Ellison Tops Musk as World’s Richest Man After $101 Billion Gain

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2:09Bloomberg Audio Studios. Podcasts. Radio. News. This is Bloomberg Business Week Daily. reporting from the magazine that helps global leaders stay ahead with insight on the people, companies, and trends shaping today's complex economy. Plus, global business, finance, and tech news as it happens. The Bloomberg Business Week Daily Podcast with Carol Masser and Tim Stenevek on Bloomberg Radio. Elon Musk no longer the world's richest person. He's been bumped by Oracle's Larry Ellison. That's after the company's reported quarterly results. And now we're hearing this news. So Christine Oram, Wealth America's team leader for Bloomberg News.

2:52Thank you for joining us. So you're sitting here listening to us talk about this. And then we had earnings. So how much did Ellison's fortune soar after that? Yeah, so this has been quite the day for Oracle, as Caroline was just saying. So Ellison, earlier today when the stock was at its peak, it's paired some of those gains now. But he was up more than$100 billion. And that was the increase to his fortune, not his total fortune. That got him close to$400 billion. At one point, he was at about$394 billion, putting him in first place on the Bloomberg Billionaires Index for the first time, also putting him ahead of Elon Musk for the first time.

3:27So this is very notable. Musk has been in first place for almost a year. And of course, we had the news last week of Musk getting his$1 trillion pay package. So this may be a short-lived first place for Ellison. Musk stands to make a lot of money over the coming years that could potentially make him the first trillionaire. But for now, Larry Ellison is in first place. And looking at Tesla's stock being down over 10 percent this year. And obviously there's different dynamics where we've seen it pop and then pull back. But how does that fit in when it comes to Ellison versus what's going on with you're just talking about with Elon Musk versus also Jeff Bezos?

4:05Obviously the poster child when it comes to Amazon. Yeah, no, it's a very good question, because I think what you're seeing here is the divergence between the companies that are exposed to AI, as Caroline was just saying, and those that are struggling a little bit in that space. And of course, Musk has made a big deal about all of the inroads that Tesla is making in AI and how he wants that to be kind of like one of the main drivers of the company going forward. But so far, the market doesn't really seem to be buying that. So Tesla hasn't been performing super well. And of course, there have been a lot of other issues there around his political involvement and other things, too.

4:37that have weighed on the stock. But despite that fact, Musk had clung tenaciously to the number one spot for quite a while, just largely actually not because of Tesla, because of all of his other ventures. SpaceX, super valuable company, XAI, X formerly Twitter, all bolster his fortune. But it seems like as of right now, that isn't enough. But again, with that massive pay package that the board has promised him, If that passes muster, that could change very quickly. Before you go, quick question. So can you break down that battle back and forth for that top spot? I mean, not just Bezos, but other, you know, folks have been up at that top spot.

5:16Yeah, actually. So Ellison just surpassed Mark Zuckerberg in July. So only a couple of months ago to move into second place. Zuckerberg has fallen a little bit with Meta. Bezos and Zuckerberg have kind of been jockeying back and forth. But I think what this reflects, because, you know, earlier this year, I think Ellison was in fourth or maybe even fifth place. And how quickly he's climbed the ranks just reflects how much Oracle has been able to sort of glom onto that AI narrative, how successful it's been in selling that narrative to shareholders. And we're seeing that in the 35 % share drum today.

5:52All right, Christine, always great having you with us. Christine Orem, obviously Bloomberg News, Wealth America's team leader, joining us here in the Bloomberg Businessweek studio on Larry Ellison, surpassing Elon Musk. Stay with us. More from Bloomberg Businessweek Daily coming up after this.

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9:14This is a day after the BLS. They published a preliminary revision to annual payrolls data. Now we're getting word that the Labor Inspector General initiating a review of challenges at the BLS. On top of that, we have another legal move in the president's quest to remove Fed Governor Lisa Cook. A lot going on. We want to bring in Michael McKee, who's international economics and policy correspondent for Bloomberg TV and radio. So I want to start with Lisa Cook because there's been so much back and forth. It's hard to keep up with Michael McKee. So does this latest move, does it remove Cook from her position before a Fed decision in a week from today?

9:51Or what does it mean? No, it keeps her in that position. In the position. In the position. But the administration has filed a notice of appeal this afternoon. So they're going to go to the Circuit Court of Appeals in D.C. We don't know the speed with which they are going to file their documents and ask for a hearing. But if they move very quickly, they could, in theory, if the court agrees, block her before we get to that meeting. But it's getting very tight for something like that. So I suspect she'll probably be there. Walk us through any sort of precedent when it comes to something like this with a Federal Reserve governor.

10:28But then also, is there just cause there when it comes to the president? Well, it's funny because you mentioned those two things. This is the point that the judge made is that nobody has ever tried to fire someone at the Fed for cause. And so she had to decide what cause means and whether or not the president's accusations rise to cause. And basically, she said that the historical record shows that cause basically relates to things that happen in your job while you're doing it. And that if she did something that she shouldn't have done before she came to office, and that was years ago and people knew about it, then it wouldn't rise to cause.

11:13And that's one of the reasons that she said that Cook could stay in her office for now. So what does it mean for time-wise? I mean, we're today a week away from a Fed decision. What does this mean? Well, the administration is going to have to move fast to get filed, and they will have to get a three-judge panel that would hear it quickly enough. And they'd have to make the case that there would be some sort of harm to the government if she were allowed to vote at this meeting. because they can make the case that there's harm to the government if she remains on the job without a determined time frame.

11:55This could play out over a week or so. And we've seen that with other people that the president has tried to fire. But to get her out before the meeting would take a lot because it doesn't seem to rise to the necessity of having judges work through the weekend. Is there an indication about a timetable when you're talking about over the next week or so? So how long could this possibly drag out? Oh, it's going to drag out for quite some time because whatever happens in the appeals court, it will probably go to the Supreme Court. And because this is a unique case, nobody has ever tried to fire somebody for cause and the definition of cause, et cetera.

12:31So the Supreme Court is starting to back up with the Trump problem cases. They just took on the tariff case on an expedited basis. So they would have to have a hearing for that in November and then try to make a decision maybe by the first of the year. If it goes to the Supreme Court and in this case, it doesn't seem to be the kind of thing that's going to set the world afire. So we could go on the regular docket and then we don't get a decision until next June. So then the question becomes, does she stay on the Fed until that time? And that'll depend both on the appeals court and then the Supreme Court could also issue a stay and kick her out as they did with other people that Trump tried to fire.

13:16But again, this is an unusual case because the Supreme Court's given them something of a carve out. Now, if we can get into the labor inspector general and this report that they're apparently doing review of the challenges at the BLS. What are these challenges? Interesting language that they use because one is tempted to read it after everything that the administration has done as we're going to look at ways to find that you guys did something wrong and get rid of you. but it could be that let me put it this way i have said that the if if you were a normal administration what you would say is there seem to be issues with getting the data as accurate as it can be because you're short of money and short of personnel so let's sit down and figure out how we can address those challenges which is not what they did but one could read the inspector general is stepping in and saying, well, maybe I'll prepare a report that says you can't do all this with the resources that you've been given.

14:16I suspect, though, that it is probably an effort to, because Trump had fired all the inspectors general and appointed new ones, is an effort to find out something that they are doing wrong and make a case for further dismissals, which would only put them farther behind the eight ball. Now, this is not the kind of thing that's going to get a lot of attention right away, and it may take some time. And so it's not an imminent threat to the BLS, but it is another cloud on the horizon. So how does Stephen Moran ultimately fit into all of this? Well, he fits into it because we're reporting, based on people familiar, that he will get a vote on the floor on Monday.

14:59It's not easy, given the Senate rules, to do something that fast. But the president said, do it. So they are going to do it. And then he can walk in the next day and, you know, somewhere in between the vote and the time the meeting starts, somebody will swear him in and he'll participate in the meeting. It'll be an unusual situation. He would have had no preparation other than what he can do at the CEA, but he wouldn't have access to the Fed staff or anything to prepare for the meeting. So other than advocating for maybe a 50 basis point cut, if we assume the Fed's going to do 25, it's hard to see how much he would contribute.

15:38But there's a good chance that he will be there. He and Lisa Cook will probably be there. Then what's a chance that he would be nominated for a full term? That hasn't been. Well, that's that's an open question. The president has sort of left that open in whether it's a tryout for the job or whether he's just keeping the seat warm so he could appoint someone else to be chairman if another seat doesn't open up, if Cook isn't gone, or if Jay Powell decides to stay on, then whoever he wants as chairman, unless it's somebody who's already on the board, he would have to have an open seat. So then Steve Myron would go back to the CEA, it seems.

16:16All right, Michael McKee, always a pleasure when you're joining us on Bloomberg Television and Radio International Economics and Policy Correspondent at Bloomberg Television and Radio. This is the Bloomberg Business Week Daily Podcast. Listen live each weekday starting at 2 p.m. Eastern on Apple CarPlay and Android Auto with the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station. Just say Alexa, play Bloomberg 1130. Lisa, we were talking about earlier, there's so much to discuss when you're talking about the economic front and thinking about when the labor inspector general initiating a review of those BLS challenges.

16:54obviously producer prices coming in at the lowest level since April ahead of that CPI data. So many different places to start, but let's bring in our next guest who can break this down for us and give us more of her purview. Elizabeth Rentner, senior economist at NerdWallet, joining us from Durham, North Carolina. Elizabeth, it's great having you with us. I'll start off first when it comes to those BLS revisions yesterday. And then, of course, on top of the latest news today that the Labor Inspector General is initiating that review of that. Walk us through kind of how do you view this from your purview as an economist, and what does this ultimately mean, and how long could this take?

17:31Hey, well, thanks for having me, first of all. I'm excited to be here and chat with you guys. So, you know, I think I reiterate this a lot to folks, is we can't think of revisions as corrections. Revisions are part of the statistical process. Various revisions happen throughout the year. They happen monthly to the jobs report, as, you know, they've been making headlines over the past few months as well. So this preliminary benchmarking estimate that came out yesterday, the revisions were large. We anticipated that. And there's several reasons for that. Primarily, low response rates to the BLS is one contributing factor.

18:05Another contributing factor, though, is we often see large revisions when the economy is in transition. So if it is changing direction, if it's growing rapidly, or if it's decelerating, a lot of times when you take sample-based data, which is the jobs report, and you level it up or you try to make inferences about the entire population, that gets a little more tricky when the economy is changing. And so I think that is one of the big reasons for the big revisions here. You know, it doesn't hurt to look at the data, to look at the integrity of the data. The BLS does need help in the way that they are severely underfunded and they're part of a hiring freeze.

18:41And so I think looking at the data is good. I have faith in the data. But these large revisions were significant, and it's important to pay attention to them and what they mean. So when it comes to the data, Elizabeth, I mean, what holds more weight? Is it inflation data or is it jobs data? That's a great question. And that's why, you know, the Fed has a dual mandate where they have to balance these risks. It's both, right? And that's what we're seeing with Fed decisions right now is they're in a challenging place where inflation isn't at their 2 % target, but the The labor market is clearly weakening.

19:13You know, we'll all be listening next week to how they handle these risks. I do think a rate cut is probably likely. I think this is where they sort of turn their attention to the labor market as being the greater two of those risks at this time. But, you know, it's why it's a constant balancing act. They're both very important data sources. They tell us a lot about the health of the economy overall. Of course, as you know, Elizabeth, the fierce debate, as always, when it comes to different cutting cycles like this, and resuming after they started a year ago, last September, with rate cuts. As far as how aggressive do you think the Fed will be with cuts when you have swaps pricing in close to 150 basis points over the next year?

19:55Will it be that aggressive or will inflation data prevent that from happening? You know, that's a great question. I tend to think it's not going to be aggressive unless the labor market we can significantly and dramatically. Right now, we're seeing cooling that probably needs to be addressed. But I don't anticipate, you know, like a 50 basis point cut next week, like some people are anticipating. I think they'll play it a little more conservatively. But we kind of have to wait and see. You know, we've never, it's hard to say what's going to happen with inflation right now, because we've never seen tariffs like this.

20:30We don't know what's going to happen. And so it's tempting to say tariffs should just be a one-time price bump. But these are very broad, and they're impacting all different levels of the economy at different timing and at different magnitude. Some of it's still tied up in the courts. So there's just a lot of unknowns right now that I think we're just going to have to wait and watch play out. And all that said, what does that mean for the consumer? How is the consumer feeling? Yeah. Yeah. So overall, general consumer sentiment about the economy is really souring. We've seen it in, you know, the University of Michigan, the conference board.

21:01Those are kind of the gold standards of consumer economic sentiment. This week, though, we got the survey of consumer expectations from the New York Fed, and it showed that inflation expectations are slightly up. Households are more likely to say their financial situation is worsening than improving. And many people, sort of the big takeaway from the New York Fed data was the outlook about the labor market. People put the probability of finding a new job if they lost their current job at the lowest ever. It was something like 49%, if I remember correctly. So people have a lot of uncertainty right now.

21:32Just last week, we found that 64 % of Americans believe the U.S. economy will enter a recession in the next 12 months. And that's up slightly from when we asked one month ago. So I think all of this nervousness taken collectively could lack or could indicate a lack of resilience should the economy falter. And by falter, I don't necessarily just mean a recession. Of course, that would be faltering. But also price increases, right? If inflation surges again. I don't think households are in the same place they were a couple years ago to be able to deal with this sort of stressors. What do you think this all means when it comes to corporate margins?

22:05Because I know not only just larger companies that you follow, but smaller ones too. What are you seeing there and how are those consumer oriented ones feeling it maybe more so when it comes to passing on costs to Americans and other shoppers? Yeah. So I think, you know, The PPI to CPI ratio has been a little volatile recently. Margins have been volatile in the data. We know that companies have been reluctant to pass along price increases to consumers because they know consumers are price sensitive right now. I think in my work at NerdWallet, I pay particular attention to consumers. That doesn't just mean consumers in the store consuming things, but I think about employees and I think about small business owners.

22:48When I look at the PPI, for instance, it's important not just to look at the headline figures because they're volatile from month to month, but to remember beneath those headline figures, there are thousands of large and small companies working with very different numbers, very different customers and decisions to make. And generally speaking, these smaller businesses are going to be more vulnerable to squeezing margins. They're going to be less able to hold that line right to to eat the tariffs. They might not have the luxury of waiting and seeing where things end up in the courts. And so I think we're more likely to see these small businesses get uncomfortable, maybe cut hours, cut employees and pass those prices along.

23:23Elizabeth, there's been so much tariff trade news lately. Sometimes it's hard to keep up. The headlines just keep popping up. What's your take, though, on the market reaction to all the news surrounding it? Yeah, well, I just think overall across the economy, whether we're talking about consumers, whether we're talking about markets, there's just a lot of uncertainty. And I know we're all tired of hearing that word, but it doesn't seem to be getting any clearer. And I think we're all making our best guesses, our best judgments. You know, consumers haven't really pulled back dramatically on spending yet, but I do sense that's coming.

23:58You know, debt levels are higher now than they have been over the past four years. And so I just I sense that we're just in a different place right now. And, yeah, we're all trying to sort out what comes next. Well, as far as my last question to you, Elizabeth, what do you think comes next ultimately? That's a great question. You know, one of the things I'm watching right now in the labor market is sort of how people are feeling about their prospects. I just mentioned the survey of consumer expectations and what that said about people feeling comfortable leaving their job. But how does that translate to the economy overall?