“Funny money is getting funnier and funnier. Our challenge is to figure out who’s the butt of the joke.”
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“A California DA says the single mother of six facing prosecution for selling 32 ounces of homemade ceviche is ‘making more of this than it is.’ Mariza Ruelas, 37, made headlines Monday when she claimed to be facing a year in jail for a Facebook-based hobby. Ruelas and five others were busted when San Joaquin County investigators posed as members of the suspects’ Facebook group, where they traded recipes and sometimes sold dishes to each other. One undercover investigator asked to buy some of Ruelas’ homemade ceviche, and she was promptly charged with operating a food facility and business without a license.”
http://www.newser.com/story/233821/mom-facing-ceviche-related-jail-time-is-overreacting-da.html
“When the European Central Bank introduced a negative interest rate on lenders’ deposits two years ago, few thought things would ever go this far. This week, a German cooperative savings bank in the Bavarian village of Gmund am Tegernsee — population 5,767 — said it’ll start charging retail customers to hold their cash. From September, for savings in excess of 100,000 euros (US$111,710), the community’s Raiffeisen bank will take back 0.4 per cent. Introducing the sub-zero policy in June 2014 with a cut to the deposit rate to minus 0.1 per cent, ECB President Mario Draghi said the move was ‘for the banks, not for the people.'”
“The family’s nightmare started in May 2013, when eight armed IRS agents descended on the bakery and began asking questions about a series of under-$10,000 cash deposits (the bakery was a cash-only business). The agents informed the Vocaturas they had seized the bakery’s entire bank account. When IJ met the Vocaturas, they had almost given up hope. Federal prosecutors and the IRS had been hounding the family for years, first seizing over $68,000 and then threatening the Vocaturas with additional forfeitures and time in prison—all because of how they deposited money in the bank.”
http://ij.org/ll/august-2016-volume-25-issue-4/ij-bakes-fresh-forfeiture-victory-connecticut/
“The reason anyone would buy negative-yielding debt is actually pretty simple: Because they have to. They are central bankers looking to help promote economic growth. They are insurance companies, pension funds and money managers who have to match liabilities with assets. They are not, by and large, retail investors who are so afraid of risk that they’re willing to pay for the privilege of lending money to a government. Together, those buyers have helped build a nearly $12 trillion funnel of negative-yielding sovereign debt — unprecedented in world history. But what awaits on the other side is adding to the worries of investing professionals.”
http://www.cnbc.com/2016/07/11/negative-rates-leading-to-day-of-reckoning-fear-on-wall-street.html
“The country’s highest court ruled that the ECB’s 2012 bond-buying plan called Outright Monetary Transactions (OMT) is legal under the German constitution. OMT – though never actually used – was part of ECB’s President Mario Draghi’s landmark promise to do ‘whatever it takes’ to save the battered euro at the height of the crisis in 2012. The promise of OMT was that the ECB could, if necessary, buy up unlimited amounts of government bonds from debt-stricken countries that had pledged reforms such as Italy, Spain and Portugal. Critics charged that the ECB is essentially printing money and lavishing it on states, leaving taxpayers with the risk of one day having to foot the bill.”
https://www.enca.com/money/german-court-rules-in-favour-of-ecb-crisis-fighting-tool
“What’s quite unfortunate, in my view, is that the strong realized past returns of the past 25 years are now actually being taken as a justification of current, unrealistically high pension return assumptions. This, in turn, encourages continued underfunding. This inclination appears to be wholly encouraged by Federal Reserve policies, and threatens to amplify an inevitable pension crisis in the coming years. The realized past returns of this period have been strong precisely because they have robbed from future expected returns. The tide will turn, as it always has in complete market cycles across history, and as investors discovered during the market collapses of 2000-2002 and 2007-2009.”
http://www.hussmanfunds.com/wmc/wmc160523.htm
“The Social Security Trust Fund just suffered its first annual decline since Congress shored up the retirement program in 1983. The unexpected $3 billion decline is an indication of the precarious state of Social Security’s finances. Since 2010, the program has been paying out more in benefits than it gets in tax revenue, but the trust fund, which earns about $95 billion a year in interest, had kept growing, though a little less each year. Social Security’s cash shortfall is expected to rapidly escalate from $74 billion a year to $361 billion in 2025 alone, the Congressional Budget Office projects. Under current policies, the CBO says the trust fund will be gone by 2029.”
http://www.investors.com/social-security-trust-fund-ends-32-year-streak/
“The approved budget makes 5.7 billion euros ($6.2 billion) in spending cuts and gathers 2 billion euros in higher taxes. The cuts include 1.8 billion euros from pensions and 500 million from defense. There have been strikes by public and private workers over the austerity and restructuring reforms sought by the EU as part of the financial bailout aimed at keeping Greece in the eurozone. Greece’s debt is forecast to grow to 327.6 billion euros or 188 percent of gross domestic product (GDP) from 180% in 2015. Tsipras, who came to power in January promising to defend Greeks from EU-imposed cuts and was then re-elected in September, described the budget’s passage as a ‘difficult exercise.'”
“Denmark’s biggest mortgage bank says there’s a ‘real risk’ Copenhagen is heading into a property bubble. Property prices in Copenhagen have risen 40-60 percent since the middle of 2012, when the central bank first resorted to negative interest rates to defend the krone’s peg to the euro. The benchmark deposit rate has been minus 0.75 percent since February as Denmark’s currency war intensified, and most analysts surveyed by Bloomberg see negative rates lasting at least through 2017. The Danish regulator this month warned Danske Bank against pursuing a growth strategy in Sweden as the housing market there shows signs of imbalances.”