Davos Notebook

In crowded Davos, keeping VIPs happy is no easy task

How do you keep VIPs — hundreds of them — happy?

You can’t, especially at the World Economic Forum. There’s no point in pulling that “Don’t you know who I am?” line here at the annual Davos gathering, which is attended by hundreds of the biggest corporate and political bigwigs.

Aides to Pakistan’s Prime Minister Yousaf Raza Gilani (including Commerce Minister Makhdoom Amin Fahim) and officials traveling with Kazakh President Nursultan Nazarbayev were visibly upset after they were refused entry into the opening plenary session. Before the same event, Senegal’s president Abdoulaye Wade and his aides were made to stand around for 15 minutes or so.

Later in the week, Belgium’s prime minister, Herman van Rompuy, was pushed aside by bodyguards to make way for British Prime Minister Gordon Brown.

Every morning, there are long queues at the security screening on the way into the conference, and CEOs who are used to whizzing past barriers must wait patiently for their turn like the rest of us.

“The forum has outgrown this place,” one participant told Reuters.

The answer, dear bankers, lies not in yourselves, but in Shakespeare

Many of the bankers blamed for the world financial crisis have been conspicuous by their absence from this year’s World Economic Forum in Davos.

They haven’t just missed conventional debate on how to prevent a re-run. They’ve also skipped the chance to hear Richard Olivier, theatre director and son of acting legend Laurence Olivier, draw comparisons between the masters of the universe and Shakespeare’s murderous tragic hero Macbeth.

“Macbeth didn’t set out to be evil,” Olivier told Reuters. On the face of it, he was the kind of bright, ambitious young man who could be trusted with big investment decisions. Equally, Lady Macbeth, who stands for “the familial culture of an organisation” thought she was just nurturing his career.

Japanese give Davos a Tokyo-style makeover

Business and political leaders congregating in the ski resort of Davos took a break from rosti, raclette and other Swiss cuisine as Japanese clothing maker Uniqlo sponsored a Japanese lunch and gave the conference hall a Tokyo-style makeover.

The six-course lunch, packed neatly in a black bento box, contained: seafood and vegetable tempura, Japanese vegetables, asparagus with beef, tofu with miso, shrimp, tuna, Japanese omelet, sushi topped with fish and grilled marinated salmon.

Participants later snapped up Uniqlo’s “manga” pop culture T-shirts handed out for free, while Japanese Prime Minister Taro Aso — here on an 8-hour trip — enjoyed a photo-op with an exhibition of T-shirts with embedded video footage of modern works by Japanese artists.

Of confidence and coconut trees

“Confidence grows at the rate that a coconut tree grows, but confidence falls at the rate that the coconut falls,” Montek Singh Ahluwalia, deputy chairman of India’s Planning Commission, told a panel in Davos.

He also indicated that India’s decision not to float its currency and to build up massive reserves was correct, noting that this gave it a cushion during the downturn.

“Floating (currencies) would be fine, if that was what was meant, but what they mean by floating is crashing upwards and crashing downwards.”

Shiller sees a new paradigm

Robert Shiller, the Yale economics professor who identified the housing bubble early, scents a profound change at Davos this year.

 ”There seems to be a paradigm shift underway in our thinking about the economy. I was surprised to see how similar other people’s thinking was to my own,” he said.

 ”The efficient markets theory really is not going to sell any more. You think about teaching an MBA class and talking with unhedged praise about the efficient markets theory you’d be in trouble. The students just wouldn’t accept it.”

Risk Takers Anonymous

An eminent scientist who studies the brain and economics thinks that the financial industry in essence became addicted and insensitive to both risk and reward.

“The finance industry was adapting to the level or risk,” said Gregory Berns a professor at Emory University in Atlanta and a leader in the relatively new field of neuroeconomics.

“It is an insidious process, and you are not aware of it. You are addicted to returns, you are addicted to risk, you are addicted to cocaine – its all the same as far the brain goes.”

Davos Today – 31st January

Watch interviews with top business and world leaders including the following:

    Abdullah Al-badri Jose Gabrielli Donald Kaberuka Eric Anderson Carl Bildt Sue Gardner Kevin Kelly Rick Goings
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Fair’s not fair, says Schwarzman (again)

Blackstone Group chairman Steve Schwarzman’s campaign against the evils of fair value accounting continued at a lunch hosted by Credit Suisse today.

He condemned fair value accounting as a “pro-cyclical” concept that “makes no sense”.

“All that matters [in private equity deals] is when you buy and when you sell – at least that was all that mattered before someone came up with fair value accounting,” he said.

Climate change – does business get it?

Climate change — and the need for governments to reach a deal in Copenhagen on limiting climate-changing emissions — has been one of the central themes of this year’s World Economic Forum in Davos.

And despite concerns that the economic crisis could push climate change down the agenda, businesses are salivating at the opportunities offered by going green.

Previously sceptical politicians and NGOs welcome business’s enthusiasm.

“Quite a lot of business has got it, and really understands that this has got to happen and are talking about really innovative things,” Barbara Stocking, CEO of Oxfam.

from James Saft:

Save capitalism from the banks – Nassim Taleb

Black Swan

Nassim Nicholas Taleb,  the author of  "The Black Swan: The Impact of the Highly Improbable", has a simple proposal to as he puts it, "save capitalism and free markets from the banks."

Nationalise the banks, limit the rewards to those who work in what he calls the "utility" part of the system and have a completely uninsured second leg that can take all the risks it wants and lose its shirt, he said in an interview in Davos at the World Economic Forum.

"They rigged the game. We pay them for their profits, there is no clawback so their incentive is to hide the risk they are taking."