Panic gripped the world’s financial markets this week, with Wall Street posting its worst day since the October 1987 stock crash on Thursday.
And while there was a spectacular rebound on Friday, tens of billions of dollars in market capitalization evaporated.
“We went down after having risen extremely for the last ten years. It is brutal but it must be said that the Stock Exchange took three steps forward and one backward”, summarizes Gregori Volokhine, from Meeschaert Financial Services.
These are the big losers of the stock market debacle:
– The richest
Billionaires, whose fortunes are invested in the stock markets, especially the companies they run or are major shareholders in, are the biggest losers.
Jeff Bezos, the world’s richest man, saw his fortune sink from $ 117 billion to $ 109 billion, or $ 8 billion in seven days, according to real-time figures from Forbes magazine.
The fortune of Bill Gates, the co-founder of Microsoft, went from 108.2 billion to 103 billion in one week.
Frenchman Bernard Arnault, LVMH CEO, lost 14 billion euros to his share, falling to 84.6 billion.
Businessman Warren Buffett was especially hit by the fall of the airlines, in which his group Berkshire Hathaway is a major shareholder. His fortune went from 81.6 billion to 76.3 billion.
Mark Zuckerberg, who completes the top 5, saw his fortune lose $ 9.2 billion to $ 62 billion, following the Facebook crash.
Those losses are only virtual because the big fortunes did not sell their shares and they will be able to recover the money if the markets recover.
– The retired –
Panic in the markets pushed large numbers of investors to take refuge in assets considered safe, such as debt securities, especially US Treasury bonds.
This stampede caused the yields on these securities to drop, which affected traditional life insurance and variable annuity life insurance contracts, in which the amount invested in the subscription evolves according to the results of the Stock Market until retirement. of the insured.
The 30-year Treasury bill rate, the one with the longest maturity, was 1.5% on Friday.
– Small savers –
51.9% of Americans own shares, directly or through funds, according to the latest Federal Reserve survey.
Those assets are frequently within 401 (k) retirement plans.
Individual investors will no doubt see their virtual “fortune” dramatically decrease, threatening to influence their consumer behavior. Consumption is the engine of the American economy.
“They are no longer going to buy the latest iPhone model they were planning to buy, and that is where the impact will be lasting,” says Volokhine.
– Pension funds –
Their losses are also virtual because they do not sell their securities and invest in the long term.
Their assets invested in stocks suffered enormously and those in debt receive less because the yields on the securities fell.
There is a third of the assets whose performance is unknown: the money invested in investment funds. To have a clear idea, we will have to wait for the end of the first quarter, when the funds publish their results.
– Entertainment –
Although many companies will post a one-time deficit, that is not the case for the movie, theater, cruise, travel, and restaurant industries, which will not be able to offset unearned revenue.
Disney is therefore a big loser.
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