June 14, 2013

Why is Carlos Slim the world's richest man?

Bill Gates and Carlos Slim
Recently, there's been much discussion about all the advantages of being able to check up on other people's phone calls, such as being able to use telephone metadata to blackmail politicians cheating on their spouses, or get early hints of mergers and acquisitions.

Perhaps that line of thought can help illuminate a conundrum about the contemporary world. As we all know, to prevent Mexicans from immigrating to the United States is virtually a crime against humanity, since Mexico is so utterly impoverished. But, as we also know, on and off over much of the last half-dozen years, the richest man in the world has been a Mexican national, Carlos Slim (currently ranked #1 in the world by Forbes with $73 billion).

Besides Slim's near monopoly within Mexico, he sets extraordinarily high rates on calls between America and Mexico, giving him vast profits off illegal immigrants.

You might think that would be a pretty interesting paradox to explore, but Slim owns, at last report, 8.1% of the agenda-setting New York Timesso there's not much media interest in discussing Slim's fortune in relation to immigration from Mexico. Not surprisingly, both Slim and the New York Times favor amnesty and increased immigration for Slim to exploit. And why would you want to know more than that?

But while Slim can make a lot of money off over-charging poor illegal immigrants, there might be other ways to profit off dominating telecom within Mexico, such as keeping an eye out on what Mexico's rich and powerful are up to.

To paraphrase Mel Brooks, it's good to be the monopolist, but perhaps -- just speculating irresponsibly here -- it's extra-good to be the telecom monopolist who keep the records on who calls whom.

It's kind of like how the America's 7th richest man and mayor of America's largest city charges customer $2,000 a month for terminals that he lets his reporters spy on them with. You might almost think that letting extremely smart and money hungry guys have electronic access to your secrets wasn't a good idea. Then again, if you are a smart and money hungry guy, it might pay almost as well to have people think you have access to their secrets.

23 comments:

Anonymous said...

The sum total of Project Snowden is this: Opt out, remove your sanction, step from the inside to the outside. How?

If you are member of the Democratic Party, quit. If you are a member of the Republican Party, quit. It is that simple. Once you do, tell your family and friends what you did — and why. Ask that they consider doing the same — join Project Snowden. Reject the status quo.

And then what? That is up to you. Project Snowden takes no position beyond stepping outside the failed Red-Blue duopoly right now.

The journey of a 1000 possibilities starts with one step.

http://projectsnowden.tumblr.com/

jody said...

gates overtook slim in may and became the richest man in the world again. he's about 5 billion up on slim currently.

http://www.bloomberg.com/billionaires/

one of the reasons is QE from the federal reserve, bumping up the fortunes of anybody who owns american traded stocks. (runaway inflation, but it's inflation of stock prices, so i guess it's the "good" kind).

but also remember there is a private investment company with over 20 employees who's sole client is gates. so he has an entire small business for the express purpose of managing his money. it's so successful, most years it makes more money than gates is able to give away in charity.

as for slim, i've posted before about how i've never heard one single time in my life the words "Mexico would be better if it eliminated monopolies and allowed competition" come out of an economist's mouth. a principle taken as absolute sacrament in the US becomes a totally unknown concept when the topic turns to mexico. not only is mexico's economy almost completely closed to foreign competitors, it is closed to domestic competition in several industries including oil.

the epic lawsuit, united states versus AT&T, finally settled in 1982 and resulting in the obliteration of bell, didn't happen and doesn't exist, in an economist's brain. standard oil company of new jersey versus united states, settled in 1911, is so far back it might as well be in the land of fables and fairy tales, from a time when the US did not even have a federal income tax.

which clearly must just be legends and lies from incorrect history books. LOL. what bed time stories. the US government has always taken 30% of every man's paycheck. our modern cultural marxists tell us so.

Dave Pinsen said...

"If you are member of the Democratic Party, quit. If you are a member of the Republican Party, quit. It is that simple. Once you do, tell your family and friends what you did — and why. Ask that they consider doing the same — join Project Snowden. Reject the status quo.

And then what? That is up to you. Project Snowden takes no position beyond stepping outside the failed Red-Blue duopoly right now.

The journey of a 1000 possibilities starts with one step."


IOW, do what ~50% of American adults already do and don't vote. Apathy isn't a recipe for political change.

Snowden didn't just "opt out". He leaked secret government info, and became a cause célèbre. If you aren't an insider like he was, you have nothing to leak. So pulling a Snowden isn't an option for you.

Think a little harder about this.

Rob said...

Kind of OT, but this juicy rumour is the sort of thing a telecommunications tycoon might be in a position to confirm, to his advantage.

Dave Pinsen said...

"one of the reasons is QE from the federal reserve, bumping up the fortunes of anybody who owns american traded stocks. (runaway inflation, but it's inflation of stock prices, so i guess it's the "good" kind).

but also remember there is a private investment company with over 20 employees who's sole client is gates. so he has an entire small business for the express purpose of managing his money. it's so successful, most years it makes more money than gates is able to give away in charity."


Slim's company is actually up much more than Microsoft over the last year. Here's a chart comparing the two. According to Yahoo, Gates currently owns about $13.6 billion in MSFT stock, but maybe his family office (as the sort of investment company you mentioned is usually called) owns additional shares. Forbes probably has to guess at the values of whatever alternative/non-publicly traded investments it owns (venture capital, etc.). Same with Slim, who probably has his own family office as well.

Uncle Peregrine said...

http://www.youtube.com/watch?v=uxz1Us52JTE

Anonymous said...

Carlos Slim is of Christian Lebanese descedant, a Phoenician. In Brazil, they're very powerful the current mayor of São Paulo is a guy with the surname Haddad.

The CEO of Renault-Nissan is another Phoenician-Brazilian Carlos Ghosn.

Anonymous said...

You know Slim is not the richest person in the world. I am sure Taki knows people who will quietly laugh after hearing that 'news', although he will probably not share the list with you or us.

Slim is simply showing off his member to the world. I can bet that his American educated scions will behave more privately.

Anonymous said...

Affirmative voting.

Anonymous said...

Why does Bill Gates need to look like a cast-off from the Muppet Show in every photo opportunity?

Anonymous said...

one of the reasons is QE from the federal reserve, bumping up the fortunes of anybody who owns american traded stocks. (runaway inflation, but it's inflation of stock prices, so i guess it's the "good" kind).

Bingo. And these fortunes will be hammered when the stock market collapses (which it will again - given how stretched the market has become).

Actually, if you added up the fortunes of the two Koch brothers, they would already be the richest "person" on earth (Charles runs the business all by himself and David just takes half the spoils - so they are really like one person rather than two). The two brothers are currently worth $87.4 billion or something ridiculous like that. If US oil production keeps ramping up the way it has been, their refineries will keep printing money so that they may individually overtake both Gates and Slim.

When Obama came to power in 2009, The Kochs were together worth $21 Billion.

Anonymous said...

Boy, the Lebanese sure have been busy in Mexico! Check out this list at wikipedia:

http://en.wikipedia.org/wiki/List_of_Lebanese_people_in_Mexico

In business and politics:

a) obviously the big guy, Carlos Slim Helú.

b) Slim's son-in-law Arturo Elías Ayub is a Director with monopoly Telmex. Arturo's brother Alfredo was head of CFE, the country's power monopoly, up 'til 2011. Ayub is Arabic for the prophet Job.

c) Jesús Murillo Karam is Mexico's current Attorney General.

d) Kamel Nacif Borge, is a businessman/gambler/shady character, connected to the highest levels of MX society. Just read the Wiki post! He allegedly used strings to protect the next fellow,

d) Jean Succar Kuri, who can only be described as a rich Arab run amok in Mexico, currently serving a 112 year prison sentence for child prostitution and child pornography.

No doubt they're high achieving Mexicans. They seem to fit in well in the corrupt, monopolistic world found in Mexico and many Latin American and Middle Eastern countries.

e) on a happier note, Lebanese-Mexicans have two of the three Academy Award acting nominations for Mexico in the last half century: Salma Hayek (2002) and Demián Bichir (2012)

Anonymous said...

Two old rich white guys. One is a racial minority in his country, and the other will be so too, in a few decades.

Anonymous said...

informacion highway robber

Anonymous said...

Because he's a Lebanese Maronite--the descendant of Phoenecian traders--surrounded by 100 million mestizo peasants. Easy marks.

Anonymous said...

Why is Carlos Slim the world's richest man?

Because he created the most value?

Anonymous said...

Two old STEM students. Study engineering and math, there's a lesson there somewhere. Carlos Slim:

"He went on to study civil engineering at the National Autonomous University of Mexico, while simultaneously teaching algebra and linear programming there."

Anonymous said...

only 16 comments..
btw, wouldn't that also help explain why Gates was one of the world's richest men? imagine the back doors that a closed system like windows could leave in it.

Considering how corrupt our elite are - i would not be surprised to find quite of few of these 'hedge fund' managers having some sort of before market data access.

Quibbit said...

Doesn't it look like Bill just shoved a finger up Slim?

The Legendary Linda said...

You know Slim is not the richest person in the world. I am sure Taki knows people who will quietly laugh after hearing that 'news',

Actually Slim and Gates really are the two richest people in the world. Stop getting duped by the conspiracy theorists.

David said...

Why is Carlos Slim the world's richest man?

Because he's smarter than bill gates

ATBOTL said...

How do we know Carlos Salim really controls all that money and isn't just a front man for politicians?

Joshua Perry said...

That is only because the federal government made Gates split his company into separate pieces.Gates has donated more money in his life than most have ever made!!!!