Davos Diary / Depression, denial and acceptance

If, during the first 24 hours, one might still be able to believe that the suits at the World Economic Forum in Davos were issuing pessimistic statements mainly as a way of demonstrating solidarity with the rest of the world, now it is clear: The executives are apprehensive, fearful and depressed.

There were a few psychologists who compared their behavior with people who have just been told they have a terminal disease, or are forced to quit taking heroin cold turkey: First comes the stage of denial.

It is followed by anger, bargaining, depression and eventually acceptance, at which time treatment can begin.

Kenneth S. Rogoff, a professor at Harvard University and former chief economist of the International Monetary Fund, says that the big guys are suffering from post-traumatic stress and are now in the acceptance stage.

One of the stars at Davos this year is actually a historian: Prof. Niall Ferguson, who teaches economic history at Harvard, was one of the few people who saw the banking collapse coming.

A year ago he advised his clients - it turns out that hedge funds hire historians to work as advisers - to sell all their investment house stocks, including Goldman Sachs, at a loss.

Ferguson argues that the conduct of company managers proves that they are still in the denial stage.

President Shimon Peres was not among those who warned of the coming collapse, but he nevertheless was given several opportunities to speak over the weekend and took advantage of them.

One such occasion was the traditional Friday night dinner at the heavily guarded Arabella Sheraton Seehof Hotel, where he presented Israel's version of the recent war in the Gaza Strip.

Former Bank of Israel Governor Jacob Frankel demonstrated his cantorial skills, while Klaus Schwab, the founder and executive chairman of the World Economic Forum, gave a speech.

The diners comprised most of the Jews attending the Davos forum, including Ron Lauder and Bank of Israel governor Stanley Fischer.