Soccer crowds in England like to abuse match referees by chanting: “You don’t know what you’re doing.” If protesters had been able to get near the World Economic Forum in Davos last week, they could justifiably have aimed the same chant at the world leaders who assembled in the Alps.

These people are meant to be the “masters of the universe”: presidents, prime ministers, bankers, billionaires. If anybody can make sense of world events, it should be them. But the air of confusion in Davos was both palpable and alarming.

The meeting took place against a background of crashing stock markets, panicky interest-rate cuts and a massive bank fraud. The global financial system is now so complicated that nobody really knows how deep its problems run. This central “known unknown” means that all the subsequent big questions are much harder to answer. Will America face a serious recession? It all depends. How bad will the knock-on effects be for the rest of world? Search me. How should politicians and regulators react? Difficult to say.

Continue reading this column here.

Why are you in Davos? It is a question we all struggle with in our different ways. But when our three-man FT delegation posed it to Pervez Musharraf on Wednesday afternoon, the Pakistani president seemed incredulous. Were we implying, he asked, that Pakistan was an unstable country that could not be left to its own devices for a few days? "There is no danger in Pakistan," he assured us, "business is bustling."

Does this reaction suggest that the president is cool, calm and in command? Or completely detached from reality? Or just presenting a cynical front to the world, while he battles to contain the forces that threaten to engulf him? During the course of our audience with him - which was written up in Thursday’s paper - I got flavours of all three ideas. (Sorry if this is beginning to sound like the wine-tasting, of which more later.)

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The theme of this Davos is meant to be “collaborative innovation” – otherwise known as “collovation”. But my personal theme seems to be spitting.

Yesterday morning I gobbed into a glass tube, so that a new company called 23andMe could analyse my DNA. In the evening I went to a wine-tasting, which also involved a bit of spitting. But there are some activities that shouldn’t involve spitting, unless things go badly wrong – like interviewing President Pervez Musharraf of Pakistan and moderating a session on global political risk this morning.

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I went to two international conferences last week. The Herzliya security conference took place on the Israeli coast and the World Economic Forum was held in the Swiss mountains. It felt as if they were taking place on different planets.

Herzliya gathered together Israel’s political and military leaders. The guest speakers included the number twos at the Pentagon and the State department, as well as a clutch of American presidential candidates. The mood was dark and dominated by the increasing likelihood of a military conflict between Iran and either Israel or the US. Other blood-curdling possibilities discussed at Herzliya were a nuclear arms race in the Middle East, renewed civil war in Lebanon and American defeat in Iraq, leading to a broader regional war.

Davos is a bigger and glitzier affair than Herzliya, with a much broader agenda. It too had sessions on the Middle East. But the dominant tone at the WEF was set by the exuberant optimism of international businessmen, enjoying the opportunities brought about by globalisation, new technologies and a world economy that is expanding at its fastest pace for decades.

This is an extract from Gideon’s regular FT column. You can read the remainder here, or leave a comment.

I knew it was a good idea to go to the “classic clarets” dinner. Some crazed benefactor had donated an extraordinary collection of wines for us to taste: Latour 1952, Lafite 1962, Cheval Blanc 1975 – and six others.

Seated next to me was Victor Yanukovitch, the prime minister of Ukraine. Since we do not share a common language, we were unable to exchange the usual chit-chat – “faint whiff of pencil shavings” – that sort of thing. In the event, he had to leave half-way through. This was a lucky break for me, since he left behind unfinished samples of Latour and Lafite, which I swiftly poured into my own tasting glasses. It did cross my mind that there have been some unpleasant cases of poisoning involving politicians from this part of the world – so I hesitated briefly before knocking back Yanukovitch’s left-overs. But what the hell, you don’t get to taste Latour every day. I’m pretty sure I got away with it. I do feel fairly appalling this morning - but I think it’s just a standard issue hang-over.

After the clarets dinner, it was over to the Belvedere Hotel, where the “young global leaders” were having a drinks party in an igloo – to underline their concern about global warming. I got into discussion with a young guy, who informed me that he might be about to become prime minister of Serbia. Perhaps I looked sceptical, because he then said – “or maybe deputy prime minister.” I’ve got his card, anyway.

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I think they have invited too many people to Davos this year. The Congress Centre is heaving and it is very hard to find somewhere to sit. However, I have found a spare seat just outside the prayer room. This could be a useful source of investment tips. I intend to short the shares of any company whose CEO seems to be spending an excessive amount of time praying.

The ostensible theme of Davos this year is the “the shifting global power equation”; or possibly “the shifting equation of global power”. Personally, I think the “the global power of shifting equations” also has a nice ring to it.

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