Sunday, October 12, 2008


This amazingly clear thinking article was written in sept 2003!!

Today, we realised how many quadrillion times more painful it has been for the (very small percentage..very) thinking Americans than for us thinking Indians to watch the fools run our respective countries and economies amok... we are after all third world..and probably deserve such bankers/RBIs/SEBIs /Finance Ministers/ Mutual fund managers/ Portfolio managers/ Financial advisors etc.

Sometimes you feel the financial rewards of separating these fools from their money is not reward enough for being right.. compared to the anger you feel at the clueless schmucks still spouting drivel from their behinds..
Oh yes, the worst is over !!.. again!!

2 points from the article:
1. The Great Indian Growth Story seem to have taken off largely due to US Fed's largest monetary expansion in history.. and at the worst possible stage of a Big Kondatrieff cycle.
2. The Great Indian Growth Story now starts looking like the Great Indian Rope Trick.

Finally a little comfort:
Finance minister P.Chidambaram is working on urgent Govt. bailouts for the following key pillars of Indian La-La Land on whom the growth story hinges:

  • Real Estate Companies: All firms with more than 2000 half-finished, semi-finished or even half planned projects across the country whose old loans are long overdue and cannot get fresh loans and have no more PE suitors and whose share prices have fallen over 70 % and who haven't sold anything in last 2 months BUT who have not reduced prices at all.
  • InfraStructure companies : Who have projects in every nook and corner of the development phase and have no lenders in sight and whose PE investors come for meetings in wheel chairs and who have no basic qualifications and who have lofty aspirations for Nuclear projects and (this one is strange) who belong to Andhra Pradesh state (as our hero G.Mallikarjun Rao of GMR).
  • Private Sector Banks: All banks in this sector who have been worthy pillars of the immense wealth creation last year who unfortunately now need to show some profits(or hide losses better) and whose growth is coming back to bite their butts and whose global plans show distinct bag holder status and whose management is infested with ambitious, equal oppurtunity program fallouts and whose loans dot the countryside with worthy borrowers and whose CEOs exhibit youthful good looks.
This step is reqd as the global FIIs and PE funds have been complaining about their horrible, horrible losses due to unsophisticated "investor" behavior lately..making it difficult to keep their faith in India's Growth Story (and more importantly their jobs).

..Who can forget the swelling of pride Indians felt when the minister sagely dissected the US financial turmoil at Davos .."It was a regulatory failure."
..and promptly proceeded to get Indian banks to cut Interest rates on his return.

Lastly , from our DRIP stable .. comes the reassuring sounds of the far thinking Chanda Kocchar of ICICI Bank pronounces yesterday:
"The NPA levels continue to remain where they have been even in the last quarter. Even as we report earnings for Q2, you will not see anything untoward as far as the NPAs are concerned."

"As far as NPAs are concerned, we are not seeing any increase in it, and the corporate sector profitability is still holding up and the repayment and payment obligations are all coming absolutely on time. So, on that count there shouldn’t be a worry at all.
..All I can say is if the legal framework was halfway as effective as the US .. she would have thought twice before incriminating herself like this.

But this is India and the Growth stories remain Intact for very long ..thanks to the Decoupling.

Also as usual .. Again it is too late to sell now.. let it recover a little bit.. just a little.. pls GOD!!


Cool Head said...

Great post! I always used to wonder about the "India Growth Story" and was at a loss to know how all these private banks, brokerages, malls (retail revolutions), real estate scams (APARTMENTS in Thane more expensive than HOUSES in New Jersey) used to run without any "normal" kind of profit models. Now we know, it was all "borrowed glamour" which can never last. And my poor brethren really believed it all that India had finally "arrived". Just like a cock crows at sunrise and feels that the sun has rose ONLY BECAUSE he crowed loudly!

Anonymous said...

wonderful! keep us posted on the latest developments in India, as information is hard to come by.

Anonymous said...

Excellent blog, keep us reading.

D. L. Bailey said...

Is inflation really cooling in India?

I see the rupee is being savaged and that's very worrying.

I hate to say it but I'm not at all sure it's too late to sell. I'm afraid of India hitting a stagflationary crisis.

Ludus said...

@cool head
It all started when these Roosters mistook bull markets for their "investment" savvy..

1.The rupee has no business being propped where it was while we have a bedSheet wrapped Finance Minister.

2.It is an excellent time to sell.

Disclaimer: You can make a lot of money following above advise..or not.