Katrina economic impact limited because of the wealthy

[Yo_Mama_Been_Loggin]

Is this guy a trickle down moron or what?

The short view: The U.S. plutonomy
Citigroup strategist argues Katrina economic impact limited


Not everyone believes that high oil prices, or the aftermath of Hurricane Katrina, will have a significant impact on the U.S. economy.

Ajay Kapur, global strategist at Citigroup, says the U.S. is a "plutonomy;" an economy powered by the wealthy. Whilst the average consumer devotes 7.8 percent of their total expenditure to energy-related products, high-earners devote just 6 percent. "They account for the bulk of consumption and are relatively unscathed by high oil prices," Kapur says.

Kapur also argues that the main reason that past oil prices have been associated with recessions has been the response of the monetary authorities. "The key for equity investors is to closely track leading indicators of core inflation to anticipate the likely monetary response. So far they are not worrisome," he says.

http://www.msnbc.msn.com/id/9259123/

[scarletwoman]

1. The lords in their manors are secure - might get a bit dicey for the

peasants, of course, but that's hardly a matter for concern...

[bemildred]

2. This guy is a moron.

The idea that oil prices will not affect the economy is
so Alice-in-Wonderlandy you just don't know where to start.
But he obviously is well-paid to spout this drivel.

[JDPriestly]

3. Economists have no clue at this point.

That's what I understand from this article. They are whistling in the dark, grasping at straws about what will happen next. The impact of higher energy prices due to Katrina is only one of a number of factors that could affect the economy in the next year or so. This article is basically just a space filler.