Your Stimulus Is Ready, Sir

American Scofflaw

Let's use $20/hour for a hypothetical road repair construction wage. There are 2080 "working" hours in a year, less holidays, leaving 2000 working hours per vacationless, no-sick-dayless year. On top of that is another 11% minimum for FICA, workmen's comp. unemployment insurance, etc - often more. Doing the math, these jobs are gonna cost BO $44,400 per job-year. A little more math shows that BO's $1.36 billion buys 30,630 direct job-years. Historically, every basic job has generated 0.6 additional jobs. So, the number grows to a tad over 49,000 job-years.

At a $7.15 minimum wage, the total jumps to a little over 137,000 job-years. That's about 5.48% on BO's 2.5 million job target. This is the bulk of the job creation brainstorm. Only 2,363,000 jobs left to go.

The cost is about 0.16% of the $850 billion that Congress MIGHT bump the package to. Where does the other $848.64 billion go? There's $400 billion going to states over two years. Still missing $448.64 billion (a little less than $1500 per capita).

Gotta pay of this package somehow. Tax revenues will be down in a down economy. And there's a proposed tax cut of $140 billion (about $460 per capita). Two options, or some combination thereof; borrow or print. There is concern about an adequate source of lenders, especially if the dollar drops as predicted, so BO cannot be sure of that option. Printing (monetizing) drives inflation at a very bad time, but it's an
option that will be there - and note that inflation is just a somewhat different form of tax.

In BO's defense, he knows that the auto shoe is timed to drop on him at the worst possible moment. This is a lot of jobs at stake, at an unknown cost IF he can get something through Congress. That's a real IF given that there has been competent balking just to push the drop dead date to inauguration. The absence of any detail at all from the BO camp on this issue speaks volumes (of financial porn), and not just about the
auto mess.

BO has known for certain that this was gonna be his baby for 50 days. His feet hit the ground in 26 days (including 2 holidays). And he's on vacation (shades of early W). This am's news and data suggest that the ppt is NOT on vacation, and that's not in BO's favor.

Convicted Thugs Heart and Soul of Mass Film Biz

American Scofflaw
"O’Brien said the union does not do criminal background checks on members because removing a felon could be construed as an unfair labor practice. “We don’t discriminate against anyone,” he said."--------Sean O’Brien

Is this yo-yo kidding me????

By Dave Wedge

Teamsters Local 25 has sought to shed its shady film industry past, but the union still allows career felons - including a killer, bank robbers and repeat drunken drivers - to rake in up to $3,000 a week on taxpayer-subsidized movie sets without going through basic criminal background checks.

A Herald probe matched criminal records to the names of nearly a dozen Teamsters who drove stars and crew on the set-in-Boston Bruce Willis flick “The Surrogates” this summer, among them an armored car thief, a murderer-turned-accused rapist and various thugs, including a Hells Angel identified by law enforcement sources.

The cop drama, like other movies shot in the Bay State since 2007, received generous film industry tax breaks championed by Gov. Deval Patrick, House Speaker Salvatore F. DiMasi and Senate President Therese Murray.

Local 25 president Sean O’Brien acknowledged several felons are active Teamsters working in the Hub film industry, but said there have been “no incidents” or complaints since he took over the troubled union in August 2006.

“I can’t change the sins of the past,” O’Brien said. “All I can control is what goes on on these movie sets.”

But Sen. Richard Tisei (R-Wakefield) called $100 million in film industry tax breaks “giveaways” and said news that felons are still landing on movie sets is “disheartening.”

“That is serious cause for concern,” Tisei said. “I was under the understanding that Massachusetts was making a fresh start.”

O’Brien said the union does not do criminal background checks on members because removing a felon could be construed as an unfair labor practice. “We don’t discriminate against anyone,” he said.

Among the felons who worked on “The Surrogates” according to criminal records and a Teamster source:

• Charles Doucette, 49, of Beverly: A killer and armed home invader paroled in 2006, he was fired from “The Surrogates” after crashing a truck, and is now in prison awaiting trial on rape charges.

• Jon M. Campagna, 50, of Winthrop: A Teamster driver, he’s got seven drunken driving convictions on his 30-year record, most recently in 2001.

• Gilbert J. “Gigi” Eatherton, 61, of Charlestown: A Teamster “captain,” or job site manager, he served 10 years in federal prison for a 1975 Boston bank heist and has two DUIs, the latest in 1995.

• Joseph Abruzzese, 57, of Lynn: A 33-year Teamster, he served six years in the 1980s for assault.

• Diulio “Lilo” Fabbo, 38, of Medford: He served a year for a 1995 gun rap, and was convicted of assault and battery in 1991.

• Keith A. Leahy, 38, of Charlestown: Shot in a wild shootout with armored car guards in Harvard Square in 1996, he was released in 2003 after serving seven years.

• Another Teamster working on local movie sets is convicted cocaine trafficker Michael Indelicato, who was released from federal prison in 2006 after serving 15 years.

Canadian IT Exec Accused Of Stealing Customer Database

By Tim Wilson

An IT manager of a Canadian direct marketing firm has been accused of absconding with a copy of the company's customer database.

According to a report in last week's Vancouver Sun, an affidavit filed with the British Columbia Supreme Court accuses Nick Belmonte, vice president of IT at C-W Group, of stealing a computer backup tape containing names and information about 3.2 million customers -- potentially worth more than $10 million. The tape also contained credit card and bank account information of more than 800,000 customers.

"The customer library could also potentially be marketed as a discrete asset with a value in the tens of millions of dollars," the affidavit said.

In her affidavit, C-W chief executive Gloria Evans recalled she became extremely concerned that Belmonte had recently ordered another employee to bring three backup tapes to his office, where he made copies. Only two tapes were found on Belmonte's desk. "The tape containing the customer library data was missing," the statement says.

Evans and another top executive, Brian Page, phoned Belmonte, who denied knowing anything about a third tape, according to the court documents. The CEO then changed the locks on the computer room and terminated off-site access to the company's computer system.

Although the information on the backup tape was encrypted, the tape contained information and programs that would allow a knowledgeable user to decrypt the data, the report states.

Page's statement in the court records suggests that Belmonte was a "problem employee" whose office attendance was irregular, who charged lunches with his friends to the company, and who had informed employees he would be leaving soon.

The court records include an e-mail sent by Belmonte at 1:05 a.m. on Nov. 5, saying he was on stress leave because he had been wrongly accused of theft.

Your Banker As Gestapo

by
Larry C. Grossman

I urge you to pay close attention because this development could impact your future retirement more than anything I have encountered in the last 20 years.

I'm aware that this headline may seem a little bit extreme, but unfortunately it's the truth.

The government has already turned your banker into a federal agent who can confiscate your assets without warning or cause.

This is why you MUST consider getting at least part of your retirement assets out of the country while you still have the opportunity. Very soon it may be too late.

If you've read my articles over the years, you know I'm not a wily reactionary. Nor do I try to scare my readers with my articles. But honestly, today I need to raise a red flag because frankly, this is serious.

I'm more concerned about the markets now than I have been at any other time in my 20 years in the business. And whether you agree that this could be the perfect financial storm or not, it's time to acknowledge the steps our government is taking to deal with this mess.

Right now, they're wracking their brains to come up with short-term solutions for this mess. But long-term, the consequences of their actions could have a very serious impact on your retirement savings.

Devil in the Details of Paulson's Plan

As the saying goes 'the devil is in the details.' Well, nothing could be truer for Paulson's new TARP bailout plan. The following text is buried deep within the bill passed recently by congress:

NECESSARY ACTIONS. -The Secretary is authorized to take such actions, as the Secretary deems necessary to carry out the authorities in this Act, including, without limitation, the following:

Designating financial institutions as financial agents of the Federal Government, and such institutions shall perform all such reasonable duties related to this Act as financial agents of the Federal Government as may be required.

Broad sweeping authority to do whatever they want to do! "Financial agents of the Federal Government," what does this mean to you and your retirement plan? Well here are a few potential scenarios...

Let's say foreigners stop buying treasury bonds because they become even more nervous about the uncertainty in our banking system. Face it, we can't survive without foreigners continually buying up treasuries. If suddenly they stopped buying, the government would have to do something to finance the debt.

Panic Scenario # 1 - The government tells your banker to purchase U.S. Treasuries with 50% of your retirement plan, or worse. (How about 100%?)

But that doesn't work as well as they want, so they have to figure something else out...

Panic Scenario #2 - The government tells your banker to stop any transfers outside of the U.S., No more offshore accounts! (Highly likely during an Obama presidency.)

Things continue to go downhill and they become even more and more desperate...

Panic Scenario #3 - The government tells your banker to confiscate all gold in retirement plans for the good of the country! (This has already occurred once in American history.)

And finally the "Nuclear Option" we get a president who decides the right thing to do is 'redistribute' the wealth...

Panic Scenario #4 (worst case!) - The government tells your banker to confiscate all retirement plans over US$250,000 so we can redistribute the wealth! (But don't worry we are going to have universal health care and they will take care of us so you don't need it anyway.)

With a stroke of the legislative pen and passage of the bailout bill, all these nightmare scenarios could be very real possibilities. As government agents, the banks (including yours) will have no means to protect your interests against aggressive 'redistribution' or the bold new plans of a welfare state.

As a result, this could be one of the last opportunities you ever get to take urgent action now; before your retirement plan is in jeopardy.

How to Take Your Plan Offshore

There are basically two types of retirement plans, Qualified and Non-Qualified. Non-Qualified include IRAs, SEPs and Keogh's. Qualified plans cover all of the rest and are handled in a slightly different manner.

IRAs require a U.S. Custodian, so this becomes your biggest challenge. There are very few custodians who allow you to totally self-direct your account including using non-U.S. investments and taking it offshore.

If you want to take your IRA or pension plan offshore you must use a totally flexible self-directed custodian who will allow you to take your account offshore. To find out whether they can help, just ask them - "Can I take my plan offshore?"

So how do you take your plan offshore? The following methods are allowed: A direct purchase of non-U.S. real estate, a foreign bank account, a non-U.S. annuity, a foreign corporation or in some cases even direct investment into a non-US investment.

There are a couple of other custodians who will allow you to use one or more of these options, but I am only aware of one company who allows all of them. This may be important if you want to use several different methods of transfer, or if you want to make multiple kinds of investments through one custodian to keep things simple.

Qualified Plans require a U.S.-based administrator and demand "the indicia of ownership" remain within the United States. These plans are simpler in some cases and more complex in others to deal with than an IRA. I have reviewed hundreds of plans and the language within the plan is critical, as well as your plan administrator.

In my last article for the A-Letter I mentioned a client whose administrator told them they couldn't invest in property offshore despite the rules laid out in the plan's language. After a good deal of back and forth on my part with the trustee and record keeper, I was finally able to convince them to allow the investment.

How to Configure Your Offshore Retirement Plan

In both cases, you want to have a foreign bank account in your retirement plan if it is allowed. I am currently aware of three banks, which allow Americans to open retirement accounts with them. You would work with your banker in developing an investment strategy using their expertise and services.

The bottom line is that you need someone qualified to review your plan document and to assist you in structuring the investment in a compliant manner.

Timing doesn't allow me to discuss in much greater detail the specifics of taking your plan offshore. For now you need to be aware that you can do this regardless of what you have been told. And I am more convinced than ever that there isn't much time left to take advantage of this incredible opportunity.