World’s Billionaires Have Lost $1.5 Trillion

Bill Gates and Jeff Bezos alone have lost $15 billion in net worth since January.

In a strange coincidence, the $1.5 Trillion the Fed pumped into the market precisely matches the amount the world’s wealthiest have lost almost overnight.

The Sydney Morning Herald (“‘People right now are afraid’: World’s richest take a $1.5 trillion hit“):

The world’s 500 richest people collectively lost $US331 billion ($528 billion) on Thursday, the biggest one-day drop in the eight-year history of the Bloomberg Billionaires Index. That pushed the group’s year-to-date losses to $US950 billion ($1.5 trillion).

This week’s collapse marks the end of a decade of soaring markets and cheap money that helped the planet’s wealthiest people amass a record $US6.1 trillion less than two months ago. Those gains were obliterated over the past four days as pandemic fears and plunging oil prices sent markets into a nosedive.

Since the first of the year the world’s richest have lost 16 per cent of their collective net worth, according to the index. The market meltdown has slammed billionaires from every part of the globe and every industry.

[…]

Oklahoma fracking mogul Harold Hamm dropped off the index Monday after losing almost half his net worth, squeezed by the tumbling price of oil. Sheldon Adelson, majority owner of Las Vegas Sands., the world’s largest casino operator, has lost $US11.7 billion since the start of the year as gaming floors emptied and trade shows were cancelled. That’s more than a quarter of his net worth.

Carnival Chairman Micky Arison dropped six spots on the billionaires index Thursday after shares of the world’s biggest cruise operator plunged 31 per cent to a 23-year low. The company announced it was suspending all voyages by its Princess Cruises line for two months.

Individuals higher up the ranks sustained staggering one-day losses. Luxury titan Bernard Arnault, chairman of LVMH, lost $US9.5 billion and Amazon’s Jeff Bezos’s net worth fell by $US8.1 billion. Tech titan Bill Gates saw his fortune dwindle by $US7 billion. A total of 53 billionaires saw their fortunes drop to the lowest since joining the index.

Brazil’s fortunes were particularly hard hit, both by plunging stock prices and a weakening real. Guilherme Benchimol, founder of XP, ceased to be a billionaire after shares of the Sao Paulo-based brokerage fell 34 per cent below its December initial public offering price.

Meanwhile, Russia’s wealthiest two dozen people are down $US65 billion this year, partly because of President Vladimir Putin’s oil price war with Saudi Arabia.

Obviously, no one is going to shed a tear for the mega-rich, let alone Russian plutocrats. Obviously, they can absorb losses far easier than minimum wage service workers whose jobs are disappearing as a result of the crisis.

Still, it’s a vivid metric of just how massive the economic meltdown has been. And it’s going to get a whole lot worse before it gets better.

FILED UNDER: *FEATURED, Economics and Business
James Joyner
About James Joyner
James Joyner is a Security Studies professor at Marine Corps University's Command and Staff College and a nonresident senior fellow at the Scowcroft Center for Strategy and Security at the Atlantic Council. He's a former Army officer and Desert Storm vet. Views expressed here are his own. Follow James on Twitter @DrJJoyner.

Comments

  1. Jay L Gischer says:

    There’s a loss of revenue, and that’s tough for Carnival, Las Vegas and oil sellers. That potential revenue is gone forever, even if your business gets back to normal a year from now. Maybe not as tough as it is for a minimum wage worker, but it some cases, it could mean bankruptcy for some firms, and that means more loss of work.

    Then there’s a loss of asset value which is all good and proper, but is likely to regain most if not all of its losses in a year or so. It’s a problem if you are leveraged, but otherwise, this is a buying opportunity. I doubt Jeff Bezos is worried. This is probably overall good for Amazon.

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  2. James Joyner says:

    @Jay L Gischer: Yes, very important distinction.

    I’m guessing the cruise industry goes under permanently after this.

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  3. Kathy says:

    Just wait until the GOP and the Moron in Chief decided they need tax breaks, tax cuts, loans, loan guarantees, less regulation, and more, to make it up, because, after all, they’ll create jobs.

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  4. gVOR08 says:

    Obviously, no one is going to shed a tear for the mega-rich, let alone Russian plutocrats.

    Obviously. Except for the lobbyists and pols who are paid to worry about them.

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  5. gVOR08 says:

    @Kathy: Pelosi thought she had negotiated a sensible relief bill with Mnuchin. Now the GOPs are reneging. They say it’s full of D priorities, like helping the people affected, and thereby helping the economy. The Rs say Trump isn’t on board. Trump won’t be on board unless there’ a payroll tax rollback or something else FOX can label the Trump Tax Rebate. Trump only cares about pasting together the economy long enough to buy reelection.

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  6. de stijl says:

    If a D President, Keynesian stimulus is akin to socialism.

    If a R President Keynesian stimulus is prudent market priming.

    The only variable is who owns the big chair.

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  7. Jay L Gischer says:

    @gVOR08: You know, that’s why you try to negotiate with someone who you think has the authority to carry out negotiations on behalf of their side. Or put another way, Trump and/or McConnell just cut the legs off of Mnuchin. I’m sure he feels great about that.

    I mean, is there any book on leadership/governance that says this is a good thing to do?

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  8. DrDaveT says:

    Obviously, they can absorb losses far easier than minimum wage service workers whose jobs are disappearing as a result of the crisis.

    Even that phrasing understates the difference. For Bill Gates, there is nothing to absorb — the money he has lost has essentially zero marginal utility to him. The wealthiest men in the world have lost nothing but some bragging rights.

    Conversely, hundreds of thousands of Americans near retirement age just lost the ability to retire this year, or next year. That’s tangible.

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  9. gVOR08 says:

    @Jay L Gischer: Trump refuses to talk to Pelosi because he’s a wuss. McConnell is trying to lay low. Neither feels any duty to do what’s needed. What are the Ds to do? Looks like Pelosi’s going to pass the bill without GOP votes and hope shame. or public pressure, will move the GOPs.

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  10. de stijl says:

    @DrDaveT:

    To a person who was depending on public events, shows, tournaments for income, this situation has a massive effect. A waitress, the guy who moves frozen chicken wings from loading dock to freezer.

    To Bill Gates, he loses bragging rights in the annual Forbes round-up of rich folks. Like I could give one fuck.

    Joyner softened the headline later in his text, but the choice and framing is inherent in and to the headline.

    Rich folk matter more. Poor folk get an acknowledgment.

    Marginal impact essentially ignored.

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  11. Tyrell says:

    How about Warren Buffet? He knows how to make huge amounts in these kind of situations.

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  12. senyordave says:

    Market up over 9%, most of it in last hour.

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  13. de stijl says:

    @Tyrell:

    Learn to read the room.

    We are not in a praising of capitalism mood right now. It is failing us and everyone sees.

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  14. 95 South says:

    @de stijl: Do all comments have to agree?

    And what’s the problem with capitalism right now? The market is correctly valuing the decline in expected value.

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  15. Jay L Gischer says:

    @95 South: My feeling is that the market is clearly not correctly valuing the decline in expected value. I think that because nobody really knows how bad this is going to be, and there is nothing particularly oracular about the market, which produces a consensus. This is good enough most of the time, but it is very bad at dealing with uncertainty.

    As for Warren Buffet, yes, he is good at making money in a crisis. He ain’t doing so well at the moment: https://www.fool.com/investing/2020/03/10/monday-may-have-been-warren-buffetts-worst-day-eve.aspx

    But that’s my point. He’ll be ok, because of asset value, and because he can keep his head, keep some ready cash, and look for opportunities.

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  16. James Joyner says:

    @DrDaveT:

    For Bill Gates, there is nothing to absorb — the money he has lost has essentially zero marginal utility to him. The wealthiest men in the world have lost nothing but some bragging rights.

    It impacts their foundations, etc. but, absolutely, it has essentially no impact on their day-to-day living.

    Conversely, hundreds of thousands of Americans near retirement age just lost the ability to retire this year, or next year. That’s tangible.

    If they’re about to retire, they really should have moved most of their assets to loss volatile investments by now. (Although, oddly, bonds are currently in sync with the stock market, which almost never happens.) But, sure, it’s a big blow. I’m 54 and plan to work for quite a few more years, so most of my money is in the market. Since I don’t plan to take it out for 10-15 years, it’s a paper loss.

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  17. James Joyner says:

    @de stijl:

    Joyner softened the headline later in his text, but the choice and framing is inherent in and to the headline.

    Rich folk matter more. Poor folk get an acknowledgment.

    This post is one that would have been a Quick Take in the old layout. It’s pointing to an interesting factoid with a couple lines of commentary.

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  18. Stormy Dragon says:

    @James Joyner:

    I’m guessing the cruise industry goes under permanently after this.

    The current companies may disappear, but I doubt the industry will.

    Two years from now, the boats will still exist and someone will own them, and there’s not many alternate uses for them.

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  19. wr says:

    @Tyrell: “How about Warren Buffet?”

    Yes, when people are dying around the world, my main concern is whether or not Warren Buffet can still brag that he has more zeroes than anyone else. Glad we’re focused on the serious issues.

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  20. de stijl says:

    @James Joyner:

    You go with the first response. Cool with that.

    Mine is different than yours. Difference in interpretation and framing.

    You sorta have to cop to the capital forward headlines. It is abundantly there.

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  21. de stijl says:

    @Stormy Dragon:

    Hospital ships and quarantine ships were a real thing in the not too distant past.

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  22. Jay L Gischer says:

    @wr: You know, I’m pretty sure it’s not my primary concern, and yet I commented.

    I think Tyrell’s comment was completely acceptable and on-topic in this thread.

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  23. de stijl says:

    Knowing what we know, it would not occur to me to lead with rich people’s problems. That would be 37th on the list.

    Stark difference in interpretation.

    Is it a story? Yes.

    Not the story I would lead with.

    His joint, though.

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  24. gVOR08 says:

    @gVOR08: Looks like Pelosi got a deal. House to vote yet today and Senate next week. Claim Trump’s on board. Sounds like some compromises, but no Trump Tax Refund payroll tax fwckery.

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  25. Stormy Dragon says:

    @de stijl:

    Hospital ships and quarantine ships were a real thing in the not too distant past.

    Yeah, and just last month we found out how badly it goes when you try to use a cruise ship as a quarantine facility.

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  26. Stormy Dragon says:

    @gVOR08:

    Or not, as Trump is pulling his usual “I’ve changed my mind” crap after both sides agreed to the deal.

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  27. de stijl says:

    @Stormy Dragon:

    Well played.

    Mostly breeding grounds, but it was an attempt to isolate and quarantine.

    Dude help us if doctors and nurses succumb. Or the overflow gets overwhelmed.

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  28. DeD says:

    @gVOR08:

    Not to be too OT, but a couple friends of mine are floating what I can only call “fake news” a story that GOP rejected emergency bill because Pelosi inserted a $1 billion request for abortion funding. I can’t find one legit source for this. I’m giving serious consideration to distancing myself from them: they continually vote for policies that cause people real harm.

    I know people have philosophical, ideological, and cultural differences on social policies. I just can’t get past their unwavering and I reasoned support of Donald Trump.

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  29. Kurtz says:

    @DrDaveT:

    Even that phrasing understates the difference. For Bill Gates, there is nothing to absorb — the money he has lost has essentially zero marginal utility to him. The wealthiest men in the world have lost nothing but some bragging rights.

    This is exactly the problem–not billionaires, per se–but the notion that a handful of people can lose close to a trillion in US Dollars and have zero strain on their daily lives. Collective net worth of the bottom 50% of Americans? $1.67 trillion in Q3 2019.

    @95 South:

    And what’s the problem with capitalism right now? The market is correctly valuing the decline in expected value.

    That assumes that assumptions of economics are correct. That assumes that currency has a precisely measurable value. It assumes that the EV is correct. The EV assumes that the risk analysis is correct. So it goes…

    Economics is a vital thing to study. Unfortunately, when applied, it often seems to be turtles all the way down.

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  30. Kurtz says:

    @Jay L Gischer:

    But that’s my point. He’ll be ok, because of asset value, and because he can keep his head, keep some ready cash, and look for opportunities.

    Isn’t this a hidden moral hazard though? At some point of wealth accumulation, negative risk is, as a practical matter, non-existent.

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  31. gVOR08 says:

    That story’s out there. Looks like it’s pure GOP BS, but I see RW sites pushing it, long on outrage and short on facts.

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  32. gVOR08 says:

    On a happier note, under-reported story of the day is that new cases in China are down from thousands per day to single digits. Similar in South Korea.

    We should be on a similar curve. OK, they jumped on it, tested massively and enforced isolation and social distance, the stuff we’re doing haltingly and piecemeal. But it looks like the virus is beatable.

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  33. DeD says:

    @DeD:

    That would be *unreasoned.

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  34. grumpy realist says:

    @gVOR08: The doctors are now suggesting to use plasma from recovered patients to provide extra support for acute sufferers and health workers on the front line. They estimate that use of such plasma-with-antibodies could cut recovery times by 2-3 days per person.

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  35. Teve says:

    @DeD: I don’t know if America can survive this nonsense.

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  36. de stijl says:

    @Teve:

    Sure we can survive this.

    We are more than able. Even if we fluff it all super badly, it will be 150 M infected at roughly 3.2% fatality rate. That is current worst case.

    A lot of people will die.

    We are at the point where wishing is moot. Containment did not work. It got here and is spreading here.

    We can bend the curve substantially by testing, and quarantining the infected, rely on our neighbors to behave responsibly.

    The problem today is that we cannot test everyone who should be tested. We do not know infection amounts or rates. This is outside of our control. We can and should kvetch and question and punish, but the cow is already out of the barn.

    The states seem to be acting rationally.

    Most events which could be infection vectors have already been cancelled. Unless you only watch Fox News you know it is a big deal, and most Fox News wathchers can read between the lines too, and know this is not bullshit.

    Once we can test people properly the reported infection amounts will spike. Everyone will freak the fuck out at the numbers.

    It will burn out. China’s numbers prove that.

    Having a nincompoop as President, and Senate majority of nincompoop enablers does not help, but it will burn out.

    If local health care systems cannot manage overflow, things will get very ugly.

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  37. de stijl says:

    The amount of available hospital beds is based on baseline occupancy rates in a neutral environment. They operate at 75 – 80% filled beds as a whole. Local numbers vary quite widely.

    If the number of people who require hospitalization rises above available hospital bed capacity, we are talking planned overflow contingency planning.

    If the number of patients exceeds the hospital + overflow process, the system breaks. Not enough folks. This assumes care givers do not also get infected.

    There are overflow of overflow plans that exist on paper some of which may work irl.

    We might need to find out.

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  38. de stijl says:

    @DeD:

    Entirely up to you when and if to break a longstanding bond.

    If people push b.s. they know to be false, run away quick as you can. No fooling. Run away now.

    If people believe b.s that is false, pick the path that suits you best. Engage. Be cognizant of bias arguments. Basically all on you. Sorry, man. As lost as you if not more.

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  39. de stijl says:

    @de stijl:
    @DeD:

    I tried to reconnect and create a relationship that had failed decades earlier.

    My parent chose to tell me she disliked me because our politics differed after months of passive aggressive provocation.

    If it feels bad, walk away.

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  40. DeD says:

    @de stijl:

    Yeah, I hear you. This exercise has been going on long before Trump. I just wonder what neurological mapping causes us to believe bullshyt …

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  41. Michael Reynolds says:

    @gVOR08:
    What reason to we have to believe Chinese numbers? Is this the WHO talking, or Xi, who started by lying and imprisoning anyone who spoke the truth?

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  42. DrDaveT says:

    @Kurtz:

    Collective net worth of the bottom 50% of Americans? $1.67 trillion in Q3 2019.

    Can you cite me a source for that? I would have estimated the aggregate worth of the bottom half at somewhere around $0. I swear I read somewhere recently that the median was negative, with most people being in debt. Was that exclusive of real estate or something?

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  43. Just nutha ignint cracker says:

    @James Joyner: I’m not sure that the cruise industry will go under. But ships the size of 25 story Las Vegas resort hotels may not be a thing anymore.

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  44. Just nutha ignint cracker says:

    @Tyrell: @de stijl: Yeah, it’s telling that one of the comments is that someone who for most of his life has made a living being an economic predator (first move was to dissolve Hathaway clothing company so that he could use the proceeds to spend his life gambling in the stock market) is going to do okay because of this.

    Says a fair amount about values systems. Eh?

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  45. Just nutha ignint cracker says:

    @James Joyner:

    It impacts their foundations, etc.

    I’m not even sure how much that’s true. The Gates fortune has been growing for the past decade or so in spite of the quantities of largess of the foundations. This period will slow the growth of his wealth, but that’s really all, I think.

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  46. 95 South says:

    @Just nutha ignint cracker:

    Yeah, it’s telling that one of the comments is…

    This isn’t the first article about the coronavirus, though, or even the first article about the stock market and the virus. It isn’t even James’s first article about the stock market and the virus that day. It’s his first one about billionaires, and so there’s a comment about Buffett. But sure, it tells you alot about someone’s value system when they make a comment about Warren Buffett in a thread about billionaires and the stock market’s response to the virus.

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  47. Kurtz says:

    @DrDaveT:

    I thought so too. But, no. The median is 68k.

    I don’t have time to look further into this, but i was surprised by the numbers.

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  48. DrDaveT says:

    @Kurtz:

    I thought so too. But, no. The median is 68k.

    Thanks for the link.

    I’ve found it frustratingly difficult to drill down to the methodologies the Fed uses to do these calculations. The fraction of net worth held by the bottom 50% seems to fluctuate rather more than I would have expected. It bottomed out at 0.3% in 2011 ($221B total), and has climbed back up to 1.6% since then. By comparison, it was 4.2% as recently as 1996. I’m probably remembering having looked into this around 2010.

    Of course, having a year or two of salary as your net worth ain’t much, and it’s even less when compared against a time when defined-benefit pensions were common.

    Also note that the bottom 50% hold 5.9% of the assets, but only 1.6% of the net worth. That says a lot about debt.

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  49. Kurtz says:

    @DrDaveT:

    Also note that the bottom 50% hold 5.9% of the assets, but only 1.6% of the net worth. That says a lot about debt.

    You and I are in agreement on this.

    And yeah, I’m a little suspicious of the Fed analysis here.

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  50. Blue Galangal says:

    @de stijl: Some of you might recall my father disowned my and my two kids because we voted for HRC. He forebade us the house, whole nine yards. This is the guy, btw, who raised us listening to Arlo Guthrie and thought that abortion was a woman’s choice until ~2006, Fox News, and a BlAH Man got elected. He and my mom railed against SOSHALISM and LIBTARDS even though he had had ongoing medical issues since 2013 that cost about $500,000 (covered by Medicare and Medicaid) and my mom has preexisting conditions that would preclude her coverage on the private market. They paid into Medicare (well, he did), don’t you see, and we’ll just ignore that Medicaid because we all know it’s for white people, amirite?

    We didn’t speak until last May (they missed their oldest granddaughter’s college graduation because, hey, she voted for HRC), when he was diagnosed with lung cancer. I started going with them to chemo and helping with the aftercare of chemo, and we stayed off politics completely. In the fall he was diagnosed with a second kind of cancer in his liver. We lost him at the end of February. His chemo alone for the liver cancer was $60,000/month.

    But SOSHALISM BAD!!! Capitalism good!

    My mom, with the aforementioned longstanding preexisting conditions, including immune and cardiac, now widowed and with a 30 year mortgage she can’t afford, is still bemoaning the fact that she can’t buy her own insurance on the private market and she’s at “the mercy” of Medicare.

    My friends want to know if I regret not speaking to my dad for 2.5 years. You know what? No. Every time I had to listen to him spout a racist Fox News talking point that was one more blow to the father I remembered who raised me. We had a good fall together talking about our lives; he knew the chances weren’t good. At his wake, my sister in law said that the only good thing about death is we get to choose how we remember them. I have a lot less to forget now than I otherwise would have.

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