The Market’s verdict is Out – RIP the Market: Chawm Ganguly

10327285_729218077136321_568875103_nWhy do Stock Markets behave the way they do? Why do the Indices go up one day and crash on the very next day, often without any reason – at least, reasons that are visible to ordinary mortals? What does the market “know” that makes it behave in a particular manner that you and I do not? Is it really the barometer of the economy, born out of the past, reflecting the present, having factored in the future? Or, is it a closed-door club of boys with bags (full of money) playing their little games of deceit: on, and often at the expense of the hapless, who too are fuelled by the greed is good philosophy?

Like everybody else, I too, don’t know the answers. Those who know, won’t tell and those who don’t, tell tales. Having spent almost three decades in the periphery, I have had the pleasure of meeting (and working) with many, who have made it a profession to assign reasons to random theories, making wild swings justifiable and acceptable to people by telling them what they want to hear in doses that they can handle. Truth, Absolute Truth and Statistics be damned.

Take the Monsoons for example. If your pen is aligned to the Bears you will predict doom as a “delayed onset with less than average rainfall, that too, one that will be highly erratic in its spread across the lengths and breadths of the country, will directly affect food-grain production leading to the drying up of disposable income in the hands of the farmers which will create artificial pressures on the prices, tremendous hardships at the bottom of the pyramid, ultimately leading to the economy gasping for breath”. However, the same pen, writing for the other end of the spectrum will sermonize as to how the “influence” of agriculture has diminished over the decades with manufacturing industry and the service sectors having dislodged it from being the prime mover of the economy; on how the Government’s pro-active measures have ensured full granaries that will insulate against prolonged droughts and how the markets have already “discounted” the impact of the sparse precipitation which will lead to the fireworks. The Met Office figures will remain the same and one man’s El Nino will be another’s El Nina – who gives a damn about what happens on the other end of the globe anyway?

The other genie that we pull out of the lamp is the India Happening Story. Atal Behari Vajpayee smiled down from Billboards across India, for an Election on its basis and Lost – which too, a full Two UPA’s ago. Yet, no Research Report – worth the forests it destroys to get printed – is considered complete without the mandatory carol about how India is the destination of the future and how investors from around the world are making a beeline to park their life’s savings. When we cross the fence, we suddenly are confronted with equally weighted terms like policy paralysis, fragmented mandate, core-sector meltdown, globally-connected economies, and deserting Hot Money trails, sink our teeth in them and yelp in delight “I’m Loving It” as the poor sods put their monies in what they do not understand.

Ever wonder how everybody – from the guy selling pao-bhaji opposite the market to the analyst dropping terms on TV – knows everything about the economy? Everybody, except those in charge of “running the economy” that is. I mean, if they knew all that they claim to know, then, why isn’t your office peon the Finance Minister? Surely, the analyst picking the “sectors” and identifying the “scrips” with such clinical efficiency, would have been so goddamned rich that he wouldn’t have had the time to make those ritual trips to the studio? At the least, he would be busy lending his signature on the Bank Notes?

Now Close your eyes and think economy. Yes, you are right. Inflation is killing. The economy has come to a standstill. Industrial production is down in the dumps. A Lame Duck Government has failed to put the reins on allowing everything from corruption to economic destruction. Now look at the markets, which are celebrating as they scale peaks as though the global warming has melted all the ice away. Does it make sense? Again the answer depends on who owns whose pen.

It can either be:

  •  a celebration of a victory that may never take place, a discounting of the exit of a Government that was “perceived” as “non-functional” , the harbinger of hope, a sign of the happy days that are just around the corner, based on equally suspect results of Exit Polls, or,
  • a celebration of the victory of good governance, of the vindication of the correctness of the policy decisions taken by the most educated and erudite leader and his team of super performers – the same people who had unshackled the economy of its fetters and set it free in the first place.

Either way, the problems remain. We are in for a disastrous monsoon. Industry is gasping for breath and the same policy paralysis that plagued the last Government is set to continue with the Nation again giving a fractured mandate. And apparently, investors in Manhattan are spending sleepless nights “studying” how Muzaffarnagar swings before either betting on tea-boys or taking their flights to Tashkent.

And you, my dear friend will form your opinion based on what you see on Television and what you read in the papers. Opinion that we will help you form, depending upon, who hires the services of the best from among us: poor wage earning wordsmiths.

An economy of India’s size, going from belly-up to ballistic before you can say Bingo? Sorry boss, we are paid to write, not believe in the shit that we dole out. That’s a call you have to take, it’s your money after all.

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