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Flashback: Citigroup Plutonomy Memos

Flashback: Citigroup Plutonomy Memos

October 6th, 2011I was pretty sure that I'd posted these long ago, but I'm not finding them in my archives. In short: The rich are getting richer, so Citi advised buying a basket of stocks of companies that cater to very wealthy people.
Via: Monkeyfister:
…the rich are the dominant source of income, wealth and demand in plutonomy countries such as the UK, US, Canada and Australia, countries that have an economically liberal approach to wealth creation. We believe that the actions of the rich and the proportion of rich people in an economy helps explain many of the nasty conundrums and fears that have vexed our equity clients recently, such as global imbalances or why high oil prices haven't destroyed consumer demand. Plutonomy, we think explains these problems away, and tells us not to worry about them. If we shouldn't worry, the risk premia on equity markets may be too high.
Secondly, we believe that the rich are going to keep getting richer in coming years, as capitalists (the rich) get an even bigger share of GDP as a result, principally, of globalization. We expect the global pool of labor in developing economies to keep wage inflation in check, and profit margins rising good for the wealth of capitalists, relatively bad for developed market unskilled/outsource-able labor. This bodes well for companies selling to or servicing the rich. We expect our Plutonomy basket of stocks which has performed well relative to the S&P 500 index over the last 20 years to continue performing well in future.
Research Credit: skippy the bush kangaroo
Posted in Dictatorship, Economy, Elite
"Where is the intersection between the world's deep hunger and your deep gladness?"

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