Vindication for Roubini at Davos

At the World Economic Forum two years ago, Nouriel Roubini warned that record profits and bonuses were obscuring a “hard landing” to come. “I really disagree,” countered Jacob Frenkel, the American International Group Inc. vice chairman and former Israeli central banker.

No more. “Roubini was intellectually courageous, and he called the shots correctly,” says Frenkel, whose AIG survives only on the basis of more than $100 billion of government loans. “He gained credibility, and he deserves it.”

That sense dominated discussions even after the session had ended. The mainstream media's ADD -- the desire to always look for the new hot story, instead of digging deeper into a complex one -- was deemed partly responsible for the failure.

And since there were those who got it right -- including Nouriel Roubini (who was there) and financial analyst Steve Eisman (who wasn't) -- there was the feeling that many more in the media could have gotten to the truth before it was too late. And if they had, who knows what could have happened?

The widespread contrition permeating Davos is matched by an unnerving feeling of paralysis. The people here -- and we are talking about some of the most influential people on the planet -- seem confused, at a loss about how to attack the financial crisis. No one seems to think that the steps being taken are sufficient. It's as if we are watching things unravel -- how many times, for example, are we gong to hear that layoffs have exceeded expectations? -- but are powerless to stop the unraveling.