Davos Day Four: America Who?

We might not be in Davos, but that doesn’t mean we won’t weigh in. A roundup of what we see as the most interesting bits to come out of today’s official sessions (and a few unofficial ones) at the World Economic Forum:

The World Is Round Again

Here's an interesting take from David Ignatius of the Washington Post on the Davos consensus, and how it has changed. In the past, Davos was all about free borders, free flow of capital and market power. But in the wake of 2008-2009, that view has changed. Now it's about the need for more regulation of unfettered capitalism. As Ignatius points out, French President Nicolas Sarkozy drew loud applause for his anti-capitalist screed at the opening of the conference--from a bunch of capitalists. But here's the catch: Sure, unfettered markets may have gone too far and lead to the resounding crash of 2008. But overfettered markets will bring new problems of their own.

New Zones for M&A

Another sign the world seems a bigger place at Davos: predictions that companies based in emerging markets will be the ones at the center of mergers and acquisitions activity this year. “Capital and savings ratios in Asia are so great, and to grow there is a need for countries like India to have Western-style governance and accountancy, and that means there will be more acquisitions," said Sadeq Sayeed, Nomura Holdings Inc.’s European chief, according to a report from Business Week. The countries to watch are well known: China, Brazil and India.

Larry Say: Relax

Forgive us for having the Frankie Goes to Hollywood song stuck in our heads when we read the following from Stephanie Flanders at the BBC.com: "Relax. That was Larry Summers' basic advice to the bankers and officials at Davos when he spoke to me last night." The point Summers was trying to make was that President Obama's prescription for financial reform didn't need to be copied exactly in other countries, and those worried the U.S. president was trying to dictate reforms should, well, relax. "We've followed what we've perceived to be the best approach, other countries have different approaches - this has always been an area where countries have had different views," he told Flanders.

Talking Climate in Davos

Senator Lindsay Graham, the sensible Republican from South Carolina (as opposed to that state's lunatic fringe of cheating governors and "you lie" shouting Representatives) believes a climate/energy bill may be in the offing, he tells Ruth Marcus of the Washington Post, at the Davos conference. Graham is key to such legislation, since he is a Republican who favors a price for carbon, but also backs such measures as more nuclear power, with its zero emissions, to get to carbon reduction. President Obama is going to need just such members of the GOP if he wants climate change legislation, because he can't count on a united Democratic Party. Graham said he was heartened by the president's rhetoric in the State of the Union opening the door to nuclear power and offshore drilling, and believed there just might be a chance for climate legislation. Here's what Marcus reports he's been telling other Republicans: "I've been telling them this is our best chance for a generation to shape and pass a good energy bill," Graham said. "I've been telling them they're crazy if they don't take it." Sounds good. But then again, the GOP these days has been known more for wild-eyed rejectionism than anything else. And Graham may yet run up against that wall.

Climate and Cash at Davos

Graham may be talking carbon costs at Davos. The IMF is talking green banking. The Wall Street Journal reports that the International Monetary Fund will launch a $100 billion green bank. The fund is meant to jumpstart economic growth, in arguably the most important area of emerging innovation in the world, and target that money to developing areas of the world.