No-nonsense Putin
Delegates have been complaining about robust treatment at the hands of
Vladimir Putin's formidable security detail. Unlike most leaders, who wander
round with a handful of aides, the Russian Prime Minister is escorted by a
fearsome army of bodyguards who tend to move at a brisk pace, shoving
delegates who inconveniently clutter the precincts out of the way.
Herman Gref, the former Russian Economics Minister, continued the ferocious
attack on the West's handling of the crisis started by his ex-boss Putin.
Strangely, Mr Gref absolved the banks and credit-rating agencies for
creating the mess, which he blamed solely on the regulators, much to the
relief of Gary Cohn, president of Goldman Sachs, who was sitting next to
him. But Mr Gref baffled his audience by switching to climate change. As the
“world emissions centre”, America was putting its own interests ahead of the
rest of the globe he said. It later became clear that this had lost
something in translation: he was referring to the Federal Reserve flooding
the world with Treasury bills, not greenhouse gases.
Be afraid, be very afraid...
David Cameron, the Tory leader, seems to have developed an odd idea of what
kind of leader might appeal to an anxious British public. Speaking in a
debate on leadership qualities, he suggested that good leaders needed to be
“like sharks”. His idea referred to the fact that if sharks stop moving they
die. Fretful Brits may well fear the present crisis has seen them suffer
quite enough of sharks.
Turkey's conquering hero
This year's muted talks got their first injection of real drama on Thursday —
courtesy of the politicians. Turkey's Prime Minister, Recep Tayyip Erdogan,
stormed off stage during an impassioned debate over Gaza. Mr Erdogan was cut
off by the moderator while attempting to reply to a wordy diatribe by
Israel's President Peres. “You are killing people,” he declared. Mr Peres,
finger pointing, replied that he would have done the same if rockets were
falling on Istanbul. After the moderator cut him off, Mr Erdogan stormed
from the stage, declaring he would never return. Klaus Schwab, the Forum's
chairman, swiftly convened a press conference with the tantrum-throwing
Turk.
Obama's "representative on earth" makes good impression
Valerie Jarrett, the doughty aide to President Obama and one of the new US
commander-in-chief's closest aides, left Davos participants enthused by the
new incumbent of the White House distinctly underwhelmed with her appearance
in the Alps as Mr Obama's “representative on Earth”. Jarrett delivered a
bland speech talking of how Mr Obama promised hope, trust and responsibility
that left delegates muttering about “propaganda — even if it's propaganda we
like” and “motherhood and apple pie”. He'd hardly want to represent despair,
mistrust and irresponsibility, would he?
There's always one...
Ben Verwaayen, chief executive of Alcatel-Lucent, seems to be trying, very
hard, to lift the gloomy mood in Davos this year. The wacky funster said:
“There is less chit-chat and more serious stuff. … [Also] the croissants are
better this year.” All he needs now is a novelty tie and he’ll have the
Davos delegates crying – with laughter, of course.
Playing the Davos Blame Game
Who can blame Barack Obama for not attending the Davos world economic summit,
when everyone is piling into the new game in town - blaming America for
causing the global financial crisis?
Russia and China started it, using the opening speeches to lambast
America for bingeing on debt. At least, the audience assumed it was America Wen
Jiabao, the Chinese premier, was talking about when he alluded to
“inappropriate macroeconomic policies of some economies", before
launching into a tirade against “prolonged low savings and high consumption”
and “excessive expansion of financial institutions in blind pursuit of
profit and the lack of self-discipline among financial institutions and
ratings agencies”.
Vladimir Putin, the Russian prime minister, said he wasn't going to
criticise the US, but did anyway.
He said: “I just want to remind you that just a year ago, American delegates
speaking from this rostrum emphasised the US economy’s fundamental stability
and its cloudless prospects. Today investment banks, the pride of Wall
Street, have virtually ceased to exist. In just 12 months they have posted
losses exceeding the profits they made in the last 25 years. This example
alone reflects the real situation better than any criticism."
Even Mr Obama's Democrat predecessor got in on the act. Former president Bill
Clinton may just have been trying to make friends with Mr Wen for the
sake of his wife, the US's new foreign policy supremo, but did he really
have to say: “The Chinese premier was right: It all started in the United
States. America has to lead the way”?
Then he went off into a private room with Mr Putin for a 90 minute
vodka-fuelled tete-a-tete.
Earlier the noted financier George Soros laid into the US Treasury and
the Federal Reserve for triggering meltdown by failing to save Lehman
Brothers. "How could Lehman have been left to go under?" he
railed. "The responsibility lies squarely with the financial
authorities, notably the Treasury and the Federal Reserve. The claim that
they lacked the necessary legal powers is a lame excuse. In an emergency
they could and should have done whatever was necessary to prevent the system
from collapsing. That is what they have done on other occasions. The fact
is, they allowed it to happen."
John Neill, chief executive of Unipart, declared that it was all the
fault of the (mainly American) bankers who invented complex financial
instruments. "If you knowingly make other kinds of toxic products, you
go to jail. Why should bankers be different?" he asked, earning one of
the biggest rounds of applause of the conference.
Amid apocryphal reports that those US bankers who were attending Davos were
wearing dark glasses and false beards, Klaus Schwab, the founder of
the annual economic and political summit, made a somewhat double-edged plea
for the rest of the audience to show a little love. "Those people, and
there are many of those here, have the feeling they are standing at a cliff
and they may fall over at any moment. But those people are not only part of
the problem. They are part of the solution," he urged.
One banker who did put his head above a parapet was Jamie Dimon, the
head of the JPMorgan investment bank, who promptly accused Mr Obama and his
government of talking down confidence. “JPMorgan would be fine if we stopped
talking about (the) damn nationalisation of banks,” he said.
Mr Dimon did admit bankers had done “some really stupid things”, but quickly
added that in any case the Basel II banking rules were flawed and the
regulators weren't doing anything about it. “I haven’t yet seen people get
all the right people in a room, close the damn door and come out with a
solution,” he complained.
Kind hearts and big losses
The most heart-warming message to emerge from Davos so far this year came from
Jet Li, the Chinese action film actor. The star of Lethal Weapon 4 and The
Mummy: Tomb of the Dragon Emperor, told delegates at a session with our very
own Tony Blair: “I am not here to ask you for your money. I am here to ask
you for your hearts.”
He then added: “Even if you have a million, you would still think it was not
enough”. Surely this is a sentiment that many of the bankers slated to
attend Davos this year would agree with - if they hadn’t already been fired
for losing billions.
Clinton and Putin get up close and personal
Just days short of his wife’s confirmation as Secretary of State, former US
President Bill Clinton has been embroiled in some active diplomacy of his
own, holding a series of private meetings with foreign leaders after his
arrival at Davos yesterday, culminating in an intense late-night discussion
with Vladimir Putin over vodkas at the Russian prime minister’s private
party at the Sheraton. Mr Putin greeted Mr Clinton as "our good friend"
and toasted him with vodka before the pair disappeared into a private room
for almost 90 minutes. What could they have found to talk about?
Rule Britannia and yah boo! Jim Rogers
Excitable talk from Jim Rogers, the former sidekick of George Soros, and
others, that Britain is a busted flush and that the Britannia that once
proudly ruled the waves is rapidly sinking under them, has not stopped the
UK from flying the flag proudly over the Davos gathering. A vast image of
the Union Jack was being projected in splendid fashion on the side of the
Swiss resort’s flagship Belvedere hotel, which towers over the official
Congress Centre. As presidents, prime ministers and the bosses of
multinationals filed into the World Economic Forum’s open soirée, a Union
Jack soared over their heads, the size of the side of a barn. Mr Soros, who
said that he had had “no relationship” with Mr Rogers for many years,
suggested that the pound had fallen far enough. Mr Soros is no longer
betting against sterling. So there may be life left in Blighty yet.
The discreet charm of Goldman Sachs
Much has been made of the fact that Goldman Sachs has cancelled its annual
Davos drinks party. It has also trimmed the number of executives it has sent
– but don’t think that Goldman is ignoring the best networking opportunity
of the year. Its people are just being discreet. And clients shouldn’t
worry. It is going ahead with its usual private dinner, which is said to be
lavish. In a very tasteful way, of course.
Wrong sort of weather holds up bad news
Davos delegates fretting over the fate of the world’s economy and the global
financial system in the appropriately grey and icy conditions of the Swiss
mountains had to wait for yesterday’s bleak forecasts from the International
Monetary Fund to inform their debates. The IMF was forced to delay unveiling
its assessment of prospects due to what it said were “severe icing
conditions” in Washington. If the Gods are conveying a metaphorical message
on the outlook with the weather, then it is time to batten down the hatches.
Sitting at the rich man's table
Some surprise at the presence of Barbara Stocking, chief executive of Oxfam,
at Davos, although it is apparently not the charity’s first visit. Should
she be spending donors’ money mixing it with the bosses of our richest
companies? A source says: “Companies – and 41 heads of state
this year. We go because it’s an opportunity to talk to them about a lot of
issues we think are important. It’s a valid dialogue.”
Pop!
This year has seen the reappearance of the collar and tie, as befits the new
humility. The open-neck look is so 2008. And Laurent-Perrier, rather than
Dom Pérignon and Krug, is on the drinks menu. Times are hard.
Quote, unquote
“Boring is good. We are fine. Why are we fine? Because we became very boring.
We didn’t go for exotic investments, so now we know that there is no way
back and we have to move forward.”
Lord Levene of Portsoken at the CNBC “No Way Back” debate
