Davos Confab

Davos Confab

Notes from different corners of the world.
Jan. 28 1999 10:30 PM

Davos Confab

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News flash: The World Economic Forum has been thrown into a state of consternation and confusion by the revelation that the official booklet of participants contains a error: Under their correct names and photographs, the biographies of Vice President Albert Gore and former Vice President Dan Quayle have been reversed. (I am not making this up.)

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It has been explained to the forum authorities that all U.S. vice presidents are not in fact interchangeable. An apology to both veeps is thought to be forthcoming from the Swiss government (along with a pound of chocolates and a bar of gold).

Otherwise, everyone is busy signing up for sessions and eating lunch. A few people have even attended a session. High points of the morning: An assertion by Foreign Policy Editor Moises Naim that Wall Street now qualifies as one of the world's volatile "hot spots"; the averment by Goldman Sachs' Bob Hormats that, everything else having failed to change its self-defeating behavior, maybe it's time just to ignore Japan.

Washington Post columnist Richard Cohen hurries off, saying he has a meeting with Judge Crater. Judge Crater? Yeah, he says, everyone really is here.

If it keeps on snowing the way it has been for the last 26 hours, we may all be here for a long time.

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I chat in the hall with a banker from Hong Kong. He is unperturbed by the turmoil in Asia's economies. We have half the world's people, he says, things will work themselves out. What if Japan truly collapses? He shrugs. Nothing--not the West, not its own government--is going to convert Japan from a nation of savers to a nation of buyers.

In other words, most of what is being talked about here is a waste of time. Such views do not, however, deter the panelists on "Environment 2000" from offering prescriptions for global warming. (The uncertainty is great, but the risk is far larger. Market-based solutions are best, but it would be a mistake to rely on the market to cope with so gigantic a potential problem.)

The financiers and economists offering an "Economics Update" are more passive. The world sidestepped an economic disaster of 1930s proportions last year and that near miss did owe much to the timely action of big countries' central banks in cutting interest rates and boosting liquidity. But as the future, que será, será. The big worries: huge world overcapacity, especially in autos; weak political leadership in Japan, Russia, most of Latin America and, yes, even the United States; high levels of exposure to shaky "emerging country" debt. And last, but actually first on almost every panelists' list of concerns, the "very high asset valuations" on the U.S. stock market. (This is polite economic parlance for "your traders have gone bananas.") Prognosis: 1999 will be OK ("a year of remission," said one panelist). But come 2000, watch out.

All this plays out against a background chorus of ringing cell phones. Despite the pleas of the moderators, the assembled grandees seem unable to turn them off. The ring patterns are charmingly eclectic. One gentleman exits to the sound of bagpipes emanating from his briefcase. He does not seem embarrassed.

Now I am off to the "media leaders" dinner. It is rumored that Al Gore will drop by. I hope they don't still have him confused with Dan Quayle.