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Mark Zuckerberg's fortune plunges by $8-billion Add to ...

These are stories Report on Business is following Wednesday, Sept. 19, 2012.

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Zuckerberg's declining fortune
Mark Zuckerberg and other social media types have taken a big hit as their stock declines.

Mr. Zuckerberg’s net worth plunged in the latest Forbes ranking of America’s 400 wealthiest people, driven down by the poor stock debut of Facebook Inc.

Indeed, Forbes said today, the 28-year-old whiz kid took a bigger hit than the other 399 on the list, as his wealth plunged by $8.1-billion (U.S.) to $9.4-billion.

“The drop isn't likely to change the hoodie-wearing CEO's lifestyle much,” said Forbes, which ranked Mr. Zuckerberg as No. 36 on the list.

“What's less clear: whether the young executive, who married his longtime girlfriend Priscilla Chan the day after the IPO and headed off for an Italian honeymoon, can right the ship and make Facebook into a winning public company.”

Some of Mr. Zuckerberg’s social media peers also slipped.

No. 1 on the Forbes list, of course, is Bill Gates, at $66-billion, followed by Warren Buffett at $46-billion, Larry Ellison at $41-billion, and, tied at No. 4, Charles and David Koch at $31-billion.

A new currency war?
The Bank of Japan surprised markets today with a boost to its stimulus measures, following in the footsteps of the U.S. and European central banks over the past few weeks.

Japan’s central bank pumped an extra ¥10-trillion into its asset-buying program, which it extended to the end of next year, citing troubles in other economies and inside its own borders.

The move immediately knocked down the yen, raising the question of whether the world is heading back into a currency war, though it soon gained back ground.

“With concerns about a rising yen continuing to trouble Japanese policy makers and economic activity starting to slow, the Bank of Japan decided once again to try and deal with the problem of their appreciating currency, which is continuing to hurt the country’s exporters,” said senior analyst Michael Hewson of CMC Markets.

“Last week’s Fed action won’t have done the Japanese any favours, strengthening the yen further and the central bank has decided to respond early .. in order to try and mitigate the Fed’s actions, on its own currency as well as attempt to stimulate growth.”

Last week, chairman Ben Bernanke and his colleagues at the Federal Reserve unveiled a new bond-buying program, dubbed QE3 because it marked the third round of quantitative easing. The European Central Bank under chief Mario Draghi moved a week earlier.

The Fed, of course, says its programs are not aimed at weakening the U.S. dollar, though, as senior currency strategist Camilla Sutton of Bank of Nova Scotia noted, the central bank is aware that its policy is “U.S. dollar negative.”

The latest moves by the world’s big central banks – and we’ll see what comes next from the People’s Bank of China – reminds some observers of the where the world stood during the currency cold war of last fall.

"We would suggest markets have almost come full circle from the fall of 2011, when the G4 central banks announced increasingly aggressive monetary policy, unleashing a risk rally and adding fuel to the ‘currency war,'" said Ms. Sutton. "The chances of reliving this are increasing."

Indeed, it threatens a tit-for-tat of sorts.

"The likelihood of a similar pushback by emerging market economies is likely to be easing of their own or capital controls to try and stem the flow of hot money looking for yield," said Mr. Hewson.

A weaker currency helps a country’s exporters by reducing the cost of their goods in foreign markets. And a stronger currency hurts. Just look at Canada’s widening trade deficit of late, and you can see the impact the strong dollar is having.

“They say the definition of madness is repeating the same thing over and over again, expecting a different result,” Mr. Hewson said.

“Japan has had an easy monetary policy for years with no discernible improvement in the country’s economic outlook,” he added.

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