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Swiss misses

23 January 2015 By Jeffrey Goldfarb

It can feel like everyone who’s anyone in politics and finance is in Davos, Switzerland this week. World leaders and most of the titans of industry and finance again are swapping ideas in public sessions and over private cocktails at the World Economic Forum’s 45th annual meeting. Conversations are buzzing up and down the Promenade about rampant inequality, the European Central Bank’s plan to flood markets with money and Russia’s conflict with Ukraine. Notably missing from the Alpine retreat are the three people actually inspiring those debates.

There was no shortage of star-powered attendees. Premier Li Keqiang spoke just as China generated its lowest economic growth rate in decades. The presence of Ahmet Davutoğlu, prime minister of Turkey, signified an important return to Davos for his country five years after his predecessor stormed out of a WEF debate with Israeli President Shimon Peres. Even Swiss National Bank Chairman Thomas Jordan braved private gatherings – if not public ones – following last week’s shock decision to remove a three-year-old cap on the franc.

The absences, however, were conspicuous. Russian President Vladimir Putin’s was especially palpable after an impassioned speech by Ukraine’s president. WEF Founder Klaus Schwab invited Putin “to present his ideas about how to move out of conflict,” perhaps imagining the seeds of reconciliation like other historic accords previously struck in Davos. One of Russia’s deputy prime ministers in attendance said Putin was “preoccupied” with his domestic agenda.

Mario Draghi also could not be found roaming the halls of the Congress Centre, but his presence was felt nevertheless. As the confab kicked off, investors feverishly speculated about whether Europe’s top central banker might surprise them with a program of quantitative easing beyond the consensus expectation. When the ECB did just that, promising to begin purchasing up to 1.1 trillion euros of bonds starting in March, they moved on to ruminating over its market implications.

The spirit of “Capital” author Thomas Piketty also hovered over the festivities. On the eve of the event, anti-poverty charity Oxfam reignited the income inequality conversation by predicting that over half the world’s wealth would soon be owned by 1 percent of the population. The formal WEF program tackled the subject with at least one official session. George Soros expressed concern about central bank policies exacerbating the problem. And many of the after-hours policy conversations returned to the question of the global divide. Piketty, too, was invited, WEF officials said, but declined, thus leaving plutocrats in Davos in the uncommon position of wanting.

 

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