First Day at the World Economic Forum in Davos.

On Wednesday, everyone at the WEF will be talking about innovation—financial innovation. The focus will be on the financial engineering of SIVs and CDOs and other financial instruments that smart folks created that turned out to be opaque, hard to value, difficult to sell—and, ultimately, a tremendous anchor on the credit markets and the economy. The stock markets sank again on Tuesday after a whopping 75 basis point cut by the Federal Reserve. So when I talk about “innovation” at my workshop, I expect people to throw chairs at me. They’re thinking financial innovation.

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