RENEE MONTAGNE, host:
World markets are surging today. They followed a dramatic u-turn on Wall Street. The Dow, a leading market average, was down more than 300 points at lunchtime but it finished the day up almost 300 points. So that helped Asian and European markets recover today, but it didn't necessarily help Asia and Europe recover from concerns about where the world economy is going in the near term.
Joining us is Gillian Tett. She is world markets editor at the Financial Times. And she's with world leaders at the World Economic Forum in Davos, Switzerland, this week where concerns about a recession are at the top of everyone's minds.
Hello.
Ms. GILLIAN TETT (World Markets Editor, Financial Times): Yes. Good morning.
MONTAGNE: And how would you describe the mood there with all the talk that the U.S. might be slipping into a recession? Is the mood gloomy in Davos?
Ms. TETT: Well, that I think is extraordinarily contrast with this time last year. The last year at Davos meeting everyone was fantastically upbeat about the global economy and the markets were in something of a boom time. This year, the mood is extremely nervous. People are worried that the global economy could be slowing down. That the U.S. is in considerable trouble and that the emerging markets may not be as resilient as we thought. And of course, there is this crazy rollercoaster ride in the markets right now, which is reflecting a lot of fear about the financial sector.
MONTAGNE: Well, one person who is optimistic is Condoleezza Rice. She's at Davos as well. And yesterday, she addressed the economic anxiety being expressed in many parts of the world. We have a clip of that.
Secretary CONDOLEEZZA RICE (U.S. Department of State): The U.S. economy is resilient. It's structure is sound, and its long-term economic fundamentals are healthy. And the United States continues to welcome foreign investment and free trade. And the economy - our economy - will remain a leading engine of global economic growth.
MONTAGNE: That's Condoleezza Rice's view. What's your response to that?
Ms. TETT: Well, the America officials are clearly in Davos this week on a major sales pitch to try and persuade everyone that the economy is not going to slip into a deep recession. That the government is going to unveil the necessary stimulus to avoid that. And they're also trying to convince everyone that they have the financial sector problems under control. The problem is, though, that every time a bit of good news comes out, it seems like another bit of bad news comes out as well. And certainly, the mood here is pretty skeptical.
MONTAGNE: Among those who were gloomy was billionaire financier George Soros. He suggested that it would be, quote, "very difficult to avoid recession in the U.S. and the U.K." And here's a clip of his remarks.
Mr. GEORGE SAROS (Global Financier): Markets have been left to their own devices, and the authorities came to rely on the markets to right themselves. They ought to have known better.
MONTAGNE: Is that correct?
Ms. TETT: Well, there is certainly a view here that something has gone fundamentally wrong in the way that Western finance is conducted in recent years. There was actually a poll conducted by - of the delegates yesterday, which showed that 60 percent of the economists, and policymakers, and bankers, here, think that central banks have lost control of the situation in recent months. That is a stunning result. And the problem is that there is no consensus, at the moment, about how to right the financial problems.
And on top of that, you have oil prices, which are still high. And we've also got the housing market in the U.S., which remains a source of considerable unease for just about everybody.
MONTAGNE: And with all that, though, the European Central Bank, which is the equivalent of the Federal Reserve, insisted yesterday that it will not cut rates in the wake of the Federal Reserve cutting rates. Is this because of concern about inflation?
Ms. TETT: Absolutely. One of the really ironic problems right now is that people are very much worrying about inflation in Davos. This year, there's a lot of discussion about food prices, about energy prices, which are topics that weren't really dominating the debate this time last year. So there are certainly inflationary pressures coming through. And that adds to the Central Bank's challenge.
MONTAGNE: Thanks very much for joining us.
Ms. TETT: Thank you.
MONTAGNE: Gillian Tett is world markets editor at the Financial Times and speaking to us from Davos, Switzerland.