The place is awash with bloggers and “tweeters”. Folk like the legendary Michael Arrington and Robert Scoble, Loic Le Meur of France and Richard Muirhead of Tideway in the UK broadcast continuous updates to their Twitter followers running in to the tens of thousands around the world.

However, sometimes you get caught out. I gave a presentation on the emergence of the semantic web as the next generation of the web, and to grab the audiences attention and make the point that this shift to the semantic web is a quiet yet incredibly powerful revolution I started off by performing a bit of Tai Chi. Little did I know that moments later it would appear on YouTube (cringe).

Some old campaigners are far more astute. At Friday’s British Business Leaders lunch, Lord Mandelson was told that it was being held under the Chatham House Rule. Looking around and spying a few high-profile journalists in the audience, he didn’t fall for it for a moment, particularly when one of the journos ask “Lord Mandelson, do you think the pound has fallen enough?”

Some sessions are definitely on the record though. Many sessions have an official rapporteur whose job it is to try to summarise an often complex, fast moving hour-long dialogue into a pithy one-page summary. This morning I spoke at a session on whether the Internet itself is at risk, alongside Dave DeWalt, CEO of security company McAfee, Mitchell Baker, Chairperson of Mozilla Foundation, Professor Jonathan Zittrain of Harvard Law School and Andre Kudelski, Chairman of the digital security Kudelski Group.

We had a lively conversation, including contributions from folk in the audience such as Craig Mundie, Chief Research & Strategy Office of Microsoft and Howard Dean, former Chairman of the USA Democratic National Committee. Acronyms flew in every direction—identity theft, routers, botnets. The poor old rapporteur came up to me afterwards asking for a card “…in case I have to clarify anything.”

“….oh and by the way” she continued “you have nice dimples”.

Tom Ilube is chief executive of Garlik, who advise on security on the net

Be wary of the extrapolation disease, however. As the severe recession call is now validated by actual and prospective trends on the real side of the global economy, many forecasters are now presuming that these unusually steep declines are a portent of the carnage that will endure for quite some time. My dear friend Martin Wolf’s proto-depression scenario is predicated largely on such a presumption.

Far be it for me to make the bull case on this tough global business cycle. In fact, I am just as bearish as I have ever been—especially with respect to my call for a Japanese-like multi-year shakeout for the United States. At the same time, I don’t think it makes good sense to view steep declines as the norm in this recession. My reasoning has to do with the American consumer—the heart of the post-bubble collapse in the US economy. In real terms, personal consumption has just recorded the sharpest back-to-back quarters of contraction in the modern post-World War II era—a 3.8 per cent decline in the third quarter of 2008 followed by a 3.5 per cent drop in the fourth quarter. In the past 60 or more years, there have been only four other instances of back-to-back quarterly declines in US consumption. In none of those instances, did both drops have “3- handles.”

Yes, American consumers still remain highly vulnerable to further weakness. They are saving short, overly indebted, and battered by twin wealth shocks to property and equity investments. And they are getting squeezed on the income side by mounting job losses and further compression in real wages. But experience tells us that US consumption habits are “sticky” as a powerful lifestyle defense motive imparts a certain inertia to spending habits. Once Americans have experienced the joy of watching television on a big-screen plasma set, they don’t go back to a black and white box!

Yes, there is a good deal more to come in the US consumption adjustment. The consumer spending share of real US GDP has only come down only one percentage point to 71 per cent from its record high of 72 per cent hit in early 2007. Mean reversion back to pre-bubble norms suggests a further drop to around 67 per cent. On that basis, only 20 per cent of the multi-year adjustment has occurred. But the stickiness of lifestyle adjustments suggest that subsequent consumption declines should be more modest than those which occurred in the final two quarters of 2008. If that’s correct, the severity of the US recession could also be tempered for a while as well. And if production is lifted to bring de-stocking to an end—a normal development in any recession—I wouldn’t even rule out a positive sequential growth comparison at some point in the second half of this year.

In short, the US business cycle is now being dominated by the post-bubble adjustments of the American consumer that I have long thought would come into play. For that reason alone, I would not extrapolate the severity of the recent declines in US GDP into the foreseeable future. This recession is likely to be known for its duration rather than its depth. Yes, it feels like a firestorm right now. But there should be more ebb and flow in the quarters—and years—ahead. Just ask Japan.

Stephen Roach is chairman of Morgan Stanley Asia and former chief economist at the bank

There’s an old saw, often used in government circles, that when it comes to public policy debates, if you’re not at the table, you’re certain to be on the menu.

The bankers have learned that lesson this year. Their low-key presence has itself achieved a high profile in the public prints. In their absence all the world’s problems have been laid at their door. No one would deny that in this economic car crash a high percentage of the blame should be ascribed to the financial sector. But not 100 per cent, I think. Bank salaries were exaggerated, definitely, but others benefited from the boom also, and should similarly have known better. There is an irony that an event strongly supported by finance should have bitten the feeding hand so firmly.

Second, some new words and phrases have entered the vocabulary: deglobalisation, for example, and financial mercantilism—both unwelcome arrivals at the Davos party. They weren’t invited, but muscled into many debates, without a World Economic Forum badge. Will they come again next year? I suspect so. Indeed it would be better to address those issues more explicitly. The costs of national approaches to global problems will be seen in the coming months.

Finally, the significance of the April G20 summit in London has grown. There is clearly a need for more global co-ordination of policy responses. Gordon Brown has been here in the last two days, emphasising the ambitious agenda he has in mind. He has raised expectations, so delivery will be crucial. He knows it, but we are still in a phase when individual governments are putting forward idiosyncratic proposals. The Sherpas, led by Jon Cunliffe in Downing Street, have a job on their hands to distill some propositions that can achieve consensus.

Sir Howard Davies is director of The London School of Economics and Political Science

Not so fast, I argued—even though I have made my own career bet on just such a possibility. Yet the Asian century is hardly as preordained as the Davos consensus seems to believe. The main reason, in my view, is that the region continues to rely far too much on exports and external demand. Developing Asia’s export share hit a record high of 47 per cent last year—up 10 full percentage points from levels prevailing in the late 1990s. That hardly speaks of a true economic power that has become increasingly capable of standing on its own.

At the same time, there can be no mistaking the increasingly China-centric character of the Asian economy—another dimension of the region’s search for growth. As China boomed, the rest of Asia was more than happy to go along for the ride. Yet that dependence cuts both ways—a two-way causality that is now complicating the here and now of the Asian century. The China boom was itself very much tied to the record surge in global trade. But now with global trade contracting, China’s export-led impetus has been quick to follow.

This has hit the rest of China-centric Asia extremely hard. The December export comparisons were nothing short of terrible for the other major economies in the region: Taiwan’s exports were down an astonishing 42 per cent year-on-year, with the Chinese piece off 56 per cent; Japan’s exports plunged 35 per cent, with the Chinese piece off 35 per cent; and Korean exports fell 17 per cent, with the Chinese piece also off 35 per cent. In all three of these cases, China had become each country’s largest trading partners in recent years—accounting for 28 per cent of total Taiwanese exports, 23 per cent of Korean exports, and 16 per cent of Japanese exports. The old adage deserves to be modified, accordingly—when China sneezes, the rest of Asia gets a pretty big cold.

I am convinced that the Asian century is coming. But the risk is that it may take a lot longer than we would like. All this underscores the biggest test to the Asian century—the ability of the region to stand more on its own in the event of any type of external shock. The recent export collapse puts the region on notice that its agenda is far from complete. Until export-led growth gives way to increased support from private consumption, the dream of the Asian century—and one of the most vivid of all the Davos dreams—is just that. As for me, I’m still willing to live that dream. Time to go back to Asia.

Stephen Roach is chairman of Morgan Stanley Asia and former chief economist at the bank

At a lunch meeting yesterday, filled with investors, technology journalists and entrepreneurs, the main topic was “where will the money go and what kinds of companies will get funded in this environment.”  As mentioned in my prior posts, I think this is a very good time to start a company, although not for the faint of heart.  That said, what types of companies will attract venture capital?

In our area of focus, which is primarily business and consumer-related IT, one of the key metrics (not surprisingly) will be expected capital efficiency.  More specifically, we are looking for companies that we are confidant can create a high-velocity business model, which means providing products or services that drop in easily, create value quickly, and do not require large doses of expensive IT resources or technical expertise to utilise.

One of my partners in our Palo Alto office, Kevin Efrusy, has written eloquently about the major industry shift, which he describes as “the consumerization of enterprise software.”  Today, we all want software that has the ease of use of Google, Facebook, and Amazon.  The days of products being built by engineers, solely for end users with deep technical backgrounds and that take months to deploy are gone.  Our tolerance for products with a poor user interface is rapidly disappearing.

Going back for a moment to creating a high-velocity business model, one of the reasons that the area of cloud computing (described in my prior post) is interesting to VCs is that it lowers the barriers to adoption and can create quick time-to-value for many customers.

Consumer internet companies will face far more scrutiny regarding their monetisation models (i.e. they’ll need to demonstrate they have a clear blueprint for building a valuable business with achievable projections on revenue growth and profits).  Hope is not a business model.

The next few years will not be easy, but I do believe that we will witness the birth of the next generation of Googles, Amazons, Ciscos and Oracles, from the crucible of this difficult market cycle.  We’re looking for big, disruptive ideas, and we’re fired up to work with the entrepreneurs that have the talent, courage, and patience to build these new category leaders.

Bruce Golden is a partner at Accel, the venture capital firm 

The response by Chen Siwei (former Vice Chairman of the People’s Congress and now Chairman of the Global Council for the Future of China), to the remarks of US Treasury Secretary, Tim Geithner, about China’s manipulation of the RMB exchange rate, can be translated as follows:

‘I don’t quite understand why he had said these unwise words, may be just to get the approval from the Senate. What I know is that he is a smart guy. I just hope he will just talk the talk and walk the walk when he is officially in office”.

The sensitivity is understandably extreme.

As I remarked in yesterday’s blog, domestic demand, rather than the exchange rate, is the real issue. The implication of my analysis, as I indicated yesterday, is that domestic demand needs to grow by at least 12 per cent a year in real terms.

A further implication is that, in current circumstances, it makes far more sense for China to have a target for the growth of domestic demand than for growth of GDP. This is an essential shift in policymaking.

It is agreed by informed observers I have spoken to here that the rate of growth of the Chinese economy in the last quarter of 2008 and first quarter of 2009 is not above 2 per cent. This is concealed in the 6.8 per cent year-on-year growth reported for the fourth quarter. Behind the collapse in growth is the weakness in exports (41 per cent of China’s exports go to the US and Europe) and real estate investment. I was told by a very well-informed Chinese economist that the fiscal boost should still deliver 7 per cent growth this year. If so, that would be remarkable.

Unfortunately, this is the wrong sort of growth: more investment, in a country crying out for higher consumption; more heavy industry, in a country desperately in need of more jobs; more state enterprise, in a country needing more private enterprise and more capacity, in a country suffering from excess capacity. China could produce 600m tonnes of steel, for example, but needs only 400m.

What is needed is a big structural shift in the economy towards consumption. Unfortunately, household disposable income is less than 40 per cent of GDP. This makes the creation of a thriving mass consumer market impossible in the short term. If the Chinese government had a demand target, as I suggest, it might address this issue more forcefully.

Two other points might be added.

First, it is not good enough to argue that China’s real exchange rate has remained roughly constant over many years (with significant fluctuations). A country with China’s characteristics – very high growth of productivity in manufacturing indeed – should have a strongly appreciating real exchange rate

Second, I am not stating that the US should abjure action forever. The rebalancing must start soon. If China remains part of the problem, it may need to be prodded. I don’t think the rest of the world can be infinitely patient on this point, however strongly Chinese officials may react.

There is a real risk of protection – maybe even an import surcharge. That was the threat from the US in 1971, when it forced appreciation of the yen and D-Mark. It could conceivably happen again. US officials should indeed cool it. But the Chinese should not assume that the issue will magically disappear if they protest enough. It will not do so.

Martin Wolf is associate editor of the Financial Times and chief economics commentator

There was a frisson in the room. The atmosphere was such that a lynch mob could have been formed for the nearest banker. That got me thinking about the conduct of some of the bankers which has ranged from gross misjudgment to selfish actions in relation to bonuses and golden parachutes which really are totally unacceptable.

Later I saw President Obama making the same point about some of the bankers and ex-bankers on Wall Street.

I do not know yet whether the chief executives of the banking world have really got the enmity that they have generated by their poor conduct.

Saying sorry is not enough. Giving back the money would be a good start and in some cases some criminal proceedings would definitely be in order.

The frenzy kicked off at the start of the week with the arrival of Vladimir Putin, Russian prime minister, who addressed the opening session of the conference. With visible pleasure, he pointed out that “the pride of Wall Street banks” had crumbled, and railed against the folly of creating an economic system where financiers were allowed to run amok with “virtual money” and other forms of financial innovation.

The comment seems distinctly rich, given that Putin’s own financial system looks rather sickly right now. Moreover, the former Soviet system hardly offered an encouraging alternative to Western capitalism either (and I say that with feeling, having personally lived in it.). But Putin is a man who can smell an opportunity as well as any Wall Street trader. And right now instruments such as CDOs have managed to inflict dramatically more damage on American might than all the poison pens or ballistic missiles the KGB ever employed, back in the Cold War days. It is a delicious, peculiar irony that not even a Russian novelist could have ever devised.

Yet Putin’s sniping has merely set the tone for much of the debate in the rest of the week. Indira Nooyi, CEO of Pepsi, for example, infuriated some financiers on Thursday when she publicly declared that there are now “two streets” in the corporate world – and blamed the financial sphere for poisoning the reputation of an otherwise virtuous “main street” business sector. (“How can she say that? She works for a company that is feeding my kids all kinds of toxic crap!” muttered one indignant banker.)  In private meetings, non-bankers have been even more scathing about the mainstream banking world. So much so, that they have even temporarily stopped bashing the credit rating agencies and hedge funds, it seems.

For the most part, the bankers brave enough to turn up in Davos at all are quietly taking it on the chin, or utterly the obligatory apologies. Yet they are drawing at least two lessons. One is the obvious one: namely that a lot of regulation is now heading their way. Take the matter of credit derivatives. Virtually the only species of financier which have been wondering around Davos looking truly chirpy this week are those who work for large regulated exchanges.

These have generally emerged from the market crisis relatively well and are now furiously lobbying to get the regulators to encourage more derivatives activity to move to the exchanges.  The bankers, are fighting back – as best they can. But it is an open guess what the policy makers will eventually do. When Jean Claude Trichet, the ECB president, was quizzed on the matter he simply said – with an enigmatic Gallic shrug – that “nothing is excluded”.

Another lesson from the Davos debates is that traders cannot expect any rapid return to “normal” in the market soon.  For the past decade or so, bankers and hedge funds have tended to devise trading strategies in the debt world (and elsewhere) based on a “reversion to the mean” assumption – or the idea that market prices will always eventually return to some rational, fundamental balance, even if they diverge from that for a while.

Yet, with the government now jumping into numerous markets, and distorting prices in utterly unpredictable ways, the concept of “mean reversion” is crumbling. Based on this week’s debates, no one expects any end to this capricious climate soon. “The socialists are taking over – and it is going to stay like that for at least the next eight quarters,” laments one savvy financier, whose group has slashed its trading positions in the last four months as a result. Putin’s appearance at the start of Davos was indeed symbolic, in numerous ways.

Gillian Tett is an assistant editor of the Financial Times and oversees global coverage of the financial markets

The absence of any senior figures from the US administration at the World Economic Forum this year has left Mr Clinton to re-occupy his place as the well-loved philanthropist and former president who represents the acceptable – even loveable – face of the US in Europe.

He is also on fine form. I was standing in the Hotel Belvedere lobby earlier this week when Mr Clinton passed through and provoked a scream of excitement from some women officials. He turned and waved cheerily at them, as if pleased that his natural place in the world order had been re-established.

Mr Clinton also received a respectful session to himself in the main Congress Centre, and played the diplomat, agreeing with Wen Jiabao, the Chinese premier, that the US was the place where the financial crisis had started and “the house in on fire and we need to put it out as fast as we can”.

Not only that, but an invite to the Clinton Global Initiative’s party at the Kirchner Museum was sought after, as Gideon Rachman noted ruefully this morning, and Mr Clinton was the most impressive speaker at the philanthropy lunch that I attended yesterday.

It is an interesting question as to whether he would have regained his stature quite as fast if his negative campaigning in the Democratic primary last year had actually had the intended effect, and brought down Mr Obama. But the fact that he was ineffective has allowed him to return to the status quo ante.

John Gapper is the FT’s chief business commentator

The great thing about being Roubini is that not only is he now widely hailed as cleverer than everybody else – he is also able to imply that he is morally superior and more courageous as well. Part of the current Roubini patter is that many other analysts got it wrong because their judgement was clouded by conflicts of interest. Others, he thinks, lacked the intellectual courage to consistently stand out from the crowd. This makes him sound like an arrogant sod. Maybe so – but he is also appealingly dishevelled and quite funny.

Those are not words I would apply to Vladimir Putin. I went to an off-the-record thing with him yesterday so – apologies – I cannot reveal the not-very-startling things he said. But watching him at close quarters is rather fascinating. He is small, extremely fit-looking, with piercing blue eyes and a nice line in mirthless laughter. As a colleague put it to me later, “I wouldn’t want to be in a room with just him and a bare light-bulb.”

Putin, however, has been upstaged by the great Erdogan walk-out. The Turkish PM’s tantrum in his shared session with Shimon Peres is now the story of this year’s Davos. My personal sympathies are with the moderator, David Ignatius of the Washington Post, who is now being conveniently vilified by all and sundry for not keeping the panel under control. Still, at least he’ll get a column out of it.

This moderation thing is a bit tricky. On the one hand, it is obviously an honour and it is gratifying to be on stage – rather than sitting in the audience. On the other hand, it involves irritating things, like preparation. And – as Ignatius just discovered – it can all go wrong.

I am going to get my turn at moderation this afternoon – when I am doing a panel on Nato. One of the stars was meant to be Ali Babacan, the Turkish foreign minister, but he has been forced to stalk out of Davos in a pretend huff, in the wake of his prime minister. A shame, but given the Turks’ current mood, it might make the session a bit easier to control.

Gideon Rachman is the FT’s chief foreign affairs columnist