That doesn't make sense. A cheque is returned to the home bank as quickly as practical, either directly, through a clearing house or via 3rd party banks. Once it's there, it stays unless bounced back. There's no reason for it to keep making the rounds. Kiting requires issuing a series of checques to cover the previous ones. Peter Hiscocks wrote:

I heard of one kiting scheme that was finally discovered when the magnetic ink on the cheque wore down to the point that it could no longer be read by the cheque-reading machines and had to be handled by a human. Apparently the cheque had been going back and forth across the continental US for several weeks before that happened.

Peter

On Mon, Dec 08, 2003 at 11:52:49PM -0500, Gary Layng wrote:

...

I think I can google something up, but for now: - kiting is illegal. The scheme depends on how long it takes cheques to clear the central clearing facility that all banks share. Imagine you have two bank accounts with, say, $50 in each. You cut a cheque from your account in Bank 1 for, say, $5 million, and deposit it into the account you have in Bank 2. At the same time you also cut a cheque from the Bank 2 account and deposit it into the account in Bank 1. When the cheques clear, you have enough money to cover them. You get the interest on the $10 million dollars you had for two-three days in the two accounts. - Margin is perfectly legal. "On margin" means that you borrowed money from your broker to buy shares. Typically the broker lends you up to about 75% of the value of the shares. If the value of the shares drops 25% you get a "margin call" and they can sell the shares. You're leveraging your potential capital gains by borrowing the money, but it's quite dangerous.

His Lordship Mayhem

-----Original Message----- From: owner-tlug-lxSQFCZeNF4 at public.gmane.org [mailto:owner-tlug at ss.org] On Behalf Of Byron Sonne Sent: Monday, December 08, 2003 7:30 PM To: tlug-lxSQFCZeNF4 at public.gmane.org Subject: Re: [TLUG]: *Really* bad week for SCO

...

its stock price may jump to $50, and if you hold -100 of them, you'll now have to pay $5000 to close out your position, and you're in the hole

big

...

time.

Does anyone have a link to a site or some docs that explain, to a putz like me, what all this various financial wizardry is?

I've seen shorting briefly explained here, but what about kiting, selling on margin, etc, and various other techniques and scams? I'd like to know but I don't have the inclination to read entire books about this stuff, or become a CPA or something.

Later, B -- The Toronto Linux Users Group. Meetings: http://tlug.ss.org TLUG requests: Linux topics, No HTML, wrap text below 80 columns How to UNSUBSCRIBE: http://tlug.ss.org/subscribe.shtml

-- The Toronto Linux Users Group. Meetings: http://tlug.ss.org TLUG requests: Linux topics, No HTML, wrap text below 80 columns How to UNSUBSCRIBE: http://tlug.ss.org/subscribe.shtml

-- The Toronto Linux Users Group. Meetings: http://tlug.ss.org TLUG requests: Linux topics, No HTML, wrap text below 80 columns How to UNSUBSCRIBE: http://tlug.ss.org/subscribe.shtml