Results 1 to 10 of 10

Thread: early weekend commentary - Actions and Reactions

  1. #1
    Banned Melonie's Avatar
    Joined
    Jul 2002
    Location
    way south of the border
    Posts
    25,932
    Thanks
    612
    Thanked 10,563 Times in 4,646 Posts
    Blog Entries
    3
    My Mood
    Cynical

    Default early weekend commentary - Actions and Reactions

    Sorry for not posting for the past couple of days. I've actually been travelling back to the US on short notice ... in reaction to this week's 'developments'.

    As some of you already know, I had been 'hanging onto' ownership of a house in northern New York. This was partly to postpone unrealized capital gains on the property, and also as a 'hedge' which would have provided me with somewhere to return to if my 'way south of the border' relocation was no longer necessary. This week's 'developments' have convinced me that my 'way south of the border' relocation must now become permanent. As a result I am already in the process of selling my New York house. The primary reason is of course to book the capital gains at this year's 15% capital gains tax rate, as opposed to the 20% capital gains tax rate plus a new 3.8% medicare tax on 'unearned' income including capital gains, that will now certainly take effect in January. Also, I can avoid having to pay the higher property tax rates which were just authorized by local voters.

    I had also 'hung onto' my partnership investment in a private enterprise which provided dividend income. I am in the process of selling my partnership share. The primary reason of course is to book the dividend income in 2012 at this year's 15% dividend tax rate, as opposed to the 33% ( depends on my total income ) effective tax rate on dividend income + a new 3.8% medicare tax on 'unearned' income including dividend income that will now certainly take effect in January.

    I have also been 'reallocating' my investments. As the result of voices which had called for the labeling of China as a currency manipulator having been 'silenced', it's now pretty clear that China in particular and Asia in general will benefit disproportionately from the FED's continued 'money printing'. So I bought some 'comparative bargain' stock shares of a couple of South Korean companies which do heavy outsourcing of component parts to China and export finished products to the USA.

    Also, to take advantage of the continued or accelerating FED 'money printing' that will now almost certainly take place, I increased my physical gold holdings. I considered increasing my silver holdings as well, but decided against doing so based on the fact that a large portion of the demand for silver comes from industrial production needs.

    I also bought shares in the USO oil ETF, as a speculative investment based on increased probability that future US oil drilling and canadian pipeline imports will be restricted, and/or that middle east 'tensions' will increase to the point of affecting oil markets.

    I would point out that, on yesterday's flight up from Mexico City, I was far from the only American ex-pat !!! Talking with a couple of other American ex-pat passengers, they were also in a hurry to transfer their remaining US assets outside the country as soon as possible in order to avoid the potential enactment of a 30% 'exit tax'. They pointed out that this has already been discussed under the umbrella of the ObamaCare law, and if enacted would impose a mandatory withholding ( = seizure ) of 30% of the amount of any US funds being transferred outside the country in anticipation of future US tax liability.
    Last edited by Melonie; 11-08-2012 at 10:21 AM.

  2. #2
    Veteran Member
    Joined
    Oct 2009
    Posts
    493
    Thanks
    32
    Thanked 211 Times in 137 Posts

    Default Re: early weekend commentary - Actions and Reactions

    ^^^I guess it's all a matter of perspective. More than a few of my ex-pat acquaintances who had left after Bush II won a 2nd term are looking at either going back or making investments in the US. They were worried about the country going back to the policies that caused the big crash and also didn't like the idea of being in a country that was so malicious to the rest of the world. Most of them aren't so completely concerned about their own self-interests and like myself don't mind paying a little bit extra to create a more sustainable economy and help out fellow Americans. They like me also see the potential for lessening the absolutely ridiculous income and wealth gap as something that will wind up benefiting the country tremendously.
    Last edited by jimboe7373; 11-09-2012 at 09:50 AM.

  3. The Following 3 Users Say Thank You to jimboe7373 For This Useful Post:


  4. #3
    Banned Melonie's Avatar
    Joined
    Jul 2002
    Location
    way south of the border
    Posts
    25,932
    Thanks
    612
    Thanked 10,563 Times in 4,646 Posts
    Blog Entries
    3
    My Mood
    Cynical

    Default Re: early weekend commentary - Actions and Reactions

    More than a few of my ex-pat acquaintances who had left after Bush II won a 2nd term are looking at either going back or making investments in the US

    They like me also see the potential for lessening the absolutely ridiculous income and wealth gap as something that will wind up benefiting the country tremendously.
    No worries on this count. The tax increases / new taxes on their passive and active income are guaranteed to reduce that income / wealth gap !!! As to whether or not that actually benefits the US economy in general, time will tell.

    In the meantime, unless / before I'm prevented from doing so by the enactment of new US laws, I'll conduct my personal economic affairs using my own best judgement.

  5. #4
    Veteran Member
    Joined
    Oct 2009
    Posts
    493
    Thanks
    32
    Thanked 211 Times in 137 Posts

    Default Re: early weekend commentary - Actions and Reactions

    Quote Originally Posted by Melonie View Post
    In the meantime, unless / before I'm prevented from doing so by the enactment of new US laws, I'll conduct my personal economic affairs using my own best judgement.
    As is 100% your right.

  6. #5
    Banned Melonie's Avatar
    Joined
    Jul 2002
    Location
    way south of the border
    Posts
    25,932
    Thanks
    612
    Thanked 10,563 Times in 4,646 Posts
    Blog Entries
    3
    My Mood
    Cynical

    Default Re: early weekend commentary - Actions and Reactions

    also, travelling through the USA / upstate NY again brought another type of Reaction to my attention ... highly 'coincidental' layoff announcements.


    (snip)"Welch Allyn

    Welch Allyn, a company that manufactures medical diagnostic equipment in central New York, announced in September that they would be laying off 275 employees, or roughly 10% of their workforce over the next three years. One of the major reasons discussed for the layoffs was a proactive response to the Medical Device Tax mandated by the new healthcare law.

    Dana Holding Corp.

    As recently as a week ago, a global auto parts manufacturing company in Ohio known as Dana Holding Corp., warned their employees of potential layoffs, citing "$24 million over the next six years in additional U.S. health care expenses". After laying off several white collar staffers, company insiders have hinted at more to come. The company will have to cover the additional $24 million cost somehow, which will likely equate to numerous cuts in their current workforce of 25,500 worldwide.

    Stryker

    One of the biggest medical device manufacturers in the world, Stryker will close their facility in Orchard Park, New York, eliminating 96 jobs in December. Worse, they plan on countering the medical device tax in Obamacare by slashing 5% of their global workforce - an estimated 1,170 positions.

    Boston Scientific

    In October of 2009, Boston Scientific CEO Ray Elliott, warned that proposed taxes in the health care reform bill could "lead to significant job losses" for his company. Nearly two years later, Elliott announced that the company would be cutting anywhere between 1,200 and 1,400 jobs, while simultaneously shifting investments and workers overseas - to China.

    Medtronic

    In March of 2010, medical device maker Medtronic warned that Obamacare taxes could result in a reduction of precisely 1,000 jobs. That plan became reality when the company cut 500 positions over the summer, with another 500 set for the end of 2013.

    Others

    A short list of other companies facing future layoffs at the hands of Obamacare:

    •Smith & Nephew - 770 layoffs
    •Abbott Labs - 700 layoffs
    •Covidien - 595 layoffs
    •Kinetic Concepts - 427 layoffs
    •St. Jude Medical - 300 layoffs
    •Hill Rom - 200 layoffs"(snip) from


    Thinking that this might have been confined to the medical equipment industry, I did a bit more searching ...


    (snip)Since yesterday morning there has been a cascade of layoff announcements, largely unreported. It’s a surprising number of such notices, coming from all around the U.S., in a short period of time.

    As to why exactly there would be a spate of downsizings so quickly after the election, possible reasons would be:

    •Employers are distressed by the result and decided to make cuts for business reasons, for example the guy who fired 22 employees the morning after [ refers to an anecdotal report by a Vegas employer - see - sic ] , or

    •Employers saved the news until after the election in order not to cast a further pall over President Obama’s economic record, which some speculate is what happened with Boeing.

    But those two just seemed like oddball stories that made the news today. What, one might wonder, is the meaning of the rest of the list? Maybe the first rule of Jobs Armageddon is, you don’t talk about Jobs Armageddon.

    TE Connectivity to close Guilford plant, lay off 620

    Nextel to cut 20% of jobs at Virginia headquarters

    U.S. Cellular to sell Chicago customers to Sprint, shed hundreds of local jobs

    Pratt & Whitney Rocketdyne Cuts Valley Workforce

    MN Dairy Plant Closure to Result in 130 Layoffs

    Vestas to cut 3,000 more jobs

    Nearly 200 ‘family-sustaining’ jobs to be lost as HarperCollins plans to close warehouse

    Hawker Beechcraft plans to cut about 410 jobs

    Layoffs continue at Anniston weapons plant

    RIM Reportedly Cuts 200 Jobs In Irving, Texas Office
    (This one is technically a rumor, but the company statements reads much like a cloaked confirmation).'(snip) from


    Since both sources weren't exactly 'objective', I went looking for confirmation beyond the local upstate NY news media stuff confirming Welch Allyn and Stryker that originally drew my attention to the topic of 'coincidental' layoffs. The latter story above has links posted to local media confirming every one of their layoff reports.


    And, of course, major announcements such as Boeing were confirmed by mainstream financial media ...

    (snip)"Boeing announced a major restructuring of its defense division on Wednesday that will cut 30 percent of management jobs from 2010 levels, close facilities in California and consolidate several business units to cut costs.(snip)

    (snip)"Defense consultant Loren Thompson said the changes were needed to ensure Boeing's continued profitability.

    "Many investors focus on Boeing's commercial operations," Thompson said, referring to the jet-making business.

    "But defense provides 40 percent of the company's revenues and returns, so controlling costs there is crucial to maintaining the company's overall profitability."

    Boeing and other top weapons makers like Lockheed Martin, Northrop Grumman and Raytheon have focused heavily on cutting costs and drumming up foreign sales to maintain profits as they prepare for a sustained period of weaker defense budgets."(snip) from


    My confirmation efforts also turned up more examples of the forced replacement of full time workers with part time workers that was 'pioneered' by Darden Restaurants ( i.e. Olive Garden, Red Lobster etc. ) ... on a much larger scale ...

    (snip)"Kroger will soon join the ranks of Darden Restaurants and slash the hours of its non-exempt (hourly) workers to avoid millions in Obamacare penalties.

    To give you a sense of Kroger's size and importance, its sales last year were $90 billion and it employs nearly 350,000 people. Most of its jobs are hourly and the vast majority of workers are neither millionaires or billionaires.

    Faith is a mid-level manager at Kroger and reports the dire news:

    Last week we found out that, beginning in January, any employee who is not full-time at that point, will be limited to 28 hours per week and all new hires will be subject to the same policy.

    Currently, part-time employees can work as many hours as needed.

    Many Kroger employees, I believe, will be shocked to find out about this new policy.

    What this means is that Obamacare will stop tens of thousands of Kroger employees -- most of whom depend on and need the money -- from working more than 28 hours!

    Kroger is doing this to avoid paying for full-time healthcare for employees who currently only receive part-time benefits. And they will not get hit with the $3000 penalty.

    My own area is a good example. I work with four people who currently get about 36 to 40 hours a week, but they are considered part-time by Kroger and receive limited benefits. Now, they will either have to find another part-time job or they will quit and find a full-time job.
    "(snip) from


    Trying to put this in some sort of personal perspective, my own Reaction really doesn't affect anyone except myself ... well, it does allow me to legally provide fewer tax dollars to the US gov't, which might have some inconsequentially small effect on remaining Americans who pay income taxes. But the Reactions by these employers will not only have a much larger effect on Obamacare related tax dollars not being paid to the US gov't, but also have a direct effect on paycheck dollars no longer being paid TO ex US employees, as well as tax dollars no longer being paid BY those ex US employees.

    Finding this fairly significant number of 'coincidental' layoff announcements leads me to believe that, for the above companies, company management had thoroughly explored their options in advance, and had already decided upon their Reaction, in order to make their layoff announcements possible in such a 'coincidental' manner. But that also raises a question in regard to other US employers who may not have seriously explored these issues yet ... but who will now be forced to do so based on this week's Action. Thus we may see similar Reactions by other US employers in the weeks to come.
    Last edited by Melonie; 11-10-2012 at 12:01 AM.

  7. #6
    Veteran Member
    Joined
    Oct 2009
    Posts
    493
    Thanks
    32
    Thanked 211 Times in 137 Posts

    Default Re: early weekend commentary - Actions and Reactions

    ^^^What a silly post Mel, most of the companies in your first example aren't laying anyone off, they are "planning" on it. As usual you veer to the hyper-negative and reactionary. I'm pretty certain that very little of this "gloom and doom" scenario will play out in reality, just as your "$200 oil barrel", "food riots". "4,000 DOW" or the "$5 a gallon gas price" that you guaranteed before the end of the year.

    As usual there are about 30,000 variables that you fail to take into account and the end result will likely wind up looking quite different from your predictions, as it usually does. Even if your lovely doom and gloom scenario here does play out in reality- all those job losses will be dwarfed by the jobs created in the medical and health field.

    "Joanne Spetz, a health care economist at the University of California, San Francisco, foresees booming demand for a whole host of occupations: primary care doctors, nurses, physical therapists, home health aides and more. Much of the increase will likely begin in 2014, when major provisions of the Affordable Care Act take effect."

    " ...a business-backed advocacy group, studied the issue and concluded the tax will wipe out nearly 55,000 California jobs. But the council said far more jobs will be created in the state because of the billions of dollars in additional spending on medical services. All in all, the law should add 98,000 jobs to the state’s economy",
    http://www.rankinrealty.net/2012/07/...-takes-effect/

  8. The Following 2 Users Say Thank You to jimboe7373 For This Useful Post:


  9. #7
    Banned Melonie's Avatar
    Joined
    Jul 2002
    Location
    way south of the border
    Posts
    25,932
    Thanks
    612
    Thanked 10,563 Times in 4,646 Posts
    Blog Entries
    3
    My Mood
    Cynical

    Default Re: early weekend commentary - Actions and Reactions

    ^^^ During my recent travels, the residents of Syracuse I encountered didn't consider the already announced elimination of 45 jobs at Welch Allyn to be 'theoretical'. See . And the residents of Buffalo I encountered in my recent travels didn't consider a december closure of the Stryker facility, and the total elimination of it's existing jobs, to be 'theoretical' either. Instead they view it as a 'done deal' which is simply waiting for the WARN Act 60 day notice requirement to be fulfilled. I can't speak for the rest since I didn't travel to those areas and wasn't able to speak with locals. But then again, you haven't spoken to any locals either.

    In response to your citing of California losing an estimated 55,000 jobs but 'adding' a supposed 98,000 health care related jobs back to the state's economy, to make an accurate comparison you also need to cite some particulars. A good part of the 55,000 estimated California jobs to be lost are self-funding private sector jobs that provide 'new' tax revenue to the state based on additional 'wealth' created by said private sector business. But most of the 98,000 jobs to be added will be taxpayer / gov't funded jobs, that 'recycle' tax revenue dollars that must first be provided by others ( i.e. new Obamacare taxes and increased California state income taxes ). It will indeed be interesting to see what sort of Reaction comes from the remaining California private sector businesses and remaining California 'high earning' residents.

    However, the upstate NY job losses are no longer of any direct concern to me, since I will have 'broken' all my remaining ties to the region after my real estate sale closes before the end of next month. And, as I have already posted in general terms in another thread, there is nothing to be accomplished by my continuing to make so-called 'Luddite' arguments ... since nothing can / will change in regard to US economic policy for the next 2-4 years. My intent in this thread was to merely provide some straight-up information in regard to Actions prompting Reactions ... as well as to provide some potential 'food for thought' for Dollar Den readers who may be considering some realignment of their own investments in the wake of this week's Action, or who may be trying to make near future personal financial decisions.

    As the result of this week's Action, the 'non-Luddites' subscribing to your own economic ideology now 'OWN' the US economy. And this is particularly the case in regard to your California situation, where a 'super majority' of 'non-Luddites' will soon have a totally free hand to enact whatever economic changes they choose. In another 2-4 years it should become crystal clear how well things actually turn out.

    In the meantime, I will be watching from 'way south of the border', booking profits from my investments ( with gold already up 3% in 3 days, which is a larger gain than non-Luddite FED interest rates would have paid on a CD in 3 years ), and posting new material in Dollar Den far less often.
    Last edited by Melonie; 11-10-2012 at 07:53 AM.

  10. #8
    Veteran Member
    Joined
    Oct 2009
    Posts
    493
    Thanks
    32
    Thanked 211 Times in 137 Posts

    Default Re: early weekend commentary - Actions and Reactions

    ^^^You're wrong again, with a lot more people paying their own money for health coverage and many private sector businesses providing those services a lot of the growth in these areas will indeed be self-funding. There will be many thousands and thousands of new businesses getting involved in this new dynamic and that will necessitate countless demand for office/retail space, computers, communications equipment, office supplies, office administrators, clerks, accountant, lawyer and on and on. As early detection and preventative medicine become the norm, people will be much more healthy and active and thus more likely to more productive with their work and more likely to participate in the economy at a higher level.

    Mel, after reading this post from you:
    Quote Originally Posted by Melonie View Post
    "Sorry for not posting for the past couple of days. I've actually been travelling back to the US on short notice ... in reaction to this week's 'developments'
    , I think I realized what has happened. You have kind of hijacked the entire Dollar Den and turned it into a personal blog for your ideology. You're very passionate about your beliefs and prolific in expressing them. Would it not make sense for you to create your own blog and post all of your information in that manner. Maybe they could even make a section for you on this forum, it just seems to me that you make about 85% of the posts in this section and about 90% of them aren't really relevant to the stated purpose of Dollar Den and are also more of your predictions based on ideology as opposed to facts.
    Last edited by jimboe7373; 11-10-2012 at 11:22 AM.

  11. The Following 2 Users Say Thank You to jimboe7373 For This Useful Post:


  12. #9
    God/dess
    Joined
    Sep 2006
    Posts
    7,964
    Thanks
    6,155
    Thanked 10,183 Times in 4,602 Posts

    Default Re: early weekend commentary - Actions and Reactions

    Melonie,

    This is a bit off topic, but is there any talk in the ex-pat community about this?

    http://www.mercurynews.com/business/...e-murder-probe

  13. #10
    Banned Melonie's Avatar
    Joined
    Jul 2002
    Location
    way south of the border
    Posts
    25,932
    Thanks
    612
    Thanked 10,563 Times in 4,646 Posts
    Blog Entries
    3
    My Mood
    Cynical

    Default Re: early weekend commentary - Actions and Reactions

    ^^^ purely based on scuttlebut heard from some acquaintances who live near that area, this is a 'frame-up' attempt by the drug runners ... who are unhappy with all of the financial and material support McAfee had been providing to local law enforcement.

    I have also heard a different opinion, which points out that the extremely 'coincidental' timing versus the US election, the huge amount of US mainstream news coverage that McAfee has received, and the abrupt change of attitudes by local politicians and cops from their usual ( well paid ) 'pliability' to total intractibility, may be part of behind the scenes efforts by the US gov't. The supposed intent of those efforts would be to 'send a message' to any uber-rich Americans who are now hastily considering the possibility of becoming ex-pats.
    Last edited by Melonie; 11-14-2012 at 05:31 AM.

Similar Threads

  1. (early) weekend commentary - Huh, No Inflation ?
    By Melonie in forum Dollar Den
    Replies: 0
    Last Post: 08-05-2010, 12:01 PM
  2. (early) weekend financial commentary ...
    By Melonie in forum Dollar Den
    Replies: 1
    Last Post: 10-10-2008, 01:53 AM
  3. Replies: 8
    Last Post: 03-21-2008, 05:34 AM
  4. Replies: 0
    Last Post: 06-08-2007, 04:01 PM
  5. weekend commentary - Central Bank Actions
    By Melonie in forum Dollar Den
    Replies: 0
    Last Post: 12-02-2005, 03:16 PM

Bookmarks

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •