Sunday, January 22, 2017

The Plutonomy Symposium — Rising Tides Lifting Yachts

I'm nothing compared to's Abner Doon when it comes to finance but if the following documents from CitiGroup are real then here is proof from 2005 that CitiGroup and possibly others knew the financial meltdown and housing crisis that came in 2007 and 2008 was on its way soon:

The report is encouraging investors to invest in plutonomy stocks-- companies that cater to the richest of the rich.

Here's an interesting quote from Page 30 of the first link:

"If like us, you believe that attempts by the UK, U.S., and Australian authorities to cool
the housing market is likely to work, and you believe, like us, that equities are likely to
perform well in coming years, this is a good time to switch out of stocks that sell to the
masses and back to the plutonomy basket."

Also from Page 30:

"This has of course, from a portfolio perspective, been a costly trade to run-with, over the last 10 years. Those “crazy American consumers” seem to be in rude health.  Their imminent demise has been a long time imminent."

And from Page 6 of the second link CityGroup admits there is a Housing Crisis in the making before it happened while explaining to their investors how to get around it:

"The “disaster waiting to happen scenario” we hear about most from our clients, is the low savings rates in countries such as the UK and US. Well, we disagree that this is such a big problem in the near term, the time horizon that matters for most equity investors. As we showed in our note on Plutonomy back in October, using data from a paper written by two (then) Fed economists, the low savings rate in the US (and we believe the same holds true in the other plutonomy countries like the UK, Canada and Australia) is a function of the savings habits of the richest 20%. Figure 5 shows the savings rates split down by income quintile in the US. The richest quintile are primarily to blame for the overall fall in the savings rate in recent years – although there low savings behavior has likely been joined in the past few years by the housing-pumped non-plutonomist US consumer."

They even went so far as to blame our then coming, economic meltdown on the "richest quintile" and credit Fed economists as the source of their information.

What did they fear? It wasn't a housing crisis. Oh no, from Page 7 of the 3rd link:

"What could go wrong? 

    Globalization, productivity, a rising profit share and dis-inflation have helped
plutonomy. Beyond war, inflation, the end of the technology/productivity wave
and/or financial collapse, which have killed previous plutonomies, we think the
most potent and short-term threat would be societies demanding a more
‘equitable’ share of wealth."

That's right, the only thing they feared was the working class rising up against them and 'too big to fail banks'. And the working class uprising never happened. America's working class allowed the righest 1% to keep us devided all those years while they got richer and richer at your expence while they made fun of you with statements like,

"The Plutonomy Symposium — Rising Tides Lifting Yachts"

And folks, please share.