r/technology • u/DontFearTheCreaper • 20h ago

Social Media Tech CEOs who grinned behind Trump at inauguration lose billions in wake of tariffs

https://www.independent.co.uk/news/world/americas/us-politics/trump-tariff-bezos-musk-zuckerberg-b2727147.html
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u/a-base 20h ago

Much like the 2008 housing crisis in the US, these things tend to work out very well for billionaires - at a cost to the poor, lower- and middle- class.

  • Their losses are just theoretical, it's not like they have to cash out their stocks or sell assets and take any real loss.
  • Even with these 'losses' they are still billionaires and can access cash in numerous ways. They can quite comfortably ride out any period of instability.
  • More likely than riding it out, they'll use it to their advantage. With markets crashing they are perfectly positioned to swoop in, scoop up anything they like, and make out like bandits.

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u/jfsindel 19h ago

In the movie, Big Short, I will always remember the subplot line of Steve Carrell's character: "Didn't they (companies) see this coming? Why aren't they saying or doing anything?"

The realization that he has sticks with me. "They knew all along, but didn't care. They knew they would get bailed out. They knew they would be fine."

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u/[deleted] 17h ago

The Big Short completely refutes what this guy is saying (as does any understanding of finance). "Yeah, the billionaires are losing money in the stock market, but they can then... make the money they're losing back later?"

That would make sense if the billionaires had their investments all in cash, which they obviously don't, especially tech CEOs.

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u/abcpdo 14h ago

no the point is they can freely borrow large amounts of money using their shares as collateral. their asymmetric advantage is they can pay for hundreds of analysts to figure out when its going to start turning around. or better yet go for a dinner at mar-a-lago or play around of golf.

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u/[deleted] 14h ago

Just so you know - this idea that rich people borrow money against their stock constantly as some infinite money glitch is a Reddit myth. That's not how it works.

The fact is, rich people don't like when the stock market goes down. It isn't good for them unless they bet heavily against the market just like the guys in the Big Short did, which is extremely rare.

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u/abcpdo 14h ago

what you're saying seems to be also generalizing? which rich people? and across what time span. of course the wealthy don't like to see their theoretical net-worth drop during a recession. but can you show me evidence that as a class they don't take advantage of the volatility to make smart financial moves and come out better than before afterwards? the inequality index keeps going up which suggests you are wrong. 

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u/[deleted] 13h ago

They’re making “smart financial moves” regardless of what happens because they pay firms like Goldman Sachs, JPM and MS a fuck ton of money to make sure of it. I work directly in this industry with the “rich people.”

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u/abcpdo 13h ago

would you agree that it is more important to have the ability to make "smart financial moves" during a downturn than during growth period? the rest of the populace is at even more of a relative disadvantage than usual during such times.

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u/[deleted] 13h ago

No. The wealthy people are advantaged in a bull market and a bear market. You’re essentially saying that “in a down period, billionaires don’t go as down as everyone else,” which is true, but in a growth period, they go up more than everyone else. It’s not like a growth period means you’re seeing the same returns as they are. They’re seeing even better returns.

They would rather it be a growth period. If what you’re saying was true, the wealthy people would all want the market to crash all the time lol

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u/abcpdo 12h ago

I don't have anything to back this up, but I still think ultimately the crashes still benefit the rich more. because the actual ownership of underlying assets is transferred more from the poor to the rich during a recession. The rich can gain all the paper wealth they want during a growth period, but to buy a company or a plot of land requires the owner to be willing to sell. Money is an imperfect measure of wealth because it's subject to supply and demand like everything else.