CITIGROUP PLUTONOMY MEMO PDF

Ajay Kapur, global strategist at Citigroup, and his research team came up with the term “Plutonomy” in to describe a country that is defined. The full report is available here MarPlutonomy-Report-Leaked-Citigroup-Memo-Part1. Maybe I’m the last person who’s hearing about the Citigroup “plutonomy memos”, but they’re blowning me away. Wait, now that I look around.

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The World is dividing into two blocs — the Plutonomy and the rest.

Continental Europe ex-Italy and Japan are in the egalitarian bloc. In plutonomies the rich absorb a disproportionate chunk of the economy and have a massive impact on reported aggregate numbers like savings rates, plutonmy account deficits, consumption levels, etc. We project that the plutonomies the U. There are rich consumers, few in number, but disproportionate in the gigantic slice of income and consumption they take.

To continue with the U.

Plutonomics – The Wealth Report – WSJ

Often these wealth waves involve great complexity. The Managerial Aristocracy, like in the Gilded Age, the Roaring Twenties, and the thriving nineties, needs to commandeer a vast chunk of that rising profit share, either through capital income, or simply paying itself a lot. We have cirigroup heard the lament. Almost all the smart folks we know — our investors, our colleagues, our friends in academia, politicians believe in some variant of these two stories. To summarize so far, plutonomies see the rich absorb a disproportionate chunk of the economy, their decision to lower their savings rate, often corresponding to plutonommy asset booms that often accompany plutonomy, has a massive negative impact on reported aggregate numbers like savings rates, current account deficits, consumption levels, etc.

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They do not worry us much. They are attracted by the plutojomy that facilitated the re-emergence of plutonomies in the U. This further inflates the asset markets in these plutonomies, enabling the rich there citigdoup lower their savings rates further, and worsening their current account balances further.

At the heart of plutonomy, is income inequality.

Corporate tax rates could rise, choking off returns to the private sector, and personal taxation rates could rise — dividend, plutomomy, and inheritance tax rises would hurt the plutonomy.

Indeed, in the U. Here, we believe lies a cornerstone of the current wave of plutonomy, and with it, the potential for capitalists around the world to profit.

The wave of globalization that the world is currently surfing, is clearly to the benefit of global capitalists, as we have highlighted. But it is also to the disadvantage of developed market labor, especially at the lower end of the food-chain. A third threat comes plutohomy the potential social backlash.

To use Rawls-ian analysis, the invisible hand stops working.

Plutonomy and the Precariat

Perhaps one reason that societies allow plutonomy, is because enough of the electorate believe they have a chance of becoming a Plutoparticipant. Why kill it off, if citigriup can join it? But if voters feel they cannot participate, they are more likely to divide up the wealth pie, rather than aspire to being truly rich. Could the plutonomies die because the dream is dead, because enough of society does not believe they can participate?

The answer is of plutomomy yes. But we suspect this citigrouup a threat more clearly felt during recessions, and periods of falling wealth, than when average citizens feel that they are better off. There are signs around the world that society is unhappy with plutonomy — judging by how tight electoral races are.

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Citigroup’s Plutonomy Memo: “There are rich consumers, and there are the rest” – Elpidio Valdes

But as yet, there seems little political fight being born out on this battleground. Our overall conclusion is that a backlash against plutonomy is probable at some point.

However, that point is not now. So long as economies continue to grow, and enough of the electorates feel that they are benefiting and getting rich in absolute terms, even if they are less well off in relative terms, there is little memoo to Plutonomy in the U. Surely, then, it is the collapse of plutonomy, rather than the collapse of the U.

In other words, we are plutojomy unnecessarily about global imbalances. You are commenting using your WordPress.

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There are rich consumers, and there are the rest.

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Citigroup’s Plutonomy Memo: “There are rich consumers, and there are the rest”

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