Looking for a new career path? Regulation is the place to be. National regulators, regional regulators, international regulators, your era has arrived. Germany chancellor Angela Merkel and British Prime Minister Gordon Brown  were calling for global economic regulators, even a UN Economic Council, to keep tabs on the financial system. “What we're looking for is a far more effective early warning system,” said Brown.

Like it or not, said buyout king Henry Kravis, the regulators are coming to the world of private equity and hedge funds. And you are thinking: not a moment too soon.  The hedge fund industry, among others, has spent the last couple of years ferociously fending off any proposal for subjecting it to regulation, under the notion that having those bureaucrats eyeballing  their risk exposure somehow stifles innovation. And that self-interest is the best regulator of all. Those ideas got destroyed in the last couple of months, along with not a few hedge funds. Now the tune has changed. There will be no more resistance. “Regulation is coming and it's coming in a big way,” said Donald Gogel, ceo of the  U.S. private equity firm Clayton, Dubilier & Rice.

Given that regulators are getting their share of the blame for the meltdown—where was the SEC in stopping CDOs from getting out of hand? Why didn't Treasury stop the banks from overleveraging?—it's sort of curious that there's such a clamor for the bureaucrats now. But the sentiment is that it's better to have some regulators, any regulators, rather than have large areas of finance running amok. “One thing's that been revealed from the disasters in financial service is there are all sorts of gaps in regulatory architecture and all sorts of opportunities for arbitrage,” noted Peter Sands, chairman of HSBC.  It's those gaps that have created all the mischief, he said.  “We've had a vicious interaction with regulated banks and shadow banks. If it walks like a bank and quacks like a bank it ought to be regulated like a bank.”

It's not just the finance industry that's clamoring for more regulators. Ken Powell, the ceo of General Mills, a food company that has the happy status of being recession resistant, joined the chorus of  regulation boosters. It's not that he wants more regulations, just more regulators. Think of that— A captain of industry demanding more interference from the government. “Clearly we need more regulatory capacity. FDA funding has declined,” said Powell. “Our industry is arguing that that has to be reversed.”

So here's one area where there could be some  job growth. No one was offering an opinion as to where they are going to find all these new regulators. Certainly there is an ample pool of finance industry talent made redundant by the crisis who might now be available to do the job. They obviously know where the weaknesses are, since they exploited them until the whole thing exploded. By the same token, when you hear the first complaints about this new crop of regulators—maybe at this same meeting next year— you will have a good indication that the crisis is easing.

It may be the first well-informed panel I've ever moderated, in the sense that you all know you don't know anything.

The FT's Martin Wolf, midway through a discussion with Montek Ahluwalia, deputy chairman of the Indian Planning Commission; Mark Carney, governor of the Bank of Canada; Christine LaGarde, finance minister of France; John Lipsky, chief economist of the IMF; and Peter Sands, group chief exceutive of Standard Chartered Bank.

The Tayyip Erdogan-Shimon Peres rumble last night was partly about Gaza. But it was also about the limitations of panel moderation at Davos. I don't mean to single out David Ignatius, whose failure to keep Israeli President Peres from vastly exceeding his allotted time apparently incensed the Turkish prime minister. I had been at another panel Thursday morning where Peres rambled on and on, ignoring several polite nudges from moderator Maria Ramos, a South African CEO. The prominence and self-importance of many of the speakers here, coupled with a certain cultural sensitivity to behaving in ways that people from other countries might find obnoxious, seems to keep moderators from exercising the discipline often needed to make discussions work.

So it was refreshing this afternoon to watch the BBC's Nik Gowing make no attempt to avoid obnoxiousness in a made-for-TV discussion about financial crisis and regulation. He was especially tough on Jacob Frenkel, the former University of Chicago economist and Israeli central bank chief who for the past few years has possessed the (now somewhat embarrassing) title of vice chairman of AIG.

In past years—especially last year—Frenkel was Davos's designated optimist. By now he has acceded to reality, essentially conceding today that everything his fellow panelist and former intellectual antagonist Nouriel Roubini said was right. But when Gowing asked him about his culpability for AIG's colossal wipeout, Frenkel initially avoided the question by saying there had been a systemic collapse in which AIG had been caught up. In a disbelieving voice, Gowing kept pressing him, finally leading to this exchange:

Gowing: So there's no personal responsibility?

Frenkel: At least as far as I'm concerned, there isn't.

Later, Frenkel explained that, despite his fancy title, he's not actually on AIG's board. (He didn't say this, but I think he was basically hired to represent the firm at events like Davos.) It was sporting of him to even show up, I guess—I didn't see anybody else from a bailed-out financial firm on hand—and even more sporting to submit to Gowing's interrogation. But Davos could definitely use a bit more of Gowing's attitude this year.

The urgent need to stabilize the collapsing world economy has given rise to an intriguing discussion in Davos: is it possible to fix the economy at the same time as moving towards a  greener planet? Or will dealing with the big environmental issues of our time, especially global warming, take a back seat to efforts of governments around the world to shore up the economy?

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My report on our day one TIME Board of Economists' session is in the new international edition(s) of TIME and online here. It begins:

Last year, the annual gathering of TIME's Board of Economists on the first day of the World Economic Forum in Davos was dominated by a debate over just how bad the then-gathering financial crisis would be, and whether the rest of the world would share in the economic comeuppance facing the U.S.

This Jan. 28, on a day when the lowering snow-filled skies matched the mood of those inside the Davos Congress Center, there was no such debate. In a packed room for what has become an opening-day tradition, everybody agreed with Morgan Stanley Asia chairman Stephen Roach's grim assessment that "this will most likely be the first year since the end of World War II when world GDP actually contracts." In fact, after Roach predicted 2.5% average global growth over the next three years — which still qualifies by most standards as a recession or close to it — Keio University economist and former Japanese Minister for Internal Affairs Heizo Takenaka quipped that Roach was being "much more optimistic than expected."

Later on, Roach and Financial Times columnist Martin Wolf, who was in the audience, differed on whether we're in a "proto-depression" (Wolf) or a "global recession the likes of which we've never seen" (Roach). But that was more a linguistic debate than an economic one. There was also some disagreement over China's growth prospects. World Bank chief economist Justin Yifu Lin said he thought the country's big fiscal stimulus plans, including massive expenditure on infrastructure, would keep growth above 7% per year. No one else was that confident. Keep reading.

One of the major themes of the World Economic Forum this year and every year is "Full payment required in advance." This, more than anything else, explains why the show is going on in somewhat inappropriate style here in the midst of global economic crisis. Sponsors' dollars were already in, hotel rooms were already paid for and—perhaps most important—party locales were already booked before it became apparent to all that the global economy was collapsing. All this will almost certainly be different next January, leading to a much smaller, more sober event even if the economy is already recovering.

For now, though, the parties go on. As the FT's Gideon Rachman writes:

I was expounding my theory that this is the party-free Davos to a colleague from The Economist, who then dismayed me by producing a vast folder of party invitations. So it appears there are lots of parties - I just haven't been invited. My former colleague rather grandly picked out some of the B-list invitations he wouldn't be using and tossed them my way - a German bank, an Indian newspaper, that kind of thing. Then he spotted a functionary from the Clinton Global Initiative, called him over and suggested that he invite the FT's foreign-affairs columnist (me) to the CGI party in the Davos museum. The functionary looked at me for a moment and then said: “I'm afraid it's a very restricted space.” Oh well, I'm going to a South African jazz party instead - and I won't even have to gatecrash.

I'm about at Rachman's level of party access (I didn't even know about the Clinton party), and I've still gotten invites to more events than I could ever attend. And I go to them, instead of sitting in my room blogging (or sleeping), mainly because there doesn't seem to be any point in coming all this way if not to interact with interesting/famous/important/rich people in a different sort of context than journalists usually get to do.

Last night's most surreal such interactions came at TIME's cocktail party, a modest little event that by virtue of its location (in an art gallery on the way from the convention center to all the other parties) and its starting time (about an hour before all the other parties) briefly attracted a shockingly star-studded crowd. At one point, not long after Jimmy Wales had introduced me to Peter Gabriel, I was talking wonky stuff with Stanford economist Paul Romer when I realized that actor Jet Li was standing politely by waiting to be included in the conversation. So I asked him a question about his One Foundation, and that got things going.

What good does any of this do me and the shareholders of Time Warner? Not sure—although the TIME party's turnout must have impressed any potential advertisers in the crowd (if there are any potential advertisers out there anymore) at least a little. In any case, I'll be out again tonight, in part because of the sense that, after this week, the Davos party circuit may be in for a long hiatus.

Just after posting on the "crowding out" thesis and what it might mean for the developing world, I went to a terrific panel on Africa, with five heads of government and former U.N. Secretary-General Kofi Annan.

One point on capital flows made by both President Abdoulaye Wade of Senegal and Prime Minister Raila Odinga of Kenya: as unemployment increases in the rich world, so the flows of remittances back home from the African disaspora will reduce. (The same phenomenon will be seen in relation to, say, Mexicans in the U.S., or Filipinos in Hong Kong.) Remittances have become a crucial and little-reported aspect of the global economy. As they reduce, there is all the more reason for rich world nations to maintain and indeed enhance their promised levels of development assistance to the poor world.

In a terrific column in the International Herald Tribune this morning (I imagine it's in the New York Times, too) Floyd Norris accurately identifies one of the memes running around Davos. This is the notion of "crowding out" (Floyd gave the phenomenon the new name of "credit protectionism"): the idea that as rich world countries - especially but not exclusively the U.S. - run enormous fiscal deficits to simulate their economies, there will be less capital available for investment in  the developing world, and that such capital as was available would come at higher interest rates. It's a point that was made on the first morning by Trevor Manuel, the finance minister of South Africa, and has been repeated constantly since.

This is the latest manifestation of an old argument. In the 1980s, it was common to hear that the Reagan-era fiscal deficits in the U.S. would crowd out private sector investment; earlier still, in the 1970s, it was a staple of Thatcherite critiques of the size of the British public sector. I can't remember quite how the academic literature on crowding out ended up, but it's possible to say three things about the thesis in its latest manifestation:

1. Insofar as crowding out is a real problem, it is less of a one for those economies with access to susbtantial pools of domestic savings. This in practice means the east Asian economies, developed (Japan, Hong Kong, Singapore) or developing (China.)

2. In a crowding-out world, the multilateral development agencies - the World Bank and the regional development banks - might see their role enhanced. For the last 10 years, their impact on development has been overshadowed by enormous flows from global private capital markets.

3. Key takeaway from Davos: The wam welcome that much of the world is prepared to extend to Barack Obama and his administration does not mean that criticism of U.S. policies has somehow been suspended. To the contrary: it is the U.S. that is considered to have got the world into this mess, and pleas from the Barack administration that the mess was not created on their watch will not cut it. There are great (and reasonable) expectations out there that Obama and his team will adapt policies that help, not hinder, the global economy to recover, and Washington can expect no favors if they are not met.

The PayPal co-founder, Facebook investor, and manager of the hedge fund Clarium Capital Managment had a far better year than most in 2008 (Thiel says Clarium was flat for the year). So where does he think things are headed?

What has surprised you most over the past year?

In a weird way I was most surprised by the ways in which so many of the things I expected literally happened. We had a housing crisis, finance, EM [emerging markets].  Everything blew up at once. In a way I didn't believe my own theory. Everything happened the way we thought it theoretically should happen, and it was stunning because it happened so quickly

Then what are your concerns going forward? What's your scenario for the next year?

I think we're headed for a long period of deflation because there's nothing that can really restart it. People are hoping for the government to restart things, but the challenge is it would have to do a lot more than it's doing now, whether or not that's desirable. It just has to do a lot more. The history of the 1930s and ‘40s where things really didn't get restarted by government spending until the 1940s.

Then what is going to restart it or who is going to fix it?

I think if it gets fixed it gets fixed sort of on a hidden, micro level. There are lots of small businesses that somehow adapt. People figure out new things to do. And somehow there's this very flexible adaptation that happens. I suspect there's no easy top-down fix.

One of the hallowed rules at the World Economic Forum is something often referred to as the "Davos spirit." It's a tacit agreement among all participants that, even if they are unable to resolve their problems and disagreements, they will at least air them in a constructive way, as the first step to finding a possible solution. Late Thursday, that Davos spirit ran into the violent and conflicting emotions prompted by Israel's recent action in Gaza. The result: Gaza 1, Davos Spirit 0

The occasion was a panel discussion featuring Turkey's Prime Minister, Recep Tayyip Erdogan and Israeli President Shimon Peres, as well as Amr Moussa, the secretary general of the Arab League.

After making his introductory remarks, Erdogan listened with visibly growing agitation as Peres outlined Israel's arguments for its military push into Gaza. Finally, apparently incensed that he wasn't given the opportunity to respond in full to Peres's arguments,  he stormed out of the session, shouting that "Davos is over for me from now on."

Erdogan is an outspoken  Muslim leader of  secular Turkey, which is one of the few Muslim countries to maintain diplomatic relations with Israel. He has been highly critical of  Israel's recent military push into Gaza, which Israel justified as retaliation for rocket attacks by Hamas militants there on Israeli civilians.

Klaus Schwab, the founder of the World Economic Forum, quickly tried to patch up the dispute. In a news briefing, he said that while he had heard substantive differences between Erdogan and Peres, there had also been some points of agreement. Erdogan also backtracked - a bit. He said his main beef had been not with Peres or the Israelis, but with the way the session was run. He claimed that Peres had been allowed to speak for 25 minutes, while he had been given just 12. Moreover, he said that the moderator, the Washington Post's veteran columnist David Ignatius, "wanted to end the panel without giving a final word to all the participants." Reached by phone after the session, Ignatius declined to comment.

As for Davos and its legendary spirit, Erdogan suggested that he might be open to coming back again after all. "We'll talk about this with Schwab," he said.

All in all, an explosive moment that brought real passion, and some theatrics to a Davos that's often accused of being too far removed from what's happening in the real world.