Billionaires lose billions in financial crisis

[Pawn Power]

Billion dollar club cut from 1,125 members to 793 (http://www.guardian.co.uk/business/2009/mar/11/rich-lists-warren-buffett)


One of the world's most exclusive clubs has seen its membership drastically shrink. The number of billionaires on the planet has fallen by nearly 30% as the financial havoc wreaked by the global economic crisis stretches from skid row to the gated estates of the super-rich.


The founder of the Microsoft software empire, Bill Gates, has edged out the legendary US stockpicker Warren Buffett (http://www.guardian.co.uk/business/warrenbuffett) to reclaim top spot as the world's richest man, according to Forbes magazine's annual rich list, with the Mexican telecoms tycoon Carlos Slim in third place.


But as plunging stockmarkets, volatile commodities and banking collapses scar the business world, the number of people who can call themselves billionaires in US dollar terms has dropped from 1,125 to 793. It is the first time since 2003 that the billionaires' club has contracted.


and one part which you won't see reported in the U.S. news:


Experts said that a shrinkage at the top does not necessarily mean inequality has narrowed. Heidi Shierholz, a specialist in inequality at the Economic Policy Institute in Washington, said: "This is nothing to cheer about. It's a symptom of a huge economic crisis which is hitting everybody - it's not just happening to billionaires."


A minority of shrewd billionaires have succeeded in prospering despite the tumultuous conditions. New York's mayor, Michael Bloomberg, saw his wealth swell from $11.5bn to $16bn after buying back a portion of his financial information empire. The Hedge fund manager John Paulson prospered by betting against sub-prime mortgages.

[RebelDog]

This credit crunch gets more tragic by the day. Has a telephone line been set up so we can pledge emergency donations?

[JimmyJazz]

I was pretty fuckin' happy to hear that that douchebag Tom Friedman has plummeted from $3.6 billion to less than $25 million:

http://www.vanityfair.com/online/politics/2008/11/thomas-friedmans-world-is-flat-broke.html


btw,


Experts said that a shrinkage at the top does not necessarily mean inequality has narrowed. Heidi Shierholz, a specialist in inequality at the Economic Policy Institute in Washington, said: "This is nothing to cheer about. It's a symptom of a huge economic crisis which is hitting everybody - it's not just happening to billionaires."Isn't that the part the U.S. mainstream news is going to emphasize? :confused: Of course they'll spin it in the old trickle-down economics mold of "see, when billionaires hurt, you hurt", but they'll emphasize it nonetheless.

[Pawn Power]

Isn't that the part the U.S. mainstream news is going to emphasize? :confused: Of course they'll spin it in the old trickle-down economics mold of "see, when billionaires hurt, you hurt", but they'll emphasize it nonetheless.

What I am saying is the the US will not mention that inequality is still an issue- that there is still an immense gap between the super rich and everyone else just like before. The loss of capital by the capitalists does not indicate a contraction in general wealth disparity.

The US media probably will talk about it in away emphasizing the trickling down of wealth. However, they won't mention inequality as it always existed and as it continues to exists.

[Bitter Ashes]

So, where have thier billions gone?
Not vanished in a poof of smoke and certainly not to the working class. Most likely to either the banks or to be redistributed ammoungst the poor poor multi-millionares.

[Pawn Power]

So, where have thier billions gone?
Not vanished in a poof of smoke and certainly not to the working class. Most likely to either the banks or to be redistributed ammoungst the poor poor multi-millionares.

The thing is 'the billions' never really existed in the first place. :ohmy:

[cyu]

where have thier billions gone?
Not vanished in a poof of smoke

Actually, sometimes it does vanish in a poof of smoke.

Maynard, Karl, Ayn, and Alan each have 100 g.p. (that's gold pieces for you non-dungeons&dragons economists). Maynard and Karl put their gold in First Bank, while Ayn and Alan put their gold in National Bank.

Maynard: 100 gp
Karl: 100 gp
Ayn: 100 gp
Alan: 100 gp

First Bank can now give a 50 g.p. loan to Alan. Alan now has 150 g.p. in his bank account. When Maynard and Karl check their bank accounts, they still say 100 g.p. each.

Maynard: 100 gp
Karl: 100 gp
Ayn: 100 gp
Alan: 150 gp

National Bank now has 250 g.p. and makes a 100 g.p. loan to Maynard, who (according to his bank) now has 200 g.p. in his bank account.

Maynard: 200 gp
Karl: 100 gp
Ayn: 100 gp
Alan: 150 gp

Back and forth it goes. Money magically appears without a single paper bill being printed.

Now if everyone suddenly decides to withdraw their money at the same time, what happens? The two banks have "real" g.p. to cover the first 400 g.p. of withdrawls. After that, the banks collapse and all the "wealth" went poof.

It's not real wealth of course - what can you really do with g.p. other than trade it for what you really want, like food to eat, a place to live, energy, heat, clothing, video games, AK-47s, gas masks, printing presses, tractors, assembly lines, or whatever.

[JimmyJazz]

What I am saying is the the US will not mention that inequality is still an issue- that there is still an immense gap between the super rich and everyone else just like before. The loss of capital by the capitalists does not indicate a contraction in general wealth disparity.

I doubt that will even occur to people, since they all already know that they and their neighbors are hurting. But yeah I see what you're saying.