that Justice Bongiorno gave in this case were loss of future earnings.

Having a background in financial planning, I quickly did the mathematics and worked out that, based on our learned justice's calculations, every single financial planner in Australia was recommending serious under-insurance in the disability insurance area. By a factor of 75% of the kinds of figures that Bongiorno was coming up with.

That's some serious under-insurance.

Never mind what cases like this one do to legal liability insurance premiums.

Anyway, maybe now, after the Pearson case, common sense will prevail in this area of the law that has gotten completely out of hand.

And I would like to thank the judge in this case for awarding against Pearson, who must have been sniffing his undies when he dreamt up this ridiculous case.

I'd also like to call on the District Attorney for DC to prosecute Pearson for contempt of court. Clearly, this was an abuse of process and of the court itself. Especially since Pearson would have been well aware of this.

The Purple Headed Earls' Complaints Blog

The Hulk and I have now commenced operations on our new addition to the blogosphere - The Purple Headed Earls' Complaints Blog.

We aim to place our complaints up there for all to see.

At the moment, there's only one up there from me - and a response - but Hulk has some absolute ripsnorters of complaints letters ready to be uploaded. I can hardly wait to see those.

And like all blogs, you, the reader, get to whinge about each and every single complaint that we put up there for all to see. And they're all in the best possible taste.

So click here. And enjoy.

Edit 28/06/2007: Nice1bruva has joined us on the blog and has already got cracking on posting. It's all good.

Dikkii's Diatribe Archives is now retired

Apologies to all who are getting old stuff in my feed.

I've retired Dikkii's Diatribe Archives and I've moved everything here. This basically makes it easier for me to keep track of everything.

All the dates are still intact - you'll notice in my blog archive over on the right that I now have years 1997 - 1999 appearing. And for those posts that I've linked back to, I've stuck in pointers back to the new spots where I've moved them to.

If you had links to any of my old stuff, I advise you to change them. It's all good.

Speeding drivers and red lights

I was prompted to write this post by a post that my good buddy Paul wrote at his blog, Contempt.

In it, Paul bemoans the attitude of the newspapers and people in general who think that speeding fines are too high. And he's 100% spot on. This thing in the media is a bit of a blitz that comes around about once every 6 months, it appears.

Basically, the crux of the matter is that fines for speeding, running red-lights etc are seen by irresponsible media types as "revenue raising" and not the punishment that jerks who continually do this so richly deserve.

Well, I've had enough. It's about time that this cavalier disregard for human life was done away with, once and for all. In Paul's polite enough way, he makes the rather astute comment that pretty much nails this completely idiotic issue where it counts, and that is here:

"Melbourne's two newspapers waste an awful lot of newsprint complaining that speed cameras in Victoria are there for no other reason than to raise revenue. While I can't really see how this is a problem (don't want to pay? Don't speed), it intrigues me that a paper can then find issue with people losing their licences over such offences.

Sounds like the perfect solution to me, I'll be glad to see them off the road. I drive very rarely, but it still scares the heck out of me that whenever I do, someone in the oncoming traffic shoots through red lights as I'm trying to make a right-hand turn."

There's not really much I can add to Paul's comment here. Basically, there is a disconnect that our media just don't appear to want to acknowledge.

And why would they? Various hacks in the Melbourne print media have quite a reputation for being a bunch of Larry Leadfoots around town. Why print articles pointing the finger of blame where it is so sorely deserved at speeding drivers, when you can point it at the State Government and the Victoria Police for "revenue collection"? Especially when you inevitably end up losing your licence for a speeding offence and the other newspaper finds out about it. You certainly won't look like so much of a hypocrite.

Revenue collection.

This is a disgraceful red herring designed to distract attention away from the fact that speeding drivers get fined because they are engaging in life-threatening behaviour. It never ceases to amaze me how normal, ordinary, rational human beings can become fascist pigs whenever the ugly spectre of speed cameras is raised.

Speed cameras exist to protect human life. Speeding motorists should be fined back to the stone-age, and then some.

The very fact that the media complains about this issue is proof that no one takes speeding seriously enough. By trivialising this as being all about revenue raising, and not about protecting human lives, the media is basically saying that speeding drivers' hip pockets are more important than protecting the lives of pedestrians, passengers and other motorists.

And the attitude displayed by drivers who are caught speeding is nothing short of a DISGRACE!!!

Honestly, you'd think that they'd been wrongly accused of murder the way that some people carry on. Why can't people just accept that they've recklessly (sometimes willingly) engaged in life-threatening behaviour, pay their fine, accept their punishment and move on? Really, it's not hard.

But I've got an idea.

Next time the media complains, the State Government ought to raise both the fines and the demerit points. That'll learn 'em.

Rated PG

Yes folks.

My blog is rated PG. And here's why:

This rating was determined based on the presence of the following words:

• hell (5x)
• missionary (1x)

Thank you to Bob for this one. Love it.

Dikkii's financial tips #5: How the hell do cheques work?

Welcome to Dikkii's financial tips.

This is a series where I attempt to provide some sort of guidance to financial matters without breaching the Corporations Act by actually providing advice.

Anyway, I have to return to banking just one teensy weensy last time, because I did promise regular commenter Plonka a round up of cheques.

Cheques, as I responded at the time, are amazingly complex instruments. The law as it relates to cheques is remarkably finicky, and horrible. There are so many different bits to them, that I could not begin to explain - but I'll have a go. It's worth knowing.

Back in the day, they were explained to me as a three way agreement between the person signing the cheque, the person that they're giving the cheque to and the bank that the cheque is drawn on.

I prefer to think of it as an IOU.

In any event, what normally happens is this. You write out a cheque, you hand it over, and money flows from your account to the other person's.

Let's look at all the bits - and there are many.

The drawer

(Pronounced: draw-rer)

Not someone's undies, this is the name of the account from which the cheque is drawn. It's usually indicated on the cheque somewhere between the amount in words bit and the space for the signature. Usually looks like "JM BLOGGS", "MP AND LF CITIZEN", "MEGA CORPORATION LTD" or even "J AND P DOE TA SMALL BUSINESS ITF THE DOE FAMILY TRUST".

Note the shorthand - I always thought this looked unprofessional, but it appears to be commonly accepted that AND indicates a joint account or partnership, TA indicates a registered business name ("Trading As") and ITF stands for "In Trust For".

The drawee bank

(Pronounced: draw-ree)

This will be normally shown up on the top left hand corner of a cheque. Underneath that will be the drawee branch. This is the bank and branch of the drawer's account.

The payee

This is the person, persons, company or other entity to whom the cheque should be paid. It will normally have the word "pay" at the start of the line and the words "or bearer" or "or order" at the end. Sometimes it will be made out to cash, in which case, the words "please pay cash," or just plain "cash" will be written.

"Or bearer"

This means that the cheque can be accepted by anyone holding it. Under current conversion laws a bank would be pretty stupid to rely on these words, however a bit of lenience is normally given (within reason). Normally a bank will not allow third party bearers to deposit a cheque made out to someone else - it's just too risky for the bank.

I am reliably informed the stolen third party cheque lawsuit involving a certain "Mr Cash" is an urban myth.

"Or order"

The opposite of "or bearer". This means that the cheque must go into an account name that matches that whom the cheque is made out to. Crossing out the words, "or bearer" means the same thing as "or order".

For example - a cheque is made out to "Tom and Sue Jones or order" - this must go into a joint account set up in the name of Tom and Sue Jones. No exceptions.

Usually, an "or order" cheque needs to be endorsed (signed on the back) by the payee, but the bank is normally deemed to be acting in good faith if it follows the rules in the above paragraphs.

Amount in words vs amount in figures

These need to match up. If one is different to the other, the lesser figure only may be accepted. This is always fun with Generation Y who, according to stereotypical "research", are illiterate, innumerate and belligerent.

Signature

The cheque must be signed in accordance with the operation method of the drawer's bank account. If the account requires two signatures, then the cheque must have two signatures.

I used to get a good laugh when young kids would come into the bank with one of their parent's cheques made out to cash, and only one dodgy signature where two were required. Cheeky little rascals!

The crossing

This is normally two parallel lines drawn vertically or diagonally across the cheque. Occasionally you'll see the words "not negotiable" as well. They mean the same thing - the cheque must go into a bank account and cannot be cashed.

Sometimes you might see the words "account payee only" written - this has the same effect, plus it also does the job of the words"or order" - the cheque must go into a bank account in the name of the payee specifically and it cannot be cashed.

Crossings may be pre-printed on a cheque which can cause great confusion - attempting to cash a cheque made out to "cash" with a crossing is nigh on impossible.

---

So what happens when a cheque is deposited, and why does it take so long?

Let's follow one along the trail.

1. Day one.

A cheque is deposited into a bank account. Normally, a cheque debit is processed off-site, usually overnight. The only thing that may (but not always) happen immediately is that an amount is credited to your bank account. If this deposit credit is processed off-site with the cheque, it will also be processed overnight.

Any amounts credited to the payee's bank account during the day on day 1 will be subject to clearance - that is, they will actually be in their bank account that day, however, a hold is placed on those funds so that you can't touch them. Normally for three working days.

And even though some bank branches are open on weekends, now, this does not include those days.

2. Day two

Transactions processed off-site go through some batch reconciliation process which means that you won't notice the deposit in your bank account until the next day.

What will also be noticed the next day, is that the drawer's bank account will also have been debited.

But if you check both accounts, you'll see that they're showing transaction dates of day 1.

So why does clearance still apply?

Well, imagine that the drawer has overdrawn his account. Debits have to fund a credit, and the credit (the deposit) must be processed. Therefore, so too does the debit (the cheque).

The overdrawing will show up on a report which the drawee branch manager gets the next day (day 2) first thing. The manager has two options - allow the overdrawing, or dishonour the cheque.

If the manager dishonours the cheque, she will create a credit dishonouring the cheque and crediting the funds back to the drawer's account. The debit that funds this credit must be made to the payee's bank account. Both sides of this transaction will be processed off-site and will go through the same overnight batch reconciliation process I alluded to above.

Needless to say, the dishonour will not show up in the depositor's account until day 3.

3. Day three

Both sides of the dishonour will have the same date as day 2, but they normally will process overnight.

This means that when the payee checks their account that morning (day 3), the funds that were subject to clearance will have gone from their account.

If the cheque is not dishonoured, the funds will still be subject to clearance that day, though, because it won't be until this time that the cheque will have had a chance to physically make it back to the drawee bank for perusal.

Not all cheques get looked at by the drawee bank, but some do. Any irregularities such as funny signatures, third party cheques etc will have one more window for dishonour. This will happen overnight. So will the lifting of the hold on any uncleared funds that haven't been dishonoured.

4. Day four

Normally, this will be when the payee is finally able to access their funds, assuming that the cheque has been honoured.

With Credit Unions and Building Societies, a couple of extra days may be allowed. Their paper trail is somewhat more convoluted than banks.

---

So, if you've read this far, you're probably about to ask, "What about pay cheques? My bank let's me draw against them straight away."

Firstly, banks are under no obligation to do this - this may be done as a favour. Nothing more. No magical solution gets around the paper trail that must be followed above.

Secondly, history shows that employers who aren't organised enough to do their payroll properly are most likely to be ones who dishonour cheques. Resign immediately and get a job with a more organised employer.

Thirdly, fraudsters are all over badgering bank staff to let them draw against uncleared cheques by calling them "pay cheques".

And finally, if your liquidity situation is such that you need to access those funds immediately, then you have a different set of problems.

But what about bank cheques? Aren't they as good as cash?

In a nutshell, no. Bank cheques can be forged or stolen. Thus they're subject to the same rules as every other cheque.

Try to get anyone paying you money to credit your account directly. It's far less messy than cheques. Cheques are, as I mentioned before, a form of IOU, and as with all IOUs, it's the payee who bears the risk.

--
Dikkii's financial tips index

Standard but necessary disclaimer: This is not advice. Only a complete idiot would think that any of this constituted advice. It's not even vaguely reasonable to consider this to be advice. If you are in any doubt as to the content of this, see a good, independent financial adviser immediately. They do exist.

Doggerel #100

Over at the Bronze Blog (formerly Rockstar's Ramblings), Bronze Dog has churned out his 100th post in this excellent series.

This is a sensational achievement, and an excellent post to boot - he's looked at "Truth" for this one.

Not being one to rest on his laurels, he's immediately followed this up with Doggerel #101, which is about the phrase, "We can believe whatever we want!"

I say congratulations, BD. Well done.