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The billionaire party cools down

It hasn’t been a great year for the 0.00001%. The fortunes of Russian oligarchs have been frozen; crypto fortunes have been destroyed; and five billionaires — Bernard Arnault, Elon Musk, Mark Zuckerberg, Jeff Bezos, and Changpeng Zhao — have each lost more than $50 billion this year alone.

Why it matters: Even the most chipper tycoon might feel a pang of humility upon seeing an 11 (or 12)-figure sum evaporate from his personal balance sheet.

What we’re watching: In good times, billionaires enter into a friendly (or not-so-friendly) competition over who can have the biggest and most expensive toys: yachts, castles, art, islands, jets, that kind of thing. But during times like these, such competition is replaced by a desire to preserve wealth, rather than spend it.

A $410 million Roman villa with an original Caravaggio ceiling goes unsold.A Warhol that art dealer Richard Polsky suggested might sell for $500 million instead sells for less than $200 million.

Even the richest man in the world can start to feel constrained, after his wealth has fallen by an astonishing $124 billion since early November.

Musk has a legally binding obligation to buy Twitter for $44 billion, but the markets don’t believe it’s going to happen, with the price of Twitter stock implying a probability of only about 65% that the deal will go through at full price. (I went into the full details of the math involved here.)It’s not going to be easy for Musk to find the cash he needs to put down to buy Twitter — and he can’t just walk away while paying a $1 billion break-up fee, either. Twitter’s board would file suit, asking a court to require him to pay the agreed-upon $44 billion, and a judge would almost certainly side with them.That explains Musk’s attempt to find co-investors in the deal. He clearly wants to lighten his personal financial burden, even if that means borrowing money at 14% interest or making an implicit promise to take Twitter public again.

The bottom line: The U.S. economy is still running hot — but the markets aren’t. Those of us who work for a living are broadly fine. Those who don’t need to, on the other hand, are feeling a bit of a pinch.