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Davos panel tries to discuss next financial crisis, but gets stuck talking about the last one

Though the title of the panel was “Preventing Future Shocks,” the participants in the Wednesday session at the World Economic Forum annual meeting in Davos spent most of the time looking back at the last financial crisis and analyzing its aftershocks.

Martin Sorrell, the chief executive officer WPP, Plc. says the mentality of consumers has been slow to recover from the shock of the financial crisis. Meanwhile, the failure of corporate leaders to invest in the long term serves as its own form of post-traumatic stress disorder. “How do you explain that companies are sitting on $7 trillion in net cash, at least – the last time I looked.”

Paul Singer, the founder, CEO and Co-CIO of Elliott Management, says uncertainty continues because central banks have provided cover for politicians who have failed to implement fiscal reforms.

The first question from the audience served as a reminder to the panel that they were supposed to be discussing future crises, rather than the past. At that point, Singer stressed the importance of de-leveraging financial firms and highlighted the threat derivatives still pose to financial stability.