Rebate Checks in the Mail by Spring

http://biz.yahoo.com/ap/080213/economy_stimulus.html

Wednesday February 13, 3:57 pm ET By Jeannine Aversa, AP Economics Writer
Tax Rebate Checks Will Be in the Mail by Spring; Bush Signs Economy-Rescue Bill
WASHINGTON (AP) -- The checks aren't in the mail, but they will be soon.
President Bush signed legislation Wednesday to rush rebates ranging from $300 to $1,200 to millions of people, the centerpiece of government efforts to brace the wobbly economy. First, though, you must file your 2007 tax return.
More than 130 million people are expected to get the rebates, starting around May. Congress, Bush, the Federal Reserve and Wall Street are hoping the money will burn such a hole in people's pockets that they won't be able to resist spending it. And the spending is supposed to give an energizing jolt to a national economy that is in danger of toppling into a recession if it hasn't already.
Whether people actually spend the money remains to be seen. A recent Associated Press-Ipos poll indicates most people have other plans. Forty-five percent said they planned to pay off bills, while 32 percent said they would save or invest it. Only 19 percent said they would spend their rebates.
The measure Bush signed -- a $168 billion rescue package passed with lightning speed by Congress last week -- includes not only rebates for individuals but also tax breaks for businesses to spur investment in new plants and equipment. That, too, would help bolster U.S. economic activity. The package also contains provisions aimed at helping struggling homeowners clobbered by the housing collapse and the credit crunch refinance into more affordable mortgages.
The emergency plan marked a rare moment of cooperation among political rivals fearful that an ailing economy during an election year would invite voter retaliation.
Bush, who called the measure "a booster shot for our economy," praised the bipartisan cooperation. "We have come together on a single mission -- and that is to put the people's interests first," he said.
Who gets a rebate? Most people who pay taxes or earn at least $3,000, including through Social Security or veterans' disability benefits. Singles making more than $75,000 and couples with income topping $150,000, however, will get smaller checks, up to the top limits for any rebate: incomes of $87,000 for individuals and $174,000 for couples.
To get any rebate, you must file a 2007 tax return and have a valid Social Security number. If you already filed your 2007 return, the IRS says you don't need to do anything extra.
Most taxpayers will receive a check of up to $600 for individuals and $1,200 for couples, with an additional $300 for each child.
People earning too little to pay taxes but at least $3,000 -- including elderly people whose only income is from Social Security and veterans who live on disability payments -- will get $300 if single, or $600 if a couple.
The IRS will send out rebates -- by mail or by direct deposit into your bank account -- through the late spring and the summer. The rebates come in addition to any regular tax refund.
To pay for the rebates -- which are estimated to cost about $117 billion over the next two years -- the government will have to borrow more money, enlarging the budget deficit.
The Bush administration and some private economists are hopeful the rebates, tax breaks and aggressive interest rate reductions by the Federal Reserve will help the country narrowly dodge a recession. An increasing number of economists, however, believe the country has already fallen into its first recession since 2001, and they are simply hopeful the rescue package will limit the damage. Most people -- 61 percent -- say the economy is now in a recession, according to the AP-Ipsos poll.
"I do think this will give the economy a shot of adrenaline," said Stuart Hoffman, chief economist at PNC Financial Services Group.
The National Bureau of Economic Research, a private research organization, looked at what people did with their 2001 rebates. The study found that "households spent about 20 to 40 percent of their rebates on nondurable goods" -- which can include things like food and clothing -- in the first three months. They spent roughly another third in the following three months.
With the current stimulus, the economy will log growth in the range of 2.25 percent to 2.50 percent in the second half of this year -- roughly one full percentage point higher than without the bracing tonic, Hoffman estimated. That would be closer to a more normal rate of around 3 percent, he said.
That in turn should encourage businesses to step up hiring. Nervous employers cut 17,000 jobs in January, the first nationwide loss of jobs in more than four years.
Edward Lazear, chairman of the White House Council of Economic Advisers, predicted, "The stimulus will have the effect of increasing jobs by about half a million above the number that would have been the case in the absence of that."
Still, even with the rescue efforts, some analysts fear the economy could backslide and flirt with recession again in 2009.
To help the severely depressed housing market, the stimulus package would raise temporarily to $729,750 the limit on Federal Housing Administration loans and also raise the cap on loans that mortgage giants Fannie Mae and Freddie Mac can buy.
Raising those limits, should provide relief in the market for "jumbo" mortgages -- those exceeding $417,000. The credit crunch hit that market hard, making it very difficult, if not impossible, for people to get those loans. That has plunged the housing market even deeper into turmoil.
House Speaker Nancy Pelosi of California said the provisions will provide "families a second chance at the American dream of homeownership by helping them refinance their mortgages and avoid foreclosure."

The ultimate money laundering instrument

Source: www.world-check.com, Feb. 14, 2008

(http://www.world-check.com/articles/2008/02/14/i-examine-ultimate-money-laundering-instrument/)

I am holding in my hands a copy of what must be the largest-denomination bearer instrument in circulation today: a Global Promissory Note, in the amount of US$ 102,770,208.22, issued by Ministry of Finance of the Bolivarian Republic of Venezuela on 19 March, 2003, and signed by the then-Minister of Finance, Tobias Nobrega Suarez. It is but one of five such notes, totalling over a half a billion dollars in value, issued in bearer form by Venezuela. How did I came into possession of such a confidential instrument? Read on.

The note, the original that is, was seized by Venezuelan law enforcement officials during a lawful search of the residence of one of the country's leading pro-government bankers. It was extracted from a safe in the banker's home. The officers who found it included one who decided that he could no longer accept the officially-sanctioned corruption that has run rampant in the country, and he made the document available to me as primary evidence that money laundering of criminal profits is totally out of control.

I have carefully examined the note, and it recites the appropriate governmental legal authorisations for its issuance, clearly identifies the signer, and validates that he is acting in his representative ministerial capacityLet us look at this instrument, which matured on 18 March, 2007, bearing interest at the rate of 5%:

Such a note in bearer form is instantly negotiable, without any audit trail, meaning that it could be hand-carried to an offshore financial centre, and its global movement totally undetected.

Who on earth has $100m in cash or cash equivalent, to purchase and sell this note, other than criminal elements of the highest order?

If this was a bank-to-bank instrument, or a conventional financing arrangement, it would never be in bearer form, due to the risk of unauthorised sale, loss or destruction, hypothecation, or any number of untoward events that the maker, a sovereign state, would not want to see.

How did this $100m bearer obligation of the state end up in the personal vault of a prominent banker? if it was purchased by a financial institution, it would not, in the ordinary course of business, ever be permitted to leave the bank's premises, for any purpose .

Obviously, the banker had an illegal purpose in mind for this "Global Note," but who was the prospective customer? The Colombian Cartels?

Perhaps we see the instrument at the very end of the money laundering cycle, after its has transited the globe, and will be presented for redemption at the Central Bank, a payor totally above suspicion.

Perhaps someone should ask Tobias Nobrega about these notes. Just whom did he give them to, and why? And where did the half a billion dollars go?