May Santa dish out some sanity - The Honest Truth By Ajit Dayal
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Investing in India - Honest Truth by Ajit Dayal
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24 DECEMBER 2010



Christmas is round the corner and I hope that Santa will bring some sanity along with his sack full of toys.

His first stop from the North Pole should be the White House. President Obama was elected on a platform of change. The way my American friends see it, the only change he made was to change himself. From a man who was a believer in technology as a way to reach out to people and to communicate truths, he is now the spokesperson for prosecuting WikiLeaks for its disclosures. Their 250,000 documents – of which some 1% has been published so far – are seen as a threat to US security interests.

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The stated US foreign policy of supporting military dictatorships and autocratic regimes from Middle East sheikdoms to Pakistan it seems was never a threat to global peace. More damaging than any WikiLeaks cable on US foreign policy, is the published quote of President Franklin Roosevelt who famously said, in defence of the US support for South and Central American generals and dictatorships, "He may be a son of a bxxxx, but at least he is our son of a bxxxx."

No, the US insanity has not changed for over 50 years. Nor has the use of American politicians to further the commercial interests of US corporations changed much. The US President was sent to India to sell American-made goods and - to make sure the power point presentation had maximum impact - the speech was delivered outside the very Taj Mahal Palace hotel where terrorists from Pakistan staged an attack on Indian soil. But, since the diplomats who work for the multinationals realise that every country is a client, the speech was scripted to ensure that President Obama never calls Pakistan a terrorist state and never needs to explain why the US is in bed with Pakistan. Yes, as the famous quote from some western movie goes, "white man speak with forked tongue".

But, amazingly, we Indians (the one that Columbus missed by a few thousand nautical miles) loved it. Our captains of industry and politicians loved being photographed with the most powerful man on Planet Earth who, as a sign of weakness, had to travel to India with his own armoured car to avoid being knocked down in bad Bombay traffic. Yes, Santa, do make the White House your first stop on your sanity tour.

Operation Break My Heart
While you are in the general area, Santa, please stop by the law makers and regulators in the US who were sleeping on the job when Enron and WorldCom were building themselves for a mighty blow-up fifteen years ago. But don't give them any more sleeping pills, Santa, and please don't lace their drinks with ecstasy. For it was only five years ago that the regulators were dancing on the road to goldilocks and la-la land totally ignorant of the fact that financial powerhouses like AIG, Citibank, Bank of America, J P Morgan and all the well known Wall Street firms like Bear Stearns, Goldman, Merrill, Morgan, were busy cheating investors. Like the shadowy Fagin and his protege Bill Sikes in Oliver Twist, these financial geniuses were running a business that sent their troops to "pick a pocket or two". If someone in the regulatory bodies knew about the racketeering, they were pretty quiet. Now the regulators have woken up. After having pumped in trillions of dollars from 100 million tax payers into saving the fat bonuses of the 100,000 privileged in the financial services industry and claiming success, the SEC is busy raiding small financial companies in what is called 'Operation Broken Trust'. An example of a recent raid to clean up insider trading and give the small guy a fair chance in the rigged stock market: the raid on a research firm that sends analysts down the aisle to track the sales at retail malls to get a sense of what is selling and what is not. Or the raid on a research firm that tracks the sale of shipments of electronics and computer parts. Uh, did anyone ever think of tapping the phones of the folks who run Wall Street firms? Or would that reveal too much? Yes, Santa, please don't forget to stop by the capital of insanity. And, pssst, Santa, they don't need a Christmas gift from you. They have Ben Bernanke's printing press to buy whatever they want – the insane Chinese are still buying their worthless US Dollars.

The good news for you, Santa, is that you don't need to stop by Europe. Well, I meant Germany, but could not say it just in case the French got really upset. And you can give England a miss – there is nothing left there really, besides the terrible weather in London. But Germany is a good place for a quick re-fuelling stop since that is about the only government with some rational economic policy. They want people to save. And they want people to feel the pain of the economic excesses they indulged in. They don't seem to be in hurry to keep their printing presses running to save the defaulters in Ireland, Spain, Portugal, or Greece. Sure they announce some bail outs once in a while, but they don't want to rescue anyone. Stoic as ever, the Germans are taking all the abuse coming out of economic think tanks and government agencies. They are branded as the people who won't restart the party after the party has been busted by the cops for dealing in illegal drugs and some pretty exotic derivative positions that would make the Kama Sutra books blush.

But despite their rigid faces, deep in their hearts the Germans are angry that they got carried away and joined the Euro party. I saw their letter to you, Santa. I know they want their Deutsche Mark back and they want nothing to do with the irreverent Italians, the flamboyant French, or the sterile Swiss. The less said the better about what they wish you could do to those vectors of Anglo-Saxon disease. Yes, Santa, do drop by to console them, and make sure they don't get invited to another drunken party hosted by the Fed and get conned into starting their printing presses and joining some Super-Dollar currency bloc.

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Submerged because we are emerged
But, dear Santa, please save most of your time for us in India. I mean, the US is a dying empire. England is waiting a burial. And the Europeans are generally well dressed for funerals. So a fleeting trip to that part of the world is justified.

India though is an emerged economy now and you have to spend more time here, Santa. There is no doubt of our supremacy. We hosted the CommonWealth games and no stadium collapsed on our heads. To top it all, Saina just knocked out the Chinese in badminton. The Chinese Premier Wen Jiabao is visiting India to acknowledge Saina's ranking as the world's best badminton player. Of course, from here the Premier of China will head to Pakistan, to sell them more arms to keep us busy with our troubled borders on the western front. This distraction allows the Chinese to build more roads to annex the eastern India states. I know all this not because it is on WikeLeaks, but because the Singapore diplomat called India "idiots". Yes, that was on WikiLeaks.

So, just like we welcomed President Obama and allowed him to give us a speech on terrorism while the US refuses to explicitly condemn its presence on India's western borders, we will welcome Premier Wen Jiabao and allow him to give us a speech on how the two rising superpowers (China and India) can co-exist. Then he will fly to Pakistan to threaten our existence. The Chinese must be happy we are idiots.

But, don't get me wrong, Santa - we have emerged; you have to hand it to us! And with our emergence, other stuff is also emerging. The least shocking revelation of the various scandals is that these politicians are greedy but the most shocking was that they have a hand, an arm, and a leg in every pie, foundation, spectrum, grain, floor, and cricket stump. These economists better re-define GDP to mean Greedy Desi Politician. I mean these political types are involved in businesses from airlines, real estate, financial services, power, telecom, media, cricket, resort development, minerals, forestry, road-building, and agriculture. Even the original D-Company is not that diversified, and they are in the business of business.

We always knew that you could buy a journalist to write anything, but now we know that you can also buy a journalist to help build a cabinet. Not the one that stands in the kitchen, but the one on which you keep your phone. With all the spectrum you need. And those who pose to represent associations of Indian industry are actually in the networking game for their own personal representation – 5 acres of land will get the job done, it seems.

But there is no shame in being caught on tape - as long as you can appeal to the courts that these tapes are an infringement on your personal privacy. I suppose the in the next few tapes, Mr. Tata was discussing the weather and those would rightfully fall under any right to privacy act, even in Serbia. Why would anyone even dare to think that a phone conversation with a lobbyist who is talking about nominating someone for the role of a Union Cabinet Minister is of any national relevance and could have any remote impact on the amount of money collected by the national exchequer?

What has been released so far – if my understanding of the English language is still intact - suggests that whatever was discussed had nothing to do with being in the private domain but, in fact, had an impact on public policy and the national exchequer. But we need your sack of sanity, here, Santa because the discussion has shifted on who leaked the tapes and who authorised the tapes! That is insane. It is a deflection of the real issues, of the underlying strengthening of a relationship between a corporate world - that is so mesmerised by profits and market cap - and the always murky world of selfish politicians. The rot is deep and widespread. The loot has accelerated. This is Moore's Law applied to corruption in India: every 18 months the next deal with the politician will cost you twice as much but will make you twice as rich.

At a recent conference, the Home Minister spoke about the threat to national security from the Naxalites. I really wanted to stand up and ask him: Sir, the death from all terrorist activities in India is about 4,000 lives a year; the death from rail and road accidents in India is 130,000 a year. While agreeing that the Naxalites are a menace and terrorism must be stopped, can we also declare the people who grant driver's licenses without proper road tests, those who build bad roads, and those politicians and bureaucrats who profit from all this as 'terrorists'?"

At the same conference a silent social worker told me, "I hate coming to the city and sitting next to all these people from the government, my work is in the villages where the people from the Forest Department are seen to be the terrorists." A different perspective, indeed. One so different from the corridors of money power and vote banks in New Delhi, Chennai, Chandigarh, Bombay, Bangalore, Baramati, or Amethi.

Yes, Santa, India has emerged as a country focused on GDP where money is the god and we are its servants. We have embraced a world built by racketeers, for racketeers, so they can carry on their business of racketeering. The stock markets will celebrate new highs over the next decade – I have no doubt about that. We will have money and we will have GDP, of the economic and political kind.

And India will produce more billionaire chors than Russia or China.

Come; celebrate the Indian decade with us, Dear Santa.
Be Merry.

And please don't poison this money party with your sack of sanity.


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Disclaimer: The Honest Truth is authored by Ajit Dayal. Ajit is a Director at Quantum Advisors Pvt. Ltd and Quantum Asset Management Company Pvt. Ltd. The views mentioned above are of the author only. Data and charts, if used, in the article have been sourced from available information and has not been authenticated by any statutory authority. The author, Equitymaster, Quantum AMC and Quantum Advisors do not claim it to be accurate nor accept any responsibility for the same. Please read the detailed Terms of Use of the web site. To write to Ajit, please click here.


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17 Responses to "May Santa dish out some sanity"

Francisco

Dec 28, 2010

Ajit: You haven't lost your touch. Great view of the current state of the global economies and markets. I shall make an effort to read your column more often. Cheers and happy new year.

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Rajagopalan

Dec 28, 2010

Hi Ajit,

An excellent desertation of the state of affairs prevailing in the present day world and especially in our beloved Bhart! Kudos to your analytical skill! I thoroughly enjoyed it. Felt helpless in changing these murky things. Bravo! keep it up. Best wishes

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sashikumar

Dec 28, 2010

wonderful and well written. i liked every bit of your column. continue your good work.
Can someon tell me the difference between these corrupt politicians and the Naxalites/maoists?' i do not see much difference. in fact these political and financial maoists/naxalites are bigger threat to our country.

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N.M.R.Shreedhar

Dec 26, 2010

Hi, great piece of writing, Mr.Ajit Dayal !!! I doubt if anybody else could have put the message across succintly --- truly liked your article. We expect more such incisive and analytical articles, Mr.Dayal. Looking forward to your Web-in-air. regds

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surajit som

Dec 26, 2010

a very very good article.

the whole capitalist system has gone haywire.the economic model of the last century lies shattered. what we are witnessing today is that consumption-based capitalism will not work anymorre. what probably can is a simpler version of free market economy that caters to the masses and not to a small % of elites. the problem is that the old structure led by greedy bankers and crony capilalism remains intact.

democracy has degenerated all over the world. corrupt, criminals, incompetents have become leaders everywhere. george bush,yeltsin are good examples.this is leading to massive corruptions everywhere.crony capitalism-decaying democracy-corruption combination is at the root of all crisis that we are seeing today.niira radia affair shows us the state of reality.

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Mrugen Shah

Dec 26, 2010

simply awesome.

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Rupesh

Dec 25, 2010

Good One sir.

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virendra jain

Dec 25, 2010

Wonderfully written and thought provoking.

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khalid

Dec 24, 2010

Great writing.
How very true.
Things will not change. Santa can keep waiting......

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M.Dinakar Shetty

Dec 24, 2010

There are some, meant for not agreeing with the set system. They speak as if they handle the same affairs, bring fortune to people. And your media is doing one such thing. If Obama is behaving in a way you commented on, you should know, such behaviour is as a matter of his government policy. He cannot behave on such matters according to his whims and fancy. His government has a policy and his party has a policy. If he is behaving with tempor of type you commented on, whether his government body will agree with him or his party will agree with him. Gentleman, you should know, he is not running/managing a house as you do. He is running an institution called a nation. Complicity involved in managing the affairs of a country, may be for somebodys' liking but for others disliking. A partisan bias is the result of your such writing. I suggest you to stand on a neutral pole and stretch your eyes. For your kind information, I have no special sympathy either for Mr.Obama or anybody else.

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