Disturbing Economic News out of Davos, Switzerland

The gloom surrounding this year’s World Economic Forum descended into confrontation yesterday as international labour leaders launched a withering attack on the 1,400 business executives and 41 heads of government at Davos over what the labour leaders alleged was their failure to respond effectively to a deepening crisis of their own creation.

Guy Ryder, the general secretary of the International Trade Union Confederation (ITUC), said that the current financial turmoil had triggered a social timebomb that would lead to deepening civil unrest and soaring crime.

The comments from the confederation, which represents 168 million workers in 157 countries, are the most ferocious example yet of a backlash that has persuaded many who attend frequently to stay away from Davos this year. Yesterday Alistair Darling, the Chancellor, became the latest political figure to stay away from the meeting, after a similar move by David Miliband, the Foreign Secretary.
The ITUC warned that around the world more than 50 million jobs could be lost this year and that more than 200 million people would be driven into absolute poverty. The confederation said that the financial crisis had arisen because of “rampant speculation and financial profiteering” and that new global financial architecture needed to be established to “support regulation and ensure coherence”.

Jan. 28 (Bloomberg) -- News Corp. Chairman Rupert Murdoch said there’s no hiding from the worsening global economic crisis, and stressed the need for quick and “drastic action” to turn the tide.

People worldwide are “depressed and traumatized” to see their life savings, including homes and pension funds, disappearing, Murdoch said at a press briefing in Davos, Switzerland, today.

“It would be very foolish if we said here we are, we had a crisis, and how do we get out of it quickly,” he said. “The crisis is getting worse. When you get to the real economy, values are still going down.”

New York-based media company News Corp. in November reduced its fiscal 2009 profit forecast because of reduced ad sales at its newspapers and Fox television.

“You have world financial markets, it doesn’t really matter where you’re talking about in the world,” Murdoch said. “There’s no hiding place, the world financial markets are in a great state of disarray.”