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Here Is Citi "Explaining" In 2006 Why Soaring Oil Prices Don't Impact Consumption
When it comes to propaganda and "boosting confidence" few things are as powerful as the "narrative' or rather, how it changes on what now appears a daily basis. And in a market dominated by algos which have a 15 millisecond memory, nobody cares if the narrative from 3 days ago, or 3 months, or 3 years is diametrically opposite from that today.
Case in point: we previously revealed Goldman's "analysis" of the commodities market from July 28, 2014, which is summarized as follows:
- The long-awaited global recovery appears to be getting on track, lifting commodity demand
Since then, commodities have cratered across the board, not just crude, but most other prices as well including iron ore, copper, nat gas, steel and so on, in what is clearly a reflection of the rapid global slow down, one which has so far managed to see the US "decouple" from the rest of the world.
To be sure, Goldman's late summer spin is nothing new. Here is the USA Today from December 31, 2013 "explaining" rising oil prices with an "improving US economy and greater demand for gasoline."
But nothing crushes the "it's good for the US consumer" narrative quite as well as the counternarrative that had emerged in the mid-2000s when, unlike today, crude just couldn't stop rising with every passing day.
Because if plunging oil prices are so great for the consumer, surging oil should have been very, very bad, right? Wrong.
Here is precisely how the narrative was framed on March 5, 2006 by Citi's Ajay Kapur:
Oil and the Consumer.
We have heard constantly that oil will slow consumption down as it eats into disposable income. But it remains a conundrum to many that consumption has remained robust, despite oil prices remaining high. What’s going on? We don’t see a conundrum. As we wrote about in September (The Global Investigator, Is Oil Relevant for Equities, September 2 2005), in the plutonomy countries, the rich are such a massive part of the economy, that their relative insensitivity to rising oil prices makes US$60 oil something of an irrelevance. For the poorest in society, high gas and petrol prices are a problem. But while they are many in number, they are few in spending power, and their economic influence is just not important enough to offset the economic confidence, well-being and spending of the rich.
So there you have it: rising oil was indeed bad. But it was only bad for the "poorest in society", those whose economic influence is "just not important enough" to offset what the plutocrats are doing.
And, logically, if soaring oil prices were irrelevant for US consumption a decade ago because to the wealthiest 0.01% oil at $50 or $150 simply does not matter, so the inverse must also be true. Of course, one will never hear that, because when it comes to propaganda and "confidence building", all is fair. Especially when dealing with algos who can't remember what happened more than 15 milliseconds ago, let alone 15 days or 15 months...
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I sure wish I was rich enough to not give a fuck about what anything cost.
In other words, "fuck the poor [and the soon to be poor middle class]!"
Forward (over the cliff)!
Here's me explaining Citibank's explanation - "assholes".
Fuck you very much.
Actually Citibank's explanation is more along the lines of "shit we're long oil and late to the party the other BB's are at, so buy our long positions so we can short this overbought shitshow".
Want to make money in the market-casino? Fade the government-controlled big-bank 'research' departments.
You got it back-asswards. The big banks control the government, not the other way around. How can you make such a bad blunder?
He or she is new?
OIL prices are finding some temporary support but the bottom is a long way down and a long way off...
http://www.globaldeflationnews.com/oil-light-sweet-crudeelliott-wave-upd...
I fought the fed and the fed won. But there is a really good book on amazon about deflation.....
Citi says We don't need your money anymore BITCHEZ
Which is good because I don't need your Banker scum money any more either. And quit sending me credit card offers every three days
Robin Williams was still with us back in 2006.
Michael J Fox could still sign his name back in 2006.
Jon Corzine wasn't in prison
Citibank, Citigroup is saying that all markets are fixed, so don't worry about it.
- But they just repealed part of Dodd-Frank, and put in Follow-On Legislation to allow Bail-Ins from Depositor Bank Accounts in the USA
So Close your Citi Credit Card, Close your Citigroup Bank Accounts... you know just to be sure /s And Pass it On.
Any Financial Manager that doesn't think more
- Dot Com Crashes
- Savings & Loan Crisis
- Enron Crisis
- Bernie Madoff Crisis
- Subprime Crisis
- 2008-2010 Global Financial Crisis
Can happen again... has his Dick Hangin' Out.
spread the pain among billions of people ..... wait for the results
in other more colorful words, fuck em and the laughable middle class
+10,000
Fuck all these bankster assholes and their brainwashed minions.
Talk about torture!
Andy Hall was backed by Citigroup back then.
Spinmeisters.
They don't like things that reduce Executive Pay...i.e. revenue.
http://dealbook.nytimes.com/2014/12/09/wall-street-seeks-to-tuck-dodd-fr...
The bill that Citigroup helped draft: This bill would repeal one of the more contentious provisions in Dodd Frank, a requirement that banks “push out” some derivatives trading into separate units that are not backed by the government’s deposit insurance fund. The proponents of the push-out rule argued that it would isolate risky trading from parts of a bank eligible for a government bailout.
Pretty much the argument used to create CITIGROUP. Less risk in the conglomerate of financial services and better pricing for the consumer. WHAT A MASSIVE LIE.
They all suck, so obviously CITI SUCKS.
There was a chart up last week or the week before on ZH showing volume of oil contracts and oil price.
This has clearly been manipulation, FUCK THE POOR for decades.
Now it is the DESTABILIZE PUTIN GAME.
If you are not SICK OF THIS WORLD PUPPET SHOW by now and are ready to DEMAND CHANGE you never, ever will be.
lower oil price good for the "poorest in society" and bad for rich
Fuck you CITI
That's why they hire economists to write these things.
If they just hired aspiring fiction writers it might not have that synthetic gravitas that real genuine certified economists bring to the table.
Break up citibank and the rest of the 10 largest.
And let's start talking about debt repudiation, and nationalizing {before abolishing} the Fed.
And while it's not popular with the ZH crowd - we should be taxing institutional financial transactions at some low rate.
Increase capital gains rate to par with income tax.
make SS, if we must have it, progressive, taxed after the first 40k or so only..
And a wealth tax on the Buffets and Gates types - fuck it, I'm for it. I could give a fuck about capitalist orthodoxy - the system has been fucking workers and useful, productive labor, for th ebenefit of wall street and banks for decades. More.
And if it sounds leftist, its because sounding leftist is what makes the most sense, now, for the real economy.
Bitches.
The Brown–Kaufman amendment (or the SAFE Banking Act)[1] was a failed 2010 amendment proposed in the United States Senate to be part of the Dodd–Frank bill by Democratic Senators Sherrod Brown (OH) and Ted Kaufman (DE). It sought to address the moral hazard of too big to fail by breaking up the largest banks with limits on the size of financial institutions.[2][3] The Christian Science Monitor said the amendment was based on the idea that "too big to fail is too big to exist."[4] The New York Times called it a liberal initiative with pure "populist appeal".[3]
When the Global Sh#t Hits The Fan, You'd Better Have a Plan
http://newamerica-now.blogspot.com/2014/02/beyond-collapse.html
Citibunk.
Place should have been shut down in 2008, turned into free health clinics.
Ergo, the wealth effect doesn’t work either, because, only the already rich are gaining wealth and they have already bought every GD thing they can possibly imagine for themselves.
I'll tell you where they really screwed up. People paying high gas prices decided they didn't need to drive so much and now that gas is cheap they STILL don't. You clowns fucked yourselves more than you know. Too bad you can't run iphones and video games on gas. People have learned to stay in touch and buy shit from home.
Whew!
I just about pulled the trigger on ditching my gasoline powered money printing machine for one of those "greener" natural gas jobs last month.
Glad I waited.
Sincerely,
Your Local Neighborhood Douchebanker
https://www.youtube.com/watch?v=3qcMjKxt-dE
53rd & 3rd still turning tricks. The location of Citi used be know as a notorious hangout for males looking to turn tricks to feed their drug habit. Nothing changed since 1970s. They just now wear suits.
Rule no 1 do not spend time om broker talk.
for fuck's sake - the link between demand, supply, and oil pricing is quasi-chaotic. The price has been manipulated and jerked around for so long I suppose people are blind to it.
There's even less of a coherent link between those prices and other consumption.
However, CITI surely did not get their Congress critters to write, unbelievably, another taxpayer back stop to their derivatives trades for no reason. Presuming they are able to maintain below cost pricing for months to target Russia and Iran, Citi and others are going to lose money - the question is how much.
Backing it up by having the gov [taxpayers] insuring inchoate losses on derivatives {why... in the fuck ... should taxpayers do so - Congress is guilty of treason - again} merely means, in practice, more printing and more debt issuance - all great for the same banks and the Fed owned by them - they are making out on both ends, again.
Of course, for Krugman and the rest of the astrologers of econonomy - the Potemkin Economy of the stock market, soaring to new highs as there are few people left able and willing to borrow - means the same kind of "trickle down" economics they used to pretend to object to when it was within the taxation schema,
So not soaking the rich was bad, and could never help the economy [the truth is contingent - it could go either way] but when fucking Snapshat is valued at 10 billion, for allowing teens to send each other dick pics, somehow this is an improvement to the real economy.
Meanwhile the gap between the middle class and the top pick-a-percent keeps growing, even as the middle class is asked to subsidize more and more future debt and present government beneficiaries.
Cute.
There are two ways to fuck up a functioning free market. Well, probably more than two, but these are the two biggies.
#1 Charge financial institutions a "small fee", courtesy of your local douchebag government, for every transaction made through said fanancial institution, which essentially all gets passed on to the guy at the bottom rung of the ladder anyway.
#2 Make the general public "responsible" for bailing out financial institutions that make irresponsible investments in get-rick-quick schemes.
I know, it seems so obvious, but even on ZH, I still see a lot of people calling for the end to one of these, but not both. We need to end both. Make it a truly "free" market. Wanna open a bank but you're only 13 yrs old? Hey, no problem, but just understand one thing.......... It's your risk, your reward and noone elses. Same goes with the customer. You should probably ask around first before handing over your hard earned cash to a 13 yr old with a double breasted Italian suit and a cigar hanging out of his mouth, but if that's what you wanna do, be my guest. There should be no rules in place stopping you from doing this. Just don't come bitching to me if it all goes to hell.
In case you didn’t know, the critters are herding fish with sonar and fishing regulation, backfilling with replication. That should work out well. Go Navy.
All it would take to disrupt communications is an old boy scout radio telegraph.
The more they print to sustain the dc illusion of control, the more gravity you have to fell. Peer pressure generates income inequality, until threshold, surprise.
Look around. How many people do you see capable of doing anything other than efficiently discharge natural resources, on the wrong side of the curve?
You might want to learn something about motor generators. The planet is not as stupid as commonly assumed.
“the evidence shows that real wages are more likely to increase during periods of deflation than periods of monetary inflation …The high-tech boom sucked in all the liquidity at the expense of other sectors of the economy. …But the rise is not equal. Many lose and some gain.”...like rocket science…
The working poor have to go to work. Half the people in my county commute 30 miles or more to another county. If the price of gas doubles they still make more money driving to their good paying jobs.