Friday, March 13, 2009

>The Azhar Syndrome (FIRST GLOBAL)

Sometimes we get what we wish for, and then we get the rest of our lives to repent.
This is precisely what has happened to India.

This country has craved a bull market since the day a few Gujus got together and formed the Bombay Stock Exchange under a tree (actually, that’s probably a charitable description. More likely, they formed it in a slum). Since then, this country has lived on in the hope that it will get a secular bull market, akin to what the US got between 1982 and 2000. And intermittently, it did get bull markets…short, sharp ones, that enriched no one but the brokers. But nothing ever got even close to the US bull market. All of us sell-side low lives sold the mythical India story to dumb foreigners through the ‘90s, gobbled up their dollars at Rs.31.37/$, got them to buy loads of rubbish that miraculously turned more illiquid than molasses come a mini-bear market so that the foreigners could never take back the dollars they had brought in. But the broad bull market never came.

Then came the 2003-2007 bull run. And that ruined the country.

This bull market inflated dumb promoters to God-like status. It made mediocre fund managers become stars. It made below-mediocre sell-siders become ace stock-identifiers. It made the fiscal deficit nearly go away, however illusorily. It made even lowly back office clerks become Bloomberg operators at JP Morgan’s outsourcing units, getting in a month what they were getting in a year, so tight was the market for Bloomberg operators.

To see full report: The Azhar Syndrome


Ashish Joshi said...

The report really makes interesting reading. It is usually rare to find such prejudiced reports. Looks like someone out there is desparately jealous of India.
While I think it is totally natural to want a bull run, I don't think Indians "craved" for a bull run. Even when the Sensex was scaling 20000 and looked unstoppable, equity investors were hardly 2% of Indian population. Indian middle class knows it's hard to earn money, and hence practices frugality and teaches its kids the same. Is it Indian or American middle class that retains the polythene cover of car cushions for an year at least after buying a new car?

I don't understand the point in blaming MBAs, particularly IIM grads, for the downfall of Lehman Brothers. Did Lehman not recruit from top-notch American b-schools? And was any IIM grad at the helm of affairs when silly financial products were being developed and sold to gullible investors? I find this MBA/IIM bashing amusing, if not ridiculous!

The lesser said about the comments on Indian private sector banks, the better. In an economy, where exports are largely from sectors like gems & jewellery, textiles, steel, software etc., is it not common that banks fund these sectors? Are not public sector banks having exposure in these sectors? The writers of this report do not say anything about the burden the public sector banks are facing due to waiver of farm loans. Is it a deliberate attempt to malign the private sector?

The report also sarcastically criticizes CMIE's GDP growth predictions. OK, CMIE may be wrong. But, for that matter, which agency in the world predicted the economic downturn and downfall of global financial giants? If First Global were as confident of their predictions and comments, they would never have had half a page of fine print disclaiming the authenticity of their own reports!

I don't mean to say that we did not commit mistakes or India does not have its shortcomings. Luckily, we are aware of our strengths as well as weakneses. We know we have the spirit of "Lagaan", which produces "Slumdog Millionaires". We presented both to the global cinema.....and don't really care which one gets an award...for we know that Lagaan was not bad if it did not get an Oscar, nor Rahman's best score till date is "Jai Ho" if it wins one. The jury out there is not God!

An indian middle class,
Ashish Joshi

Ashish Joshi said...

on behalf of Mr. Aashish