First with Financial Comment from Arabia

Boring Davos forum fortells market correction?

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The World Economic Forum in Davos seems to have been very boring this year, judging from the newspaper and TV reports. Only some rather over-aggressive questioning of a panel by an anchor from Al Arabiya TV made any waves of controversy.

What a contrast in mood to a year earlier when nervous businessmen vied to express concern and even mild depression about the outlook. This year perhaps the mood was one of disbelief at the stock market recovery, and a concern not to be the one to bring it to an end by talking it down.

W-shaped recovery

If ever there was a middle to a W-shaped recession this is surely be what it would look like. The road from recovery is far from sure. But it is not good form to rock the boat when everybody might fall out.

That made for a boring Davos. Even the Chinese were allowed to get away with their censorship of Google. Nobody wanted to bite the hand that feeds global recovery.

Has the World Economic Forum therefore just become some kind of a parliament for a global government, stripped of its role as an ideas and think tank for the world? It could well be that it is becoming such an essential lobbying platform for world opinion that its original function is being lost.

If so that is a shame but it is also an opportunity for some free-thinking country to host an alternative Davos, a fringe World Economic Forum perhaps, where more controversial opinions and forecasts can be aired and discussed openly.

Economic forecasts wrong

Or is it that the economics profession has lost its way? One speaker raised a laugh by noting that so many experts had missed the recession that he no longer felt under-qualified to speak. If so that is a good thing.

For economists can chide themselves for their forecasting errors. And are they all getting it wrong again now? Is there really a road to recovery or has there just been a brief plateau on the way down?

If Wall Street now reverses direction then it is signaling a bumpy road ahead for the global economy, and that the participants of Davos are wrong to be talking up the economy and ignoring the downside. But then they are now more worried about leading opinion than sorting out what opinion ought to be saying.


Written by Peter Cooper

January 31, 2010 at 10:37 am

One Response

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  1. “an opportunity for some free-thinking country to host an alternative Davos, a fringe World Economic Forum perhaps”

    A bit tongue in cheek, no? The South American leftist bloc runs their WSF, a fringe Davos alternative where all the business people have been replaced by commissar-type political figures from around the globe.

    Truly an Orwellian experience, the event culminates in a series of choreographed marches replete with brazen Marxist-Leninist symbolics, and a Castro style live speech from the senior political leader of the year.

    WSJ quoted a trade unionist over the weekend, “We were never sure if we were really welcome here. This time, we are speaking on panels, we have a seat at the table.” WEF looking more like the WSF every year.

    R. Maxwell

    January 31, 2010 at 1:02 pm

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