How do I rotate an arm around the end of an arm?

DarwinGS24

I have a red rectangle that rotates around a fixed point, following the mouse. (see picture)
http://i.imgur.com/Gc2L8rr.png
I want to have a blue rectangle that rotates around the end of the red one like the red does to the green square. The problem is that i can only get the blue one to rotate around the middle of the red rectangle. I've tried to use some kind of offset but i need it to be relative to the red rectangle, not relative to the whole scene.
Here are some pics of the blue rotating around the middle of the red one.
http://i.imgur.com/BdUaZFM.png
http://i.imgur.com/DppCvGV.png
http://i.imgur.com/p2O7NHv.png
http://i.imgur.com/vwm1M2u.png
Thanks for any help.

RThurman

Mr. Socks also has a handy articulating arm demo.

http://forums.gamesalad.com/discussion/comment/435962/#Comment_435962