Participants enter the final session of the World Economic Forum, Feb. 1, 2009. (Pascal Lauener/Reuters)

Decoding Davos

As the fondue cools and the skis dry, what did we really learn from the World Economic Forum annual meeting?

By Thomas Mucha
Published: February 2, 2009 18:17 ET
Updated: February 2, 2009 18:39 ET

A lot of hot air blows through Davos, Switzerland each winter. This is, after all, the place where the purportedly richest, smartest and most powerful gather for a long weekend to solve the world's problems.

This year, however, the World Economic Forum event didn't require the verbal puffery and political posturing that usually come with this global gabfest, though we did get a bit of that.

You don't need a PhD in economics to know that things are bad and getting worse. The growing severity of the global economic crisis is apparent from the factory floors of Detroit, to the slums of Delhi, to every capital city in between.

Fifty-one million people are expected to lose their jobs this year, the UN says. That would push the global unemployment rate to 7.1 percent, versus 5.7 percent just two years ago.

In China alone, 20 million migrant workers can't find jobs in the cities and are returning to their rural homes, the Chinese government said Monday.

In Japan, consumers are spending less while Japanese companies — from Toyota, to Honda, to Sony, Nintendo, Toshiba and more — are reeling.

In Europe, the French are protesting and in Brazil, the central bank is throwing inflation caution to the wind and cutting interest rates.

So the global economy was on the lips of many in Davos, mixing with all that expensive wine. Sadly, this global mosh pit produced little in the way of quick fixes, hope or exuberence — irrational or otherwise.

But it did produce some interesting moments, as GlobalPost correspondents uncovered during the four-day event.

William Dowell, our Geneva correspondent, wraps up Davos here. The bottom line? Nobody has any idea what's coming.

Meanwhile, our Worldview correspondent HDS Greenway filed an excellent report on the biggest political dust-up of the weekend: a shouting match between Nobel Prize winner Shimon Peres and Turkish Prime Minister Recip Tayyip Erdogan.

Finally, for an inside look at what really happens at all those cocktail parties, go here. And here.

 

Other recent dispatches by Thomas Mucha:

Can Barack channel Miles?

The sick man and the dragon

A world of trouble

For continuous coverage of the global economic crisis, and other worldly maters, see Thomas Mucha's Reporter's Notebook.

 

 

 

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Posted by MartynStrong on February 2, 2009 18:52 ET

Capital markets are unstable. In the past there was no way to make them stable. But today we have computer power that can be used to make them stable. By using the greater computer power of today we can have a much higher turn over of capital in the capital market. This higher turnover will make the market harder to game or control and the market will no longer have the unstable run ups or declines. Who can change or control the market when say 20% of the capital is trading each day. So now that we have the compute power to provide for all these transactions that will smooth out the market how to we force people to turn over at a rate of 20% a day? Easy, put a cap gains tax of 0% (zero) on all gains of 7 days or less and put a cap gains tax of 90% of all gains of more than 7 days. The likes of Yahoo, Micosoft and/or Sun Micro Systems will give us the systems that will provide automated software agents to support turning over one's investments every 7 days (based on the specs you give the agent). A system like this will make the financial markets work as smoothly as the local fruit market.

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