Dispatch from Bunker: Twists, Turns and Roads
I’m solo in the Davos bunker.
Upstairs at the World Economic Forum Congress Center it’s preparation day. There are lighting rigs, people cleaning keyboards and the espresso machines are getting test runs.
On Wednesday, when WEF 2010 really kicks off, the Congress Center will be filled with the big names of business, finance and politics. Now, there’s a lot of hammering.
And that includes the CNBC bunker room. (They are currently hanging a wall-length CNBC sign that has very little chance of being seen.)
The bunker’s a new one for us. Due to construction, the usual media village is a work in progress, so an alternative space had to be found. To ensure the appropriate mountain vistas in the background, our TV location is on the roof on the Congress Center. Web is down below. (It has its plusses: safe from nuclear fallout, and its minuses: reminder of the East Village fifth-floor walkup I struggled to hike up for a summer).
The New Twists
Change is good for the Forum. Based on the pre-WEF chatter some major themes are crystallizing—some very familiar, but with new twists.
China: For the last few years, Chinese economic strength has been a big topic. In 2009, Zhu Min, executive vice president of Bank of China, predicted that growth for China of 7 percent or 8 percent was manageable. That drew a little skepticism at WEF given the extent of the financial crisis at the time.
Now, following more than 10-percent growth, it’s grappling with keeping growth in check and boosting bank reserves. And the tightening hitting global markets.
Debt: Hopes of forgiving debt in Africa and other emerging economies was enough to bring Bono and Bill Gates together and added a Live Aid twist to what was never a big celebrity event.
For 2010 the debt concerns are in Europe, with Greece, Iceland, Ireland, Portugal all spooking investors and ratings agencies alike.
Banking: In 2009 the question was “how do we get out of this?” This year it’s “what can we do so it doesn’t happen again.” Government plans to reduce proprietary trading will be something new to debate. But bankers will still be concerned about their bonuses (last year it was performance, this year it’s tax.)
The Davos attendees will probably be a little defensive about banking reform plans, given the disproportionate representation of bankers at the conference, Morgan Stanley’s Stephen Roach told CNBC last week.
But "banks didn't (cause the crisis) alone,” Roach said. “There was a sense of shared responsibility here from central banks, regulators, rating agencies and yes, even the brilliant political overseers."
Will there be a collective mea culpa?
The Environment: It mainly looks cosmetic at the moment. The signs on the roads of Davos are promising a greener WEF for 2010. (Carpooling has always been big, but that’s more a necessity because of the temperature.) But apart from European business issues, the environmental agenda might have the longest pedigree at the meeting. In the early 70s, Jacques Cousteau spoke to the Forum on the importance of preserving the environment. I think that actually trumps Bono.
The Metaphor You Can’t Escape
Instead of the usual three-train journey from Zurich this year I was able to catch the CNBC van. There was very little difference until is was suddenly pitch black and we were careening around curves that dropped straight down in a van pulling a trailer. (I was fine until someone mentioned the end of “The Italian Job.”)
But along with talking points, market jargon and bold predictions, I think you’ll be hearing lots about roads at this WEF.
“The Road to Recovery” lends itself to so many metaphorical interpretations. Is it straight, is it curved, is it a circular track? A fork in the road, or a crossroads? Potholes, speed bumps, freeway passing lanes, traffic, construction or detours?
Curiously the CNBC-sponsored debate Wednesday is called “Back to the Future: The Next Global Crisis.”
Anybody who grew up in the 80s knows the last line to “Back to the Future.” It’s: “Roads? Where we’re going we don’t need roads.”
Someone here has to step up and be the Dr. Emmet Brown of Davos.