Sunday, July 08, 2007
The insolvency-illiterate financial journalist
“Rank” may be thought an old-fashioned word. Other than something used in the military and at vice-regal dinners, and a thing more colloquially “pulled”, aren’t we all egalitarian, or a meritocracy at least?
Not in insolvency law – nor hence in investment decisions, or well-informed ones, at least.
Rank is fundamental to insolvency law, but unlike vice-regal dinners or the military (is colonel higher than corporal or vice versa, and who cares, anyway?), it is not a system of esoteric taxonomies and/or shoulder-pads. All one needs to know is that secured creditors rank above unsecured ones, and that secured creditors also have a ranking system within their own group. Generally one’s latter ranking, i.e. compared to other secured creditors, is based on being first in time. When different creditors/lenders have the same class of security over the same property, e.g. a mortgage, ranking is unambiguous and acute between them. Should the borrower go belly-up, the holder of the original, or “first” mortgage, first gets paid in full, or as much as possible. Should there be anything then left over, the second mortgagee then gets a bite, and so on, down to unsecured creditors. But even for the second-ranked, these are usually slim pickings – the essence of rank is that one’s situation is never affected by either weight of numbers below, or by the second-ranked becoming a bit too familiar and so attempting to elide the ranks near the top. Thus, a first mortgagee does not have to even consider the existence of a second mortgagee when it comes to the timing of a mortgagee sale. In practice, and in the case of a severe downturn, a second mortgagee is often no better off than an unsecured creditor.
AFR “Investor” editor Nicole Pedersen-McKinnon looks from her byline photo to be in her mid-20s. Whether because of an indulgent boomer-parented GenY upbringing (“every child gets a prize”), or because she is too young to remember recession, she has a seeming cognitive blind-spot when it comes to understanding rank in insolvency law. Hence her bizarre description, in a column in today’s Age, of what a second mortgage is:
“What all four companies [Westpoint, Fincorp et al] have in common is that they all invested in second mortgages – mortgages over other mortgages. In other words, mortgages than were not secured by property but by, well, pieces of paper”.
Oh dear. I’m sentencing you to 80s’ boot-camp, Nicole. A few years of feel-the-width shoulder-padded decadence, followed by an abrupt stop-the-music moment in which 20 people try to sit on the one chair left in the room. Only that it’s really no contest: the first-ranked of course gets the chair, and everyone one else has to pretend that they didn’t know the game was always going to end exactly as it did .
“Rank” may be thought an old-fashioned word. Other than something used in the military and at vice-regal dinners, and a thing more colloquially “pulled”, aren’t we all egalitarian, or a meritocracy at least?
Not in insolvency law – nor hence in investment decisions, or well-informed ones, at least.
Rank is fundamental to insolvency law, but unlike vice-regal dinners or the military (is colonel higher than corporal or vice versa, and who cares, anyway?), it is not a system of esoteric taxonomies and/or shoulder-pads. All one needs to know is that secured creditors rank above unsecured ones, and that secured creditors also have a ranking system within their own group. Generally one’s latter ranking, i.e. compared to other secured creditors, is based on being first in time. When different creditors/lenders have the same class of security over the same property, e.g. a mortgage, ranking is unambiguous and acute between them. Should the borrower go belly-up, the holder of the original, or “first” mortgage, first gets paid in full, or as much as possible. Should there be anything then left over, the second mortgagee then gets a bite, and so on, down to unsecured creditors. But even for the second-ranked, these are usually slim pickings – the essence of rank is that one’s situation is never affected by either weight of numbers below, or by the second-ranked becoming a bit too familiar and so attempting to elide the ranks near the top. Thus, a first mortgagee does not have to even consider the existence of a second mortgagee when it comes to the timing of a mortgagee sale. In practice, and in the case of a severe downturn, a second mortgagee is often no better off than an unsecured creditor.
AFR “Investor” editor Nicole Pedersen-McKinnon looks from her byline photo to be in her mid-20s. Whether because of an indulgent boomer-parented GenY upbringing (“every child gets a prize”), or because she is too young to remember recession, she has a seeming cognitive blind-spot when it comes to understanding rank in insolvency law. Hence her bizarre description, in a column in today’s Age, of what a second mortgage is:
“What all four companies [Westpoint, Fincorp et al] have in common is that they all invested in second mortgages – mortgages over other mortgages. In other words, mortgages than were not secured by property but by, well, pieces of paper”.
Oh dear. I’m sentencing you to 80s’ boot-camp, Nicole. A few years of feel-the-width shoulder-padded decadence, followed by an abrupt stop-the-music moment in which 20 people try to sit on the one chair left in the room. Only that it’s really no contest: the first-ranked of course gets the chair, and everyone one else has to pretend that they didn’t know the game was always going to end exactly as it did .
Wednesday, July 04, 2007
Doctors and extra-curricular jihad
“[W]hat greater mockery of the Hippocratic oath is there than the [immigrant] doctor who wants to blow the arms and legs off the people who live there?” asks a Glenwood NSW letter to the editor in today’s Australian. Presumably even doctors who deliberately kill their patients with syringes or scalpels while on the job (as Dr Jayant Patel is alleged to have done to dozens, and the UK’s Dr Harold Shipman did to hundreds), are less evil than immigrant* doctors who unsuccessfully attempt (or even idly wish for) wholesale amputations while off the job in their adopted home. The moral high ground of Sydney’s white-trash is a beautiful thing.
Such white-trash moralising is also exquisitely captured in a story in today’s Oz by
Tony Koch and Hedley Thomas: “Medic was nothing out of the ordinary”. The detained doctor apparently lives (or lived) in a rented bedsit, for which he pays $250 a week. The story nonetheless gushes: “Although [the doctor] was paid more than $70,000 a year by Queensland Health, he lived frugally in the unit”. Gee, a young doctor, who I assume was putting in killer hours of unpaid overtime on the job like most doctors, apparently didn’t use his limited spare (i) time and (ii) income to make his rip-off rented bedsit a luxury haven, or a swingin’ party pad. And on “more than $70,000 a year”! (Never mind that his modest new, or almost new, $30,000 car would have eaten, with his rent, at least two-thirds of his net income). What was wrong with him?
It should not surprise anyone that a visibly downwardly-mobile and likely overworked doctor seems to have developed unhealthy extra-curricular interests. When you live in a bedsit, lonely and dog-tired, the internet is your natural best friend. It was a choice of MySpace or JihadNetworking.com for the GenY doctor. And only one of these would jarringly remind him, the next morning at work, just what a pawn he was in a global and transient labour pool, a speck in a drowning mass clutching at straws by night in sad bedsits.
Update 15 July 2007
I’m embarrassed about what I wrote in the above post, in the light of subsequently revealed facts. Dr Haneef’s online activities turn out to have been beyond reproach. I wrote the above post based on reading between the lines of three facts of the police case as it then stood: the doctor was leaving Australia in a suspicious hurry, he had not taken leave from his job to do so, and that his leaving his laptop with a friend before he wnet to the airport was his sole measured act in taking leave.
Each of these “facts” has since emerged, of course, to be palpably false. The next day (5 July), Age reports (somewhat surprisingly, I admit, given that the Age is generally a decrepit rag) managed to show that an ordinary journo or two is better than hundreds of federal police in finding out very basic information. Such as: (i) Dr Haneef had a wife and newborn child in India, which rather explains his leaving Australia, and (ii) He had taken leave from his job to do so. The third 180-degree correction emerged later: Dr Haneef had not only left his laptop with a friend before he left Australia, he also entrusted his car and some jewellery for safe-keeping with the same friend.
I probably should have run this update/correction much earlier. Or at the very least, emphasised that even if Dr Haneef had patronised jihad websites, or somesuch, this should not of itself be a crime. But qualifying this, if he was such a patron, and he had a personal connection with in-real-life terrorists, then he should be thoroughly questioned and investigated as to his real-life links. There was hence nothing inappropriate about bringing Dr Haneef in for questioning over his real-life links to real-life (alleged) terrorists. Twelve hours of questioning over a 24 hour period should have been ample for this. In case the point needs to be made, it is not appropriate for police to detain a person for the duration it takes to inventorise, and then check as "innocent", the suspect's entire cyber-history, as oppposed to real-life links. Unless, that is, that person is reasonably suspected of planned involvement in an imminent terrorist attack. Dr Haneef's flight to India seems to rule out the latter.
The reason I didn’t run this update/correction earlier is my gratuitous lingering at the scene of an almightly train-wreck, not wanting to leave until it was officially returned to “normal”; i.e. most likely that Dr Haneef was released without charge. Some hope.
The AFP’s early incompetence, if not malevolence, should have been enough for me to know that this was going to end badly – if you’ll allow yesterday’s charging of Dr Haneef as an “end” of sorts – but I wanted to believe that the feds couldn’t be quite that bad, that maybe they knew from the beginning what the Age had found out, but were playing some kind of strategic game with the media. Plus there was, until very recently, still that apparently incriminating, handballed laptop.
To charge Dr Haneef with supporting terrorism on the basis of a mobile-phone SIM card (left with his housemate/second-cousin when Dr Haneef left England in March 2006, to start work in Australia a few months later) is a travesty. The SIM card in question was apparently under a contract until August 2006 (penultimate URL), which is important for two reasons.
But first, there are two types of people in the world: “prepaid” and “contract” types. I am definitely the latter. I simply can’t comprehend why anyone would object to getting much cheaper mobile phone costs, in return for a bit of future commitment. Another way of putting it is that we contract-types are tight with money. We don’t need a physical credit meter on our phones, as we were given a hard-wired mental “meter” at birth, thank you very much. The only downside is that contracts do sometimes turn out to be painfully long, especially when circumstances change. But don’t think that this means the “prepaids” were right all along. We “contracts” will do almost anything to avoid simply paying-out a contract we can’t use, such as because of an overseas move. Even giving a SIM-card to a friend ensures that the phone company doesn’t ever get the satisfaction of getting our money in return for precisely nothing. Simply donating one’s hard-earned cash to phone companies is for schmucks, aka “prepaids”.
Why the obviously “prepaid” AFP has trouble understanding the other half of the human race is baffling. Contracted SIM-cards, more so than prepaid ones, are highly traceable. Contracted SIM-cards are akin to pens, writing-paper and postage stamps – if put into the hands of terrorists, then yes, they may be used for terrorist communications, but it is absurd to categorise them as inherently suspicious items. As with blank writing-paper, terrorist use of a mobile phone SIM-card left with another is to do with the message only, and not the medium. But unlike blank writing-paper, which is actually globally useful, there are, as I have said, perfectly natural and understandable reasons for giving a contracted SIM-card to a friend, when leaving a country.
After two weeks of intense media reportage, I’ll finish by awarding to the media one bouquet, and one brickbat, plus another brickbat to a truly contemptible human being. To Hedley Thomas at the Oz (who I dissed in the initial post) kudos for running in Friday’s paper (13 July), seizing on an apparent AFP leak, that the police case was basically a crock.
How pathetic of yesterday’s Age (14 July) then, to run this brown-nosing pseudo-leak, in an apparent attempt at one-upmanship:
Federal police are sceptical. In an affidavit presented to a magistrate, an officer is quoted as saying he suspected Dr Haneef "has not been entirely truthful" about his departure.
Two sources have confirmed that much of that suspicion rests on an email Dr Haneef sent just before his thwarted departure, and after news of the initial British arrests had been aired.
"He said he had to leave in a hurry. He made no mention of his sick wife or child," said one official.
By running this wafer-thin innuendo on its front page, the Age managed to more than undo its credible, nay even investigative, journalism of the previous week.
The other brickbat goes to Callum Spence, Dr Haneef’s landlord/slumlord, for making moves to evict his tenant while the doctor was locked up without charge. “[I’m only doing it] because I need the rent money” Spence, evidently one of humanity's "prepaids", was quoted as saying. You evidently need a soul more than you need money, Callum.
* The letter-writer actually writes “asylum-seeker”, no doubt choosing that odd descriptor (for a doctor recruited from the UK to Australia via completely conventional channels) because she didn’t want to sound like an uneducated racist by using the “immigrant” word. As we all know, “asylum-seekers” are the sort of immigrants who throw their children overboard.
“[W]hat greater mockery of the Hippocratic oath is there than the [immigrant] doctor who wants to blow the arms and legs off the people who live there?” asks a Glenwood NSW letter to the editor in today’s Australian. Presumably even doctors who deliberately kill their patients with syringes or scalpels while on the job (as Dr Jayant Patel is alleged to have done to dozens, and the UK’s Dr Harold Shipman did to hundreds), are less evil than immigrant* doctors who unsuccessfully attempt (or even idly wish for) wholesale amputations while off the job in their adopted home. The moral high ground of Sydney’s white-trash is a beautiful thing.
Such white-trash moralising is also exquisitely captured in a story in today’s Oz by
Tony Koch and Hedley Thomas: “Medic was nothing out of the ordinary”. The detained doctor apparently lives (or lived) in a rented bedsit, for which he pays $250 a week. The story nonetheless gushes: “Although [the doctor] was paid more than $70,000 a year by Queensland Health, he lived frugally in the unit”. Gee, a young doctor, who I assume was putting in killer hours of unpaid overtime on the job like most doctors, apparently didn’t use his limited spare (i) time and (ii) income to make his rip-off rented bedsit a luxury haven, or a swingin’ party pad. And on “more than $70,000 a year”! (Never mind that his modest new, or almost new, $30,000 car would have eaten, with his rent, at least two-thirds of his net income). What was wrong with him?
It should not surprise anyone that a visibly downwardly-mobile and likely overworked doctor seems to have developed unhealthy extra-curricular interests. When you live in a bedsit, lonely and dog-tired, the internet is your natural best friend. It was a choice of MySpace or JihadNetworking.com for the GenY doctor. And only one of these would jarringly remind him, the next morning at work, just what a pawn he was in a global and transient labour pool, a speck in a drowning mass clutching at straws by night in sad bedsits.
Update 15 July 2007
I’m embarrassed about what I wrote in the above post, in the light of subsequently revealed facts. Dr Haneef’s online activities turn out to have been beyond reproach. I wrote the above post based on reading between the lines of three facts of the police case as it then stood: the doctor was leaving Australia in a suspicious hurry, he had not taken leave from his job to do so, and that his leaving his laptop with a friend before he wnet to the airport was his sole measured act in taking leave.
Each of these “facts” has since emerged, of course, to be palpably false. The next day (5 July), Age reports (somewhat surprisingly, I admit, given that the Age is generally a decrepit rag) managed to show that an ordinary journo or two is better than hundreds of federal police in finding out very basic information. Such as: (i) Dr Haneef had a wife and newborn child in India, which rather explains his leaving Australia, and (ii) He had taken leave from his job to do so. The third 180-degree correction emerged later: Dr Haneef had not only left his laptop with a friend before he left Australia, he also entrusted his car and some jewellery for safe-keeping with the same friend.
I probably should have run this update/correction much earlier. Or at the very least, emphasised that even if Dr Haneef had patronised jihad websites, or somesuch, this should not of itself be a crime. But qualifying this, if he was such a patron, and he had a personal connection with in-real-life terrorists, then he should be thoroughly questioned and investigated as to his real-life links. There was hence nothing inappropriate about bringing Dr Haneef in for questioning over his real-life links to real-life (alleged) terrorists. Twelve hours of questioning over a 24 hour period should have been ample for this. In case the point needs to be made, it is not appropriate for police to detain a person for the duration it takes to inventorise, and then check as "innocent", the suspect's entire cyber-history, as oppposed to real-life links. Unless, that is, that person is reasonably suspected of planned involvement in an imminent terrorist attack. Dr Haneef's flight to India seems to rule out the latter.
The reason I didn’t run this update/correction earlier is my gratuitous lingering at the scene of an almightly train-wreck, not wanting to leave until it was officially returned to “normal”; i.e. most likely that Dr Haneef was released without charge. Some hope.
The AFP’s early incompetence, if not malevolence, should have been enough for me to know that this was going to end badly – if you’ll allow yesterday’s charging of Dr Haneef as an “end” of sorts – but I wanted to believe that the feds couldn’t be quite that bad, that maybe they knew from the beginning what the Age had found out, but were playing some kind of strategic game with the media. Plus there was, until very recently, still that apparently incriminating, handballed laptop.
To charge Dr Haneef with supporting terrorism on the basis of a mobile-phone SIM card (left with his housemate/second-cousin when Dr Haneef left England in March 2006, to start work in Australia a few months later) is a travesty. The SIM card in question was apparently under a contract until August 2006 (penultimate URL), which is important for two reasons.
But first, there are two types of people in the world: “prepaid” and “contract” types. I am definitely the latter. I simply can’t comprehend why anyone would object to getting much cheaper mobile phone costs, in return for a bit of future commitment. Another way of putting it is that we contract-types are tight with money. We don’t need a physical credit meter on our phones, as we were given a hard-wired mental “meter” at birth, thank you very much. The only downside is that contracts do sometimes turn out to be painfully long, especially when circumstances change. But don’t think that this means the “prepaids” were right all along. We “contracts” will do almost anything to avoid simply paying-out a contract we can’t use, such as because of an overseas move. Even giving a SIM-card to a friend ensures that the phone company doesn’t ever get the satisfaction of getting our money in return for precisely nothing. Simply donating one’s hard-earned cash to phone companies is for schmucks, aka “prepaids”.
Why the obviously “prepaid” AFP has trouble understanding the other half of the human race is baffling. Contracted SIM-cards, more so than prepaid ones, are highly traceable. Contracted SIM-cards are akin to pens, writing-paper and postage stamps – if put into the hands of terrorists, then yes, they may be used for terrorist communications, but it is absurd to categorise them as inherently suspicious items. As with blank writing-paper, terrorist use of a mobile phone SIM-card left with another is to do with the message only, and not the medium. But unlike blank writing-paper, which is actually globally useful, there are, as I have said, perfectly natural and understandable reasons for giving a contracted SIM-card to a friend, when leaving a country.
After two weeks of intense media reportage, I’ll finish by awarding to the media one bouquet, and one brickbat, plus another brickbat to a truly contemptible human being. To Hedley Thomas at the Oz (who I dissed in the initial post) kudos for running in Friday’s paper (13 July), seizing on an apparent AFP leak, that the police case was basically a crock.
How pathetic of yesterday’s Age (14 July) then, to run this brown-nosing pseudo-leak, in an apparent attempt at one-upmanship:
Federal police are sceptical. In an affidavit presented to a magistrate, an officer is quoted as saying he suspected Dr Haneef "has not been entirely truthful" about his departure.
Two sources have confirmed that much of that suspicion rests on an email Dr Haneef sent just before his thwarted departure, and after news of the initial British arrests had been aired.
"He said he had to leave in a hurry. He made no mention of his sick wife or child," said one official.
By running this wafer-thin innuendo on its front page, the Age managed to more than undo its credible, nay even investigative, journalism of the previous week.
The other brickbat goes to Callum Spence, Dr Haneef’s landlord/slumlord, for making moves to evict his tenant while the doctor was locked up without charge. “[I’m only doing it] because I need the rent money” Spence, evidently one of humanity's "prepaids", was quoted as saying. You evidently need a soul more than you need money, Callum.
* The letter-writer actually writes “asylum-seeker”, no doubt choosing that odd descriptor (for a doctor recruited from the UK to Australia via completely conventional channels) because she didn’t want to sound like an uneducated racist by using the “immigrant” word. As we all know, “asylum-seekers” are the sort of immigrants who throw their children overboard.
