CNBC's James Cramer likes to say that there's always a bull market somewhere. When one sector or region is down, the theory goes, another always seems to be up. At the World Economic Forum in Davos, however, the only bull market was in pessimism. It was the 39th such gathering. But by the sound of things, it may well be the last. On the Promenade—Davos's main drag—a woman accosted me, asking if I knew what was in Revelation and wondering if I had been inscribed in the Book of Life. Historically, such apocalyptic thoughts have been rare at this happy hour for the world's financial and political elite. Davos Man is an optimist by nature and profession. Ordinarily, self-assurance is so thick in the resort town you can cut it with a Swiss Army knife. But the only place I saw people laughing in the face of danger was on the sparsely populated ski slopes.
Armed with a notebook, BlackBerry, flip camera and laptop, I mounted a 72-hour effort to locate an optimistic, self- assured CEO. A PriceWaterhouseCoopers survey of CEOs, released on the eve of the World Economic Forum, found that only one in five (21 percent) was confident his or her revenues would rise in the coming year. In theory, at least a few members of that minority should have been at Davos. Only those who have successfully negotiated the raids are here.
Yet many CEOs bore the harrowed looks of survivors of the Donner party. Once they trickled in, many having endured the indignity of flying commercial for the first time in years, they were treated to an avalanche of doomsaying. Voices from hedge-fund manager George Soros to historian Niall Ferguson spun elaborate tales of catastrophe. Ferguson boldly concluded that the U.S. was destined for a decade of extremely lame growth. Economists were universally downbeat, which isn't totally surprising. (They don't call economics the "dismal science" for nothing.) But this year, those who had successfully predicted the debacle, like Nouriel Roubini, New York University's Dr. Doom, were elevated to prime speaking slots. Hot trends tend to suck up a lot of the oxygen in the thin air of the Alps. Last year, the chic topics were sustainability and decoupling—the notion that developed markets could boom even if the U.S. stalled. This year, failure and depression were smoking.
CEOs were easy to spot by their casual dress. In one of the strange anthropological twists of Davos, the more you make the more you dress down. Journalists and intellectuals, thinking they're going to be around a lot of CEOs and money managers, wear suits and ties. CEOs and money managers, thinking they're going to rubbing tweed-patched elbows with journalists and intellectuals, dress down. But the encounters I had with CEOs made me feel as if I were an undergraduate reading "Waiting for Godot" again: lots of non sequiturs, uncomfortable silence and existential angst.
At a dinner for CEOs in the mobility industry—airlines, autos, logistics— participants joked about passing hemlock around the table instead of butter. Best Buy CEO Brad Anderson, whose biggest competitor, Circuit City, is in the process of liquidating, put on a brave face. "You know, I'm a congenital optimist," he said. "But in the short term?"
I asked one private-equity titan if he knew any optimistic CEOs. "Steve Schwarzman is pretty upbeat," he said, which was likely intended as a dig at a rival. Stephen Schwarzman, CEO of the Blackstone Group, has seen his company's stock fall about 75 percent in the past year. When I found Schwarzman, I asked him and a colleague if they knew any optimistic CEOs. The response: Turkish manufacturers seemed to be holding up, and maybe Indonesia. "Look for an Indonesian," Schwarzman recommended.
I didn't find any upbeat Indonesian CEOs. But the CEO of an Indian manufacturer said the financial crisis was bringing down the costs of his supplies. Reid Hoffman, CEO of LinkedIn, a networking site for professionals, said he expects revenues and employment to rise in 2009. "Networking is cycle-resistant," Hoffman said. "It was interesting to see all the people from Lehman Brothers join" after the company went bankrupt in September.
Ditlev Engel, CEO of the Danish wind-turbine maker Vestas, was likewise cautiously optimistic. The U.S. market, already the largest for wind energy in the world, may be poised to get bigger with the prospect of more mandates and incentives for alternative energy. (Insert your own joke about a perennial bull market in wind at Davos here.) Vestas is opening plants in Colorado, and plans to boost employment in the U.S. from 1,300 today to 4,000 by the end of 2010. "I could bring a lot of subsuppliers from Europe to China to support our investments there."
In a gathering marked by the absence of U.S. political leaders—adviser Valerie Jarrett was the highest-profile member of the Obama administration in attendance—few summiteers had the audacity to hope. The overwhelming consensus was things are really bad and getting worse. But that, in and of itself, may provide a glint of optimism. At one session, one of India's wealthiest men noted, "Whatever the consensus at Davos has been over the last many years, is never right."