Davos: An unrealistic view from the mountain

[CHIMO]

The theme of Davos this year was "shared norms for the new reality", one of those phrases where the words can be rearranged in any order and remain utterly vacuous. Business leaders, policy leaders and the world's smartest academics had five days in the high Alps to work out what this actually meant. Despite much head scratching not one of them could.

If there was a shared norm at the World Economic Forum, it was that things are looking up. The chief executives who make up the paying clientele at Davos have had a much better year than they were expecting 12 months ago. In January 2010, there were fears of a double-dip recession with even über-optimists expecting a year of only tepid growth. In fact there has been a robust bounceback from the deep slump of 2009. Profits are up and so are bonuses. From the boardroom, life is sweet.

And should remain so in 2011. The emerging markets – China and India are booming. Growth in the US is picking up helped by a fresh injection of policy stimulus. After a year of indecision, Europe is finally getting to grips with the sovereign debt crisis that required bailouts for Greece and Ireland. Big companies, having cut costs aggressively in the downturn have hundreds of billions of dollars in the bank, ready to be unleashed in a wave of investment spending.

Above all, the world is in the middle of a period of stupendous technological change. Kris Gopalakrishnan, chief executive of Indian technology company Infosys, noted that most business leaders were using smart phones and tablets at Davos this year with laptops very much yesterday's kit. The global economy is in the early stages of one of the big structural changes that happen every 50-60 years, a so-called Kondratieff cycle in which new industries appear. It is this combination of innovation and rapid growth in Asia and Latin America that has convinced some economists, such as Gerard Lyons of Standard Chartered, that the global economy is a decade into a 30-year super-cycle of fast growth as seen after the second world war.

http://www.guardian.co.uk/business/2011/jan/31/davos-economics-crisis-comment

[Demeter]

1. they are all just whistling past the graveyard

they have less control now than ever before, and more belief in that control than was ever warranted.

Look for a huge flock of black swans settling in and eating their lunches, dinners, cheese, etc.