No crisis can last forever, and the main lesson I’m taking from the 2014 World Economic Forum is that, at least as far as the world’s elite are concerned, we’ve finally put the financial crisis behind us. There are still a lot of things to worry about, of course, both political and economic. But this was by far the least economically interesting Economic Forum I’ve been to.
This year’s Davos was all about tail risk — or, more to the point, the absence thereof. The ECB’s Mario Draghi said — more than once — that he had “removed the tail risk from the euro”. His colleague Ignazio Visco went almost as far, saying that only a few tail risks remain. The EU’s Olli Rehn talked about how there’s “no tail risk” any more. The IMF’s Zhu Min said that “In Europe, the tail risk has been moved off the table”, which was exactly the same language also used by Ray Dalio. Bank of America CEO Brian Moynihan said that “euro tail risk is now sorted”. The FT editorialized about the best policy response when “the tail risk of renewed financial chaos is reduced”. Even Nouriel Roubini declared that tail risks have declined in the past six months, although they haven’t gone away. And that was just the on-the-record comments: off the record, many more people, including at least one official US representative, were saying the same thing.
Andrew Ross Sorkin has placed himself on the party beat at Davos: since nothing has happened yet, the main thing to report is that everybody’s Friday-night dance card is looking pretty forlorn. The Google party being canceled we could live with, but the cancellation of the Accel party is bigger news — people really loved that one. Yahoo’s cocktail party early in the evening isn’t going to make up the difference, and Sean Parker’s nightclub event, while surely hard to get in to, is certainly going to turn into the kind of loud and overcrowded sausage party that makes you wonder why you even wanted to go there in the first place.
Bloomberg has just found out that the big Friday-night Google party, one of the hottest and loudest and most gruesome events in the annual Davos calendar, is not happening this year; no one is going to miss it. No reason was given for the decision to cancel the party, but the message is a clear one: Google has matured, now, and is going to be a lot smarter about the way it schmoozes Davos.
Nick Paumgarten was told repeatedly, both before and during his first trip to Davos, that he couldn’t possibly get it right after going only once. But he had to try, and he ended up delivering what might be the best description of Davos yet: accurate, well-written, keenly observed.
If you’re Europe, and your struggling people are called “Greeks”, and your rich people are called “Germans”, then the World Economic Forum will spend pretty much limitless amounts of time and effort on attempts to understand the dynamics between the two and (doomed) plans to try to prevent it from turning into a fully-blown crisis.
I got a glimpse this morning of what Lance Knobel calls Davos’s “class distinctions, even if you have a white badge” — I was invited to a breakfast meeting under the auspices of something called the Industry Partnership Meeting for Financial Services. Which reminds me of that great line from In the Loop :