Elon Musk, the eccentric boss of Tesla or SpaceX, has fully benefited financially from the pandemic.
As he railed on Twitter against social distancing measures, he quadrupled his fortune, which grew by $ 76 billion to $ 103 billion.
If he is the billionaire who got rich the most between April and June, he is far from the only one.
The fortunes of the ultra-rich rose 27.5% to $ 10,200 billion, Swiss bank UBS and consultancy firm PwC found in their 2020 billionaire report, released on Wednesday (October 7).
A record level of fortune for the 2,000 billionaires studied by the authors of the report which provides a striking contrast with the millions of individuals who have lost their jobs due to the health crisis or the million French who have fallen into poverty during this period.
The Kings of Tech
Like the boss of Tesla, it is the heads of companies in the tech sector who have made the most money in recent months, the report's authors point out.
If UBS and PwC avoid naming names, just look at Bloomberg's Billionaires Index to see that Jeff Bezos (Amazon), Mark Zuckerberg (Facebook), Jack Ma (Alibaba) or Steve Ballmer (ex-CEO of Microsoft) are the big winners at the moment.
And these 2.0 ship captains didn't get that rich by selling more.
This great leap forward in billionaire fortunes comes mainly from the financial markets, the report said.
On the one hand, the tech moguls have taken advantage of the profound changes that the health crisis and the lockdown have brought about in consumption and work habits.
The success of video conferencing apps, like Zoom, and online shopping platforms like Amazon, have convinced investors to bet on anything that shines technologically.
“Tech stocks were the first to rebound on the stock market, and they gained much more than the others, which accentuated their lead,” confirms Alexandre Baradez, head of economic analyzes for the financial consulting firm IG, contacted by France 24. And since these CEOs often own shares in their companies, they have benefited greatly from this tech rush.
Actions, what else?
On the other hand, “the financial markets have, as in every crisis, contributed to widening inequalities”, underlines Alexandre Baradez.
At the start of the pandemic, the stock markets took the hit, recording drops of around 20%, which represented “an opportunity for investors”, notes the financial analyst.
But to buy at the bottom of the wave - in the midst of a crisis -, you have to be strong enough to take the risk of registering losses while the stock market regains color.
In other words, only the richest could afford to invest heavily in the midst of a financial storm.
When the stock market conditions started to improve from April, these billionaires profited more than the others.
“You have to admit that they have the guts to go,” Josef Stadler, head of UBS Global Family Office, the department that manages relationships with wealthy clients, told the Guardian.
Bravery ?
Certainly, but there is also what Alexandre Baradez calls the effect… “Tina”, in other words “There is no alternative” (there is no alternative).
These super-rich have wallets that need to be invested in order to make money… but where?
Government bonds, that is to say sovereign debt, bring in very little because central banks issue them in turn at very low rates, in order to raise money to finance stimulus plans.
Real estate is not very attractive either during this crisis “because buyers are increasingly looking to buy outside large urban centers to find air,” recalls the analyst from IG.
City centers, where luxury real estate is found, which is the investment par excellence for large fortunes, is therefore not popular at the moment.
“So there are still actions”, concludes Alexandre Baradez.
Backfire?
In times of crisis, investments in equities - generally considered to be more risky - prove almost automatically to be very lucrative for those who have the means to play the game. “The structure of the mechanisms for safeguarding the economy and stimulating activity in times of crisis favors large companies ”, summarizes Alexandre Baradez.
The public authorities will seek to save above all the banks and the large groups which employ the most people or whose economic weight is the most important.
The financial markets know this, which means that when the central banks set in motion their policy of safeguarding the economy, it is the actions of these large groups that rise the fastest.
And ordinary people cannot afford to take advantage of this windfall because even at the bottom of the wave, the share prices of these large groups remain expensive.
This trend is only increasing in favor of the richest: since the 2008 crisis, “the holding of the number of shares by the wealthiest households has only increased”, points out Alexandre Baradez. .
This amplifying effect of the inequalities of the stock market during crises does the business of billionaires to a certain extent.
“There is a real risk that this accumulation of wealth at such a sensitive time will push some parts of the population to the limit,” admits Josef Stadler, the banker of UBS.
Today, the idea of a backlash - social, regulatory - against the richest seems quite possible.
But beyond a hypothetical popular revolt against the ultrariches, this unprecedented increase in the fortune of billionaires is above all a democratic problem, Judge Alexandre Baradez.
For him, this trend “pushes the electorate more and more into the arms of extremes”.
And the fact that the UBS and PwC report notes that only one in ten billionaires have publicly pledged a share of their fortune to support efforts to save the economy is certainly not going to improve their image. eyes of opinion.
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