Davos Update: The rich are doing just fine

But first, data

We’ve had a number of economic data come out over the past few days and I think it is spooking the market.

Empire State Manufacturing Survey: The headline general business conditions index fell twenty-two points to -32.9, far below consensus estimates of -9. Anything below 0 indicates economic contraction.

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Producer Prices: -0.5% month over month vs expected -.01%

Retail Sales: -1.1% month-over-month vs expected -0.8%

Industrial Production: -0.7% month over month vs expected -0.1%

What this information tells me is 1) both inflation and economic activity are declining in tandem, and 2) inflation and economic activity are declining faster than expectations.

It’s too early to tell, but these data points might be an early indication of a hard(er) landing scenario. As usual, the data will tell the story.

Stay tuned…

Global rich gather to decide our fate

As world business and political leaders gather for the 2023 World Economic Forum in Davos to pontificate about creating a better world, we must remind ourselves: These people are raping and pillaging our planet.

According to Oxfam, since the onset of the Covid-19 pandemic in 2020:

“…the richest 1% have snatched-up almost twice as much (wealth) as the rest of the world combined.”

“At the same time, at least 1.7 billion workers now live in countries where inflation is outpacing wages, and over 820 million people —roughly one in ten people on Earth— are going hungry.”

Billionaire fortunes are increasing by an absurd $2.7 billion a day, while the rest of us are told to take cold showers and cancel Disney+ subscriptions to make ends meet. With the cost of living skyrocketing, a massive proportion of young adults have lost hope they will ever own a home, live the middle class dream or even raise a family.

Meanwhile, Rolls-Royce Motor Cars recently reported record 6,021 sales in 2022, up 8% compared to the same period in 2021.

Ironically, the programme for this year’s soiree for the filthy rich explores how to deal with the interconnected existential crises the Davos attendees are bequeathing the rest of humanity.

Presumably, Davos attendees won’t take personal accountability or initiate changes that affect their own wealth – e.g. strengthened government regulations, higher tax rates. Instead, the patronizing final communique will placate us unwashed masses with anesthetizing spin and steps to be a better citizen.

The news media will eat it up and quickly move on.

The Davos 2023 programme is tantalizingly candid, yet lacks self awareness:

The world today is at a critical inflection point. The twin triggers of the COVID-19 pandemic and the war in Ukraine rattled an already brittle global system. Economic growth in the world’s largest economies is stalling, while navigating headwinds from rising food and energy prices. For the first time since the 1970s, the world is facing a precarious disequilibrium with growth and inflation moving in opposite directions. This is occurring alongside heightened geo-economic fragmentation, financial sector vulnerabilities, including stretched asset prices and high debt levels, and a climate crisis spiralling out of control, which could magnify any growth slowdown, particularly in emerging markets. Unless these systemic and interconnected risks are addressed, the promise of a “decade of action” may become a decade of uncertainty and fragility.

Against this unprecedented backdrop, the World Economic Forum is convening its 53rd Annual Meeting in January to reaffirm the value and imperative of dialogue and public-private cooperation, not only to navigate the current cascading crises but, more importantly, to drive tangible, system-positive change for the long term.

The icing on the cake:

The basic tenet of the programme is the premise that the current crises, as serious as they are, are manifestations of larger systemic deficiencies accrued over time. They are also the result of a narrow vision of systems as sectors rather than true multidisciplinary, networked entities that are highly dynamic, particularly in the context of the meta trends of the Fourth Industrial Revolution and climate change.

Do the Davos attendees not realize they’re part of the problem? Or are they getting trolled by their own writing staff?

Before anyone accuses me of being a socialist, I’m not. In many respects the world is a better place because of free market policies, open competition and innovation.

However, I am against the consolidation of obscene power and wealth by monopolizing markets, while depending on public goods, subsidies and bailouts paid for by society.

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  1. notabilia

    You might want to read Dean Baker today over at counterpunch, who pithily rejects your fantasy about there being this chimera called “open markets” or “free competition.”
    Our global supersystem is a corporate and state-corporate rigged competition favoring, at all nodes, this capitalizer class. And this supersystem is the perfect vehicle to continue destroying all the ecological and social bases of human life. Socialism is just an aspiration, another chimera, an empty slogan for fascists to run against.
    You’ve described today’s Davos conundrum brilliantly, but, c’mon, where’s the laugh track for “to drive tangible system-positive change for the long term.”? Of course, the Baader-Meinhof gang of the German Autumn of the 70s wasn’t laughing about this stuff…


    1. Dumb Wealth

      A re-edit of the Davos speeches to include a laugh track and perhaps some comedic expressions would be quite entertaining.