By Don Quijones, Spain & Mexico, editor at WOLF STREET.

The world’s second richest man, Carlos Slim Helú, is doing something he hasn’t done for a long time: losing lots of money. According to El Financiero, Slim’s holdings are down $7.2 billion so far this year.

While that amount represents one-tenth of Slim’s total worth at the beginning of this year ($77 billion), it’s enough to hurt. After all, when one’s wealth is already so vast that it could buy up pretty much anything on the planet, including small nations, reputation is what ultimately counts.

Until recently, Slim’s reputation as an investor was virtually flawless. His ability to turn just about anything, from banking, retail and airlines to mining, printing, construction, restaurants and telecoms – particularly telecoms – into fortunes was unrivalled. But now losses are piling up. And his reputation is getting dented.

Losing the Midas Touch?

Slim’s gold mining company, Minera Frisco SAB, has tumbled 53% this year, the worst performance among 90 international peers tracked by Bloomberg:

Mexico City-based Frisco has had only one profitable quarter in the past nine, and this year’s 6.7 percent slide in gold prices is just making things worse.

Slim owns 78 percent of Frisco, according to data compiled by Bloomberg, so he’s the biggest loser from the stock’s collapse; it has contributed to a $7.2 billion tumble in his fortune this year, the most among 400 rich people tracked by Bloomberg.

Laura Villanueva, an analyst at Mexican brokerage Monex Casa de Bolsa SA, sees more losses ahead for Frisco as the company struggles with falling output and a high debt load.

Frisco is not the only Slim-owned investment vehicle to have hit the wall. U.S.-traded shares of his telephone behemoth, America Movil SAB, have lost 12%, primarily as a result of losses in the Mexican peso and recent regulatory changes in Mexico. Shares in his bank, Grupo Financiero Inbursa SAB, have also fallen.

Meanwhile, his $74 million investment in the ailing Spanish construction behemoth FCC is increasingly looking like another bad bet. When Slim bought 25.5% of the company back in November last year, at an average price of €9.75 euros a share, many analysts hailed it as yet another piece of shrewd business from a man famed for snapping up bargains in the midst of panics and sell-offs. He even had to fight off interest from fellow billionaire investor George Soros.

But now FCC’s shares are languishing at €8.695, over 10% down from their original price, and rumors are fast spreading that the company could be on the verge of another debt restructuring and capital increase. For Slim, that could mean a further dilution of his capital and yet more squandered funds.

Little Sympathy in Slimlandia

While Slim is often celebrated in the international press for both his sharp business acumen and generous philanthropy, his recent misfortunes are unlikely to elicit much sympathy back home in Mexico, a country that boasts some of the worst inequality rates on the planet.

While Slim may not be the primary cause of that inequality, he is certainly one of the primary beneficiaries and arguably its most visible symptom — so much so that George Grayson, a Mexico expert at the College of William & Mary in Virginia, recently rechristened Mexico: “It’s virtually cradle to grave. It’s Slimlandia. You are engulfed by Slim in Mexico.”

Slim owns controlling interests in at least 222 different companies and minor stakes in countless more. His vast business empire is influential in just about every sector imaginable of the Mexican economy and accounts for a mind-blowing 40% of the listings on the Mexican Stock Exchange. As Paul Harris writes in The Guardian, the sheer scope of his holdings is breathtaking:

It is virtually impossible for Mexicans to go about their lives without in some way contributing to his fortune… They are born in Slim’s hospitals, drive on his Tarmac, smoke his tobacco. They build their houses from his cement, eat in his restaurants, talk on his phones, and sleep in bed linen made in his factories.

As I wrote in Slimlandia: Mexico in the Grip of Oligarchs, Slim is not Mexico’s only billionaire. There are 15 others on Forbe’s latest billionaire’s list, which this year does not include the fugitive Mexican drug trafficker Chapo Guzman, who bizarrely was featured on the list four separate times before a public outcry in Mexico put an end to the practice.

Together these 16 individuals – half of whom are or were owners of former state-run enterprises – boast a combined wealth of $144 billion, equivalent to 11.4% of Mexico’s GDP of $1.26 trillion in 2014.

Putting the Robber Barons to Shame

Even after his recent setbacks, Slim’s holdings account for just under half of that amount: his total wealth of approximately $70 billion is the equivalent of nearly 6% of Mexico’s GDP. This puts even the U.S. robber barons of the 19th century to shame: at the peak of his powers, John Rockefeller was worth just 2.5% of U.S. GDP.

It’s no coincidence that Mexico is the most unequal of the 34 nations that make up the Organization for Economic Cooperation and Development (OECD). As a recent in-depth report by El Daily Post reveals, there are 2,540 Mexicans whose net individual assets reach $30 million dollars or more.

They would fit into two Metro trains, but control 43% of the total individual wealth in the nation. Meanwhile, 61 million Mexicans, the equivalent to Italy’s total population, cannot afford a decent standard of living.

Most worrisome of all, the gaping gulf between the nation’s super rich and the super poor continues to grow at breakneck pace. In the last 40 years, Mexicans’ purchasing power has not just stagnated, as has happened in many Western nations, but has shrunk by two-thirds. In 1976, a family on minimum wage could buy four times as much as today.

In the last 18 years, the average fortune of Mexico’s select group of 16 billionaires grew from $1.7 billion to $8.9 billion. Meanwhile, the average Mexican in the lower 20% has a net worth of $80 dollars. There are few better examples of systemic failure.

For decades, Mexico has followed — and in many ways continues to follow — the rule book of modern economic governance. It is Latin America’s second most privatized nation. And it has signed more free trade agreements than just about any other nation under the sun. Yet the result is ever-increasing concentration of power and wealth, stagnating incomes, rising prices, and dwindling choices for consumers who have to deal with Slim’s empire whether they want to or not. So his $7.2 billion loss so far this year elicits scant sympathy in Slimlandia. By Don Quijones, Raging Bull-Shit.

Mexico is already working on a recipe for its next debt crisis. Read… Corporate Dollar Debt Explodes in Mexico as Peso Dives

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