All is not well in the world of Davos

Here's a guest post from Michael Elliott, editor of Time International:

It was cold and clear on the way up from Zurich to Davos last night, the sort of weather that makes you hope that the next day will see brilliant sunshine, you'll head to the Jakobshorn for a quick half-day on the slopes, and all will be well with the world.

All is not well with the world, at least, the world of the Davos devotees. This morning I woke up to find a gray sky from which snow was quietly weeping - all of which will, of course, make the skiing even better later in the week, but which for now seemed to mirror the mood of the movers and shakers making their way up the mountain. The World Economic Forum's planners may have hoped that this year's conference would focus on the collaboration needed to make the most of new technologies, on middle east peace (special envoy Tony Blair is a co-chair of the conference), on the prospects for Pakistan and Afghanistan, both of whose presidents will be here. But to heck with all that - what Davos will be obsessed with this week is the specter of an American recession and the impact it will have on economies around the world.

"Decoupling" is the word of the hour. In the last year or so, there's been an optimistic take on the global economy, which goes like this. Yes, the US has problems, a credit crunch brought on by reckless lending in the subprime mortgage category - and maybe in commercial property and credit cards, too - but we could handle it. Growth was so strong elsewhere in the world - not just India and China, but Africa and the oil economies too - that global prospects could weather an American storm.

Er, doesn't look like that today. The two-day sell-off in Asian markets is a reminder that the world has been dragged along by the insatiable desire of the US consumer for stuff, much of it made in China. If the US really does slow down, so - goes the fear - will all those factories up the Pearl River Delta whose wages are keeping millions of Chinese happy.

Wall Street was off Monday for Martin Luther King Day, which made the suspense Tuesday morning even more sharp. What will the Street do when the opening bell peals? We'll find out soon enough. Meanwhile, the Jakobshorn looks awfully tempting.