A BBC News article reports that Volkswagon (VOW:XETRA) is backing away from merger talks with Porsche (PAH3:XETRA). I first told you about this merger, which would consolidate company operations, back on May 8, here on the Emerging Markets Blog. The BBC reports that VW is suspending talks with Porsche saying that, “constructive negotiations were not possible at the moment.” Porsche has a significant amount of debt, and VW wants the luxury car company to reduce that debt. Ironically, Porsche took on about $12.2 billion in debt so that it could increase its stake in VW… The history between these two companies is long and complicated, and while VW says its backing away from the table, the two own stakes in each other and were founded by the same family. Porsche says the talks are still ongoing.

In Davos, Switzerland, the world is holding an economic forum. It’s a grim meeting where money experts - according to Tim Weber, a BBC correspondent attending the forum and posting tweets on Twitter and the BBC - say, “We are not about to turn the corner, we haven’t seen the corner, we don’t know where the corner is.”

This forum encompasses so many issues, from the current economic crisis to climate change, to the political posturing in Zimbabwe and calls for peace in the Middle East.

More than 40 heads of state and 2,500 participants, including the likes of Al Gore, Rupert Murdoch, and Kofi Annan, to name a few will attend this five-day meeting. It comes at an unprecedented time, and the participation this year is unparalleled.

But again, the overall feeling right now is very grim.

The BBC has a page where you can follow live, via Tim Weber’s tweets, or you can see some of the Webcasts directly from the World Economic Forum Website.