World Economic Forum DAVOS '09

[diesel]

A very interesting speech given by Vladmir Putin. I think the Russians have far more of an idea where all this is heading than the US does.

http://www.weforum.org/pdf/AM_2009/OpeningAddress_VladimirPutin.pdf
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All cats are gray in the dark.

[rffrydr]

Martin Wolf's final dispatch:

http://m.ft.com/cms/s/0/c7682f76-1034-11df-841f-00144feab49a.html?catid=143&SID=3b5de68d75b3e7d55690aaeaa9a1049e

[rffrydr]

China books one of the most prestigious houses directly across from the Davos floor.
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Today is the Tomorrow you worried about Yesterday!

[rffrydr]

Bloomberg reporting far fewer helicopters in Davos this year. --And the $11 McDonalds value meal.
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Today is the Tomorrow you worried about Yesterday!

[rffrydr]

http://topics.nytimes.com/top/reference/timestopics/organizations/w/world_economic_forum/index.html?scp=1-spot&sq=Davos&st=cse
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Today is the Tomorrow you worried about Yesterday!

[Rubedo]

http://www.bi-me.com/main.php?id=30749&t=1&c=35&cg=4&mset=1011

Rising gold signals fear of default rather than worries about future inflation, says Roubini
Source: BI-ME , Author: BI-ME staff
Posted: 30-01-2009

INTERNATIONAL. New York University’s Nouriel Roubini who predicted the current financial crisis at the World Economic Forum two years ago, believes this is the worst financial crisis since the Depression, the first global synchronized recession in decades and it's going to get worse.

Speaking to CNBC in Davos, Roubini said the rise in the price of gold is a signal of fear that countries and corporations may default on debt rather than of worries about future inflation, and the precious metal is used as a "safety valve."

Investors will be hit by the realization that many banks are bankrupt, that companies will have to rein in debt and sell assets and that emerging markets may get into trouble, Roubini said.

[rffrydr]

We've come a long way from last year's Davos "BRIC" city and the predicted here and now defunct theory of decoupling. Later that summer in St. Petersberg Putin lectured the western world on this "new economy"....and their mastery thereof.

Watch him now flail in the wind:

http://ftalphaville.ft.com/blog/2009/01/29/51833/putins-shrinking-reserves/
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Today is the Tomorrow you worried about Yesterday!

[rffrydr]

Tremors in euroland:

http://ftalphaville.ft.com/blog/2009/01/30/51879/you-can-tell-by-the-way-i-use-my-walk/
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Today is the Tomorrow you worried about Yesterday!

[rffrydr]

Stephen Roach on Mood at Davos--and possible turning point.

http://media.bloomberg.com/bb/avfile/News/Surveillance/vSBvfYD4Lre0.mp3

For this former booster, China is a big footnote tacked on at the end of this interview.
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Today is the Tomorrow you worried about Yesterday!

[diesel]

Although the US maintains the worlds best institutions of learning what use are they if one cant find a job in the US?

Also I remember from my time in the US that most graduate students in the labs were foreigners barely any were natural US citizens. If this is still the case (Maybe you can verify this Henry) not only does the US rely on foreigners for financing and manufacturing but also now for innovation. That would be a clear indication of a nation in decline i.e. rotting from the inside out.

BTW I would agree all this outsourcing makes things cheaper, but then again I would argue all 3rd world countries feature cheap stuff. Surely we don't want that, isn't the US No.1?
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All cats are gray in the dark.

[rffrydr]

[rffrydr]

Question: is not Davos the diplomatic equivalent of Thains offfice?

Politics rules: Auto bailout comin' back.

http://latimesblogs.latimes.com/money_co/2009/01/wall-street-bon.html
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Today is the Tomorrow you worried about Yesterday!

[diesel]

In terms of investment into the schooling system I was referring to the Federal Government who have done an abysmal job with primary and secondary schooling and just about everything else. Lets face it the Federal Government is a huge rope around the US taxpayers neck.

The colleges, university's etc which rely on their endowments are very strong as you point out and provide the best higher education in the world at the present time. I wont dispute this. In fact I would argue this is clearly the source of US innovation and scientific achievement. However even here cracks are beginning to appear. The US is falling behind in space technology, rocketry and engineering. The fact the the US will soon have to rely on Russia for access to the space station should be a huge red flag! The business schools have given us a bunch of idiotic hedge fund managers who continue to under perform their benchmarks so no marks there.

BTW, I am not endorsing Russia just trying to highlight some of the issues that the US faces here from my overseas perch. I dont dislike the US, some of my fondest memories are from my time spent living in Ely, Minnesota. I just cant help but feel that the previous administration has badly let the US down and its going to take a lot of work to get it back on track. I hope Obama is up for the task! My first impressions are negative though.
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All cats are gray in the dark.

[HenryTo]

Mr. Odysseus is much more of an expert than I am on Russia, so I would love to see him comment.

That said, my personal belief still stands. Putin has merely hoarded the funds from oil and gas exports and have not invested whatsoever in the country's education and infrastructure. A good job doesn't mean hoarding the reserves and earning 4% to 5%. It means utilizing the funds and investing in the country's future - and with the right moves, hopefully make a 15% ROA over the next two decades. It is not impossible for Russia to achieve that (look at the Chinese), because they are starting from a very low base (similar to Japan in the 1950s):

http://online.wsj.com/article/SB123111421481952493.html?mod=googlenews_wsj

[diesel]

The Russian Oligarchs came before Putin so I don't think you can blame him for that. The Oligarchs were a manifestation of the dissolution of the Soviet Empire and were backed by a drunk Yeltsin and cheered on by the US State Department.

I personally think Putin has done a good job of managing the finances over the last 8 years i.e. he has paid off foreign debt and built up a decent forex reserve. Meanwhile the US has failed to invest in its schools, physical or legal infrastructure over the last 8 years, got involved in two pointless wars with no clear exit strategy, stirred up foreign relations all over the planet and also blown a huge bubble based on corrupt lending standards which benefited mostly the top ruling elites. And of course the saddest thing about all of this is that future Americans will have to pay for all of this!

The run you cite on the ruble has also played out against almost all other currencies so I don't think its fair to specifically target Russia in that context. Also I doubt China or Russia want anything to do with the financial expertise developed by the US given the outcome. I do agree with you about Russia and China relying on foreigners for aggregate demand. This should never have been permitted by the US but it seems the US industrialists wanted to keep their Asian slaves and so it was.

My feeling is that Russia is hurting but the US and Europe are dying unless they can turn this thing around soon. I also agree we should see a 30% rally here soon, maybe after a final sell off but my feeling is that it will only be a 6 to 9 month rally at this point.
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All cats are gray in the dark.

[HenryTo]

Old newspaper clipping from Davos meeting, circa January 1983:

http://archive.timesonline.co.uk/tol/viewArticle.arc?articleId=ARCHIVE-The_Times-1983-01-31-13-012&pageId=ARCHIVE-The_Times-1983-01-31-13

And then the Dow Industrials rallied 30% over the next 12 months.