Last year the story of a lottery winner that was using food stamps made nationwide headlines. Police say that the Detroit-area woman that collected welfare despite winning $735,000 (after taxes from the $1 million win) died of a possible drug overdose. Amanda Clayton who was 25-years had pleaded no contest to fraud in June and was sentenced to nine months probation back in July. Her attorney stated that Clayton repaid roughly $5,500 in food aid and medical benefits. Overall this is a troubling story but more to the core of it all it highlights how money is unable to solve other of life’s challenges. You think of all the NFL Players that go bankrupt shortly after their career. It is sad and apparent that even winning $1 million is not enough to solve some deeper rooted problems. The challenge for many that come into sudden money is that they have little ability to manage the funds.
“(Detroit News) In her 25 short years, she not only was convicted for collecting state welfare money after winning the Michigan Lottery, she was engaged in a child custody battle, fought with neighbors, and was forced to buy a second house to escape pressure from a former boyfriend, according to a neighbor.
Sheryl Schonfeld lived across the street from the home where Clayton grew up, where her parents still live on Hanford Avenue, and said she knew her for at least 17 years.
“We moved in here around the same time, so I’ve know her since she was a little girl,” said Schonfeld. “She was a nice, pleasant girl who never got in trouble, until she won the lottery,” she said.
A person who answered a call placed to Clayton’s home Sunday, said, “No comment,” and hung up the phone.
Schonfeld, 59, said she noticed some new purchases after Clayton’s win, including a new car for her father and one for herself. She said Clayton also purchased a home nearby on Anne Avenue in Lincoln Park.”
If you were to bet on the current presidential race, you would likely put your money on President Obama. Polls are one thing. Yet when it comes to people putting their money on the line the odds are now largely in favor of the incumbent. What this does bring us at least in the short-term is more of the status quo. Depending on your political leanings this is probably good or bad. However one thing is certain, the economy is still mired in serious problems. It is naive to think that one political party or even one person can have much of an impact on a $15 trillion economic machine. Congress and each independent state government will likely have more of an impact but when it comes to the odds of an Obama victory in November the money is quickly flooding to the side of the incumbent. What is interesting is that the spike really occurred in September. Up until that point the race was fairly even at least when it came to the betting odds:
If you feel confident one way or another there is a betting market waiting for your money. One thing is certain and that is one person will be the winner come November.
The Bank of Japan is now looking down the barrel of deflation for the Japanese economy. The Japanese economy is facing troubles ahead in spite of the Bank of Japan entering multiple decades of quantitative easing. Does that come as a surprise to you? Did you really think that Ben Bernanke was coming up with something completely innovative for the US economy? The Bank of Japan after the bust of the Japanese stock market and real estate bubble essentially has faced two lost decades. Inflation has been virtually non-existent but economic growth has largely disappeared. The Bank of Japan with a rapidly aging population is facing demographic challenges ahead. Does Japan offer a blueprint for our economic future? We have different demographic changes but the actions taken by both our central banks are very similar:
BOJ monetary base (unit = ¥100mm)
Anyone that thinks QE is a recipe for growth need only look at Japan.