Confidence in the global economy is steadily improving, as shown in the financial markets’ bullish behavior and confident comments from companies and policymakers over the past few weeks. Though these columns have argued in favor of a robust recovery, when investors get uniformly bullish, the pessimistic case deserves attention.
Day one in Davos showed the masters of the universe fretting about Sino-Japanese military tensions, the treacherous investment territory in some emerging markets and the risk of a lurch to the right in Europe at May’s parliamentary elections which could make reform of the bloc even harder.
Spain will sell up to four billion euros of six- and 12-month treasury bills, prior to a full bond auction on Thursday. Italy attracted only anaemic demand at auction last week and Madrid has already had to pay more to borrow since the Federal Reserve shook up the markets with its blueprint for an exit from QE.
from Ian Bremmer:
After another year of panels, colloquia, summits, meetings, whispers and skiing, the Davos emissaries headed home with a few new connections and catchphrases (“Resilient Dynamism” forever!). After four years of gloomy predictions and summits dominated by post-financial crisis concerns, this year the mood was significantly more positive. While I would argue that the pendulum of sentiment has swung too far, there are reasons to be cautiously optimistic. Based on my observations at the 2013 World Economic Forum, here’s a power ranking of who’s up, who’s down and who’s off the radar—according to Davos attendees, at least.