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Does Davos Always Get it Wrong?

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QUESTION: Summers has also come out and expressed that whatever forecast comes out of Davos is wrong. How can there be this conspiracy that the elite are in control of anything when they always do get it wrong?


ANSWER: The majority is always wrong because they tend to talk among themselves and reaffirm their own opinions. I think they call me in just to see if I have changed my mind because I have been the counter-view of the world economy to what is typically discussed among those people who believe they are in power but are not.

The Repo Crisis is something these people remain clueless about. They do not even factor it into their thinking. I believe in part because they all lack the experience. I truly believe that the only people qualified to run any central bank or treasury function are those who have been either independent hedge fund managers or had to work on the front line of a dealing desk in currency and/or bonds. I am not talking about their boss who was on the board. They typically have no experience and the trader has to pitch an idea to them in laymen terms, speaking fundamentally, for they are usually unfamiliar with either technical analysis or cyclical analysis.