Davos World Economic Forum 2008

[sharon sanders]

Videos:

http://www.weforum.org/en/fp/videos/videos_AM08/index.htm


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In what ways can the private sector contribute?

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[gsgs]

Re: Davos World Economic Forum 2008

$600 billion
by far the two largest considered risks by weforum :
$600billion (!!) expectation value of damage due to

? House and other asset prices collapse in the US, United Kingdom and continental Europe,
reducing consumer spending and creating a recession.

$210billion expectation value of damage due to

? Multiple developed economies take steps (tariffs, WTO disputes) which slow existing trade and further
undermine talks on increased global integration.

(pandemic accounts for $35billion)

well, it's 20% likelyhood and damage > $1000 billion
so expectation value of $200 billion.
I assumed the average progression
from one level to another, so that would be $2115 billion for the next
level, but since there is no limit and all the subsequent
levels are included in this too, I assumed $3000 billion.

But as I said, I don't see this.
Falling prices for houses "and other assets" are hardly
any damage to the economy at all.
It's bad for the potential sellers but good for the
potential buyers. And smaller prices for goods is advance,
is progress - it's what the economy, the research is seeking for.

 

[gsgs]

Re: Davos World Economic Forum 2008

(level),probability,economical damage,deaths: 

(1),<1%,$5e9,4e3 
(2),1%,$1e10,8e3 
(3),3%,$3e10,2e4 
(4),5%,$5e10,4e4 
(5),7%,$1.3e11,1e5 
(6),10%,$2.5e11,2e5 
(7),15%,$5e11,4e5 
(8),20%,$1e12,1e6 
(9),>20%,>$1e12,>1e6

a:risk name
b:probability level for 2008
c:economical damage level for 2008
d:deaths level for 2008
e:probability level for 2007
f:economical damage level for 2008
g:deaths level for 2008
h:expectation value of damage in 2008 (in $1e9)
i:expectation value of damage in 2007 (in $1e9)


a                                                  bcd efg     h      i
--------------------------------------------------------------------------- 
blow up in asset prices/indebtedness               89  79      600    450 
trade retarding                                    59          210    0 
oil price shock                                    77  77      75     75 
China hard landing                                 67  77      50     75 
middle east instability                            765 865     37     50 
chronic disease in developed world                 767 857     37     26 
pandemics                                          579 377     35     14 
breakdown of critical information structure        661 561     25     17 
violence in Iraq                                   946         20     0 
heatwaves                                          653         13     0 
US current account deficit                         65  55      13     9 
retrenchment from globalization                    65  49      13     150 
climate change                                     654 55      13     9 
interstate and civil wars                          557 677     9      50 
..US/Iran conflict                                 555         9      0 
transnational crime and corruption                 551 663     9      25 
liability regimes                                  55  55      9      9 
rising and volatile food prices                    559         9      0 
failed and failing states                          746 746     7      7 
..US/Korea conflict                                455         6      0 
coming fiscal crisis caused by demographic shift   45  35      6      3 
infectious disease in developing world             459 549     6      3 
..in Afghanistan                                   833         6      0 
earthquakes                                        357 35      3      3 
tropical storms                                    355 35      3      3 
conflict in occupied territories                   543         3      0 
loss of freshwater                                 534 645     2      5 
international terrorism                            533 732     2      4 
flooding                                           344 343     1      1 
proliferation of WMD                               623 630     1      3 
..Latin America                                    331         0      0 
..in Horn of Africa                                713         0      0 
..US/China conflict                                    67      0      50

 

[gsgs]

Re: Davos World Economic Forum 2008

http://www.bloomberg.com/apps/news?pid=20601087&sid=a5B.ffRG4SDc&refer=home

Oct. 24 (Bloomberg) -- Once upon a time, the World Economic Forum was the ultimate Wall Street jamboree.

Now, in the riptide of the worst financial crisis since the Great Depression, WEF officials and delegates say many of the chief executive officers who gathered in Davos, Switzerland, over the last five years didn't listen to warnings from their peers. Davos organizers also say they failed to play tough with the financial-industry bosses, opting to accept their funding and let them turn Davos into a rave-up for Wall Street excesses.

``The partying crept in,'' says Klaus Schwab, the 70-year- old WEF founder and executive chairman. ``We let it get out of control, and attention was taken away from the speed and complexity of how the world's challenges built up.''

 

[gsgs]

Re: Davos World Economic Forum 2008

googling
site:http://www.weforum.org "credit default swaps"

gave exactly one hit: this graphic from a .pdf:

http://magictour.free.fr/cds3.JPG

 

[gsgs]

Re: Davos World Economic Forum 2008

I never understood how falling US-house prices could present such a big risk.
Aren't falling prices good ?

Well, now I see that they can indeed cause some trouble,
but I still don't see why.
And I wonder whether the politicians and economy experts really
understand this all.

What about FT-members ?
Do you feel that you understand what is going on
with the financial crisis ?

 

[sharon sanders]

Re: Davos World Economic Forum 2008

The world economy is very complex and I do not think anyone understands it - including most of the world's financial experts.

What is happening to the markets now is a vicious cycle. As the stock (equities) prices go down, more funds and others have margin calls and losses and they need to raise cash.

They sell more stocks to raise this cash which drives the prices of the stocks down even more. As the price of stocks go down more funds and others have margin calls and losses and.......

 

[gsgs]

Re: Davos World Economic Forum 2008

$600 billion
by far the two largest considered risks by weforum :
$600billion (!!) expectation value of damage due to

• House and other asset prices collapse in the US, United Kingdom and continental Europe,
reducing consumer spending and creating a recession.

...
Falling prices for houses "and other assets" are hardly
any damage to the economy at all.
It's bad for the potential sellers but good for the
potential buyers. And smaller prices for goods is advance,
is progress - it's what the economy, the research is seeking for.

... and now we have the crisis, and commentators attribute it to falling
house prices.