’Grimmest’Davos ever wraps up in poignancy
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Bloomberg
Oluşturulma Tarihi: Şubat 03, 2009 00:00
DAVOS - The need to ’find a scapegoat’ at the World Economic Forum summit in Davos poisons the climate, marking the grimmest Davos for many participants. Prime Minister Erdoğan’s standing up to Israel and criticism against the US by Russia and China displayed the bitterness in the air.
The theme of the World Economic Forum’s annual meeting was "Shaping the Post-Crisis World." Unfortunately, the assembled executives, policy makers and do-gooders were stuck in the here and now.
The search for scapegoats and the worst economic prospects since World War II resulted in a gathering marked by fear, anger and bitterness, a far cry from the usual search for consensus. Turkish Prime Minister Recep Tayyip Erdoğan stormed out of a panel discussion and Russian Prime Minister Vladimir Putin hectored the U.S. as the font of the world’s economic woes. Almost everyone blamed the few bankers who showed up for the near-collapse of the financial system.
Attendees were "less reluctant to criticize, and sometimes very vocally criticize, the U.S. and its capitalist system because of the problems we’re having," said David Rubenstein, co-founder of the Carlyle Group. "Maybe that’s deserved, but it’s a big change."
Grimmest Davos
"Everyone I spoke to says it’s the grimmest Davos they’ve ever been to," said Kenneth Rogoff, professor of economics at Harvard University. "The mood has been very depressed. It’s a low-burn depression."
Another big change was the virtual absence of Wall Street figures among the 2,500 delegates at the conference, which ended Sunday.
JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon was the only U.S. banking chief who showed up. He made a concession to the mood of this year’s event by accepting some blame for the collapse that has led to more than $1 trillion of writedowns. He deflected the rest at regulators. "God knows, some really stupid things were done by American banks and by American investment banks," Dimon said. "To policy makers, I say: ’Where were they?’"
That attitude was tough for some to swallow. At one session, a call for curbs on bankers’ bonuses was met with applause by sections of the audience.
"We should not trust these bankers," said Nassim Nicholas Taleb, author of the best-selling book "The Black Swan." "Look at their track record. The only way to stop the process is for the government to own those banks."
With the world’s elite nursing a collective hangover after the greatest era of global prosperity came to an end, there was enough bile to go around.
Anyone who thought Barack Obama’s election as president would temper criticism of U.S. policies would have been disappointed. Economists questioned his $819 billion stimulus plan, urged him to deliver another rescue package for banks and fretted about soaring national debt.
"People are looking for the solution but don’t yet have the question formulated," Arif Naqvi, chief executive officer of Abraaj Capital, which manages $7.5 billion, said.
Bad news from afar
The need for action wasn’t in debate. Away from the slopes, U.S. stocks capped their worst ever January, the International Monetary Fund forecast the weakest global growth in 60 years and companies from Starbucks to Caterpillar cut jobs.
That led many attendees to predict they’ll still be in a funk when they return in 2010. "We’re in a multi-year problem," Howard Lutnick, chief executive officer of Cantor Fitzgerald, said. "We’ve weathered horrible times before. That’s what lies ahead of us now."
Delegates also took turns bashing America’s policies and its role in the world. Chinese Premier Wen Jiabao and Putin cited the U.S. for leading the world into recession in back-to-back speeches on the opening day.
"Just a year ago, American delegates speaking from this rostrum emphasized the U.S. economy’s fundamental stability and its cloudless prospects," Putin said.
To cap it off, Putin dismissed a query from audience member Michael Dell, head of personal-computer maker Dell, about what the technology community could do to assist Russia. "We don’t need any help. We are not invalids," Putin said.
The spats gave this year’s conference a more balanced tone, said Bahraini banker Khalid Abdulla-Janahi, who remembers then-Vice President Dick Cheney "hammering the Russians, the Iranians and many others" during his 2004 visit.
"This time, it was a two-way street," said the chairman of Ithmaar Bank. "We heard Putin hammering the West and Erdoğan standing up to Peres. That’s how it should be."
Those who made it to the five-day Alpine retreat insisted that they weren’t wasting their time or their money - and they really didn’t mind the muted tone of the event’s party circuit.
"People are conscious about throwing parties or even smiling this year," said Martin Sorrell, chief executive of WPP Group. "It’s become a little too big, but it’s never been more relevant."
The search for scapegoats and the worst economic prospects since World War II resulted in a gathering marked by fear, anger and bitterness, a far cry from the usual search for consensus. Turkish Prime Minister Recep Tayyip Erdoğan stormed out of a panel discussion and Russian Prime Minister Vladimir Putin hectored the U.S. as the font of the world’s economic woes. Almost everyone blamed the few bankers who showed up for the near-collapse of the financial system.
Attendees were "less reluctant to criticize, and sometimes very vocally criticize, the U.S. and its capitalist system because of the problems we’re having," said David Rubenstein, co-founder of the Carlyle Group. "Maybe that’s deserved, but it’s a big change."
Grimmest Davos
"Everyone I spoke to says it’s the grimmest Davos they’ve ever been to," said Kenneth Rogoff, professor of economics at Harvard University. "The mood has been very depressed. It’s a low-burn depression."
Another big change was the virtual absence of Wall Street figures among the 2,500 delegates at the conference, which ended Sunday.
JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon was the only U.S. banking chief who showed up. He made a concession to the mood of this year’s event by accepting some blame for the collapse that has led to more than $1 trillion of writedowns. He deflected the rest at regulators. "God knows, some really stupid things were done by American banks and by American investment banks," Dimon said. "To policy makers, I say: ’Where were they?’"
That attitude was tough for some to swallow. At one session, a call for curbs on bankers’ bonuses was met with applause by sections of the audience.
"We should not trust these bankers," said Nassim Nicholas Taleb, author of the best-selling book "The Black Swan." "Look at their track record. The only way to stop the process is for the government to own those banks."
With the world’s elite nursing a collective hangover after the greatest era of global prosperity came to an end, there was enough bile to go around.
Anyone who thought Barack Obama’s election as president would temper criticism of U.S. policies would have been disappointed. Economists questioned his $819 billion stimulus plan, urged him to deliver another rescue package for banks and fretted about soaring national debt.
"People are looking for the solution but don’t yet have the question formulated," Arif Naqvi, chief executive officer of Abraaj Capital, which manages $7.5 billion, said.
Bad news from afar
The need for action wasn’t in debate. Away from the slopes, U.S. stocks capped their worst ever January, the International Monetary Fund forecast the weakest global growth in 60 years and companies from Starbucks to Caterpillar cut jobs.
That led many attendees to predict they’ll still be in a funk when they return in 2010. "We’re in a multi-year problem," Howard Lutnick, chief executive officer of Cantor Fitzgerald, said. "We’ve weathered horrible times before. That’s what lies ahead of us now."
Delegates also took turns bashing America’s policies and its role in the world. Chinese Premier Wen Jiabao and Putin cited the U.S. for leading the world into recession in back-to-back speeches on the opening day.
"Just a year ago, American delegates speaking from this rostrum emphasized the U.S. economy’s fundamental stability and its cloudless prospects," Putin said.
To cap it off, Putin dismissed a query from audience member Michael Dell, head of personal-computer maker Dell, about what the technology community could do to assist Russia. "We don’t need any help. We are not invalids," Putin said.
The spats gave this year’s conference a more balanced tone, said Bahraini banker Khalid Abdulla-Janahi, who remembers then-Vice President Dick Cheney "hammering the Russians, the Iranians and many others" during his 2004 visit.
"This time, it was a two-way street," said the chairman of Ithmaar Bank. "We heard Putin hammering the West and Erdoğan standing up to Peres. That’s how it should be."
Those who made it to the five-day Alpine retreat insisted that they weren’t wasting their time or their money - and they really didn’t mind the muted tone of the event’s party circuit.
"People are conscious about throwing parties or even smiling this year," said Martin Sorrell, chief executive of WPP Group. "It’s become a little too big, but it’s never been more relevant."