Paging Dr. Freud: Schizophrenic Reports on Mood of Davos Man
Normally, your humble blogger is of the school that the less attention given to “Davos,” as in the annual World Economic Forum meeting in Davos, Switzerland, the better.
But the Financial Times wanted to make sure its readers knew damned well how important the mood of our billionaire wannabe masters is. This was the lead story for most of the day:
One reason for cheer might be that the top wealthy see plenty of opportunities to loot the rest of us:
However, if you read the pink paper’s Davos writeup, the happy talk is coming from the event’s speakers, and include people like Ursuala von der Leyen and Olaf Sholz, who want you to believe that the war in Ukraine and Western sanctions on Russia are working out swimmingly, as well as Chinese officials who are selling the idea that the Chinese Covid mass infection plan will put China on a growth path….when for the US, which seems better able to shift a lot of work to home settings, the picture hasn’t been been rosy. And that before getting to the serious risk of long-term damage to health and longevity, and resulting loss of labor contribution versus rises in medical costs. From the story:
Business leaders and top government officials have expressed optimism about the global economy as China drops coronavirus controls, the US embarks on a green investment boom and western Europe adjusts to the impact of Russia’s war in Ukraine.
At the World Economic Forum in Davos, Gita Gopinath, deputy managing director of the IMF, signalled that the fund would upgrade its economic forecasts. Instead of predicting a “tougher” 2023, she now expected an “improvement” in the second half of the year and into 2024.
Positive data from Europe and the US in recent weeks have boosted hopes that the world’s economy will avoid a recession this year.
Germany’s chancellor, Olaf Scholz, told Bloomberg that the eurozone’s largest economy would avoid a recession, while the Mannheim-based think-tank ZEW said its monthly gauge of investor sentiment had turned positive for the first time since Russia’s invasion of Ukraine.
One could argue that the improved mood was due to the big fall in gas prices, which is due among other things to warm weather, stockpiling of Russian gas, big output cuts by energy intensive industries, and borderline recessionary conditions due to central bank bloodymindedness. A reduction in pain levels is not a strong platform for gains.
However, some outside the Davos bubble also see upbeat signs in the tea leaves. For instance, from Menzie Chinn:
But it appears the Wall Street Journal attended a different conference than the Financial Times did:
