Tip of the iceberg.

Seems that restructured loans for Public Sector or government banks was Rs 2.18 trillion in the last financial year, up by 58.48%  compared to 31 March 2011. TOI, 31 October. Banks restructure loans by extending the time limit for repayment by giving new loans to cover old ones. This hides the extent of Non Performing Assets, or bad loans in bank-speak, on their books. PS banks have restructured 5.7% of their loans as against 1.6% by private banks. Till 30 June 2012 the Corporate Debt Restructuring cell, a bankers' forum which decides on restructuring, received 400 applications for restructuring loans amounting to a total of Rs 2.27 trillion compared to Rs 958.2 billion as on 31 March 2009. Loans have been given against dubious collateral such as personal guarantees, brand value or trademarks which will be hard to collect. The ratings agency Crisil warns that restructuring will add another Rs 500 billion to NPAs. Government debt stood at Rs 39 trillion in the last quarter, up 3.6% compared to the previous quarter. The Current Account Deficit was a record 4.9% in the June to September quarter. The combined budget deficit of state and central governments is about 9% of GDP. This may explain why the Reserve Bank did not reduce interest rates at its meeting yesterday. The RBI wants the government to reduce spending and limit indiscriminate corporate borrowing. What no one talks about is the gigantic property price bubble hanging over the economy. Mumbai has Rs 1 trillion of properties lying unsold. Reducing interest rates will inflate the bubble by increasing property prices thus adding to the black money and inflation. This also explains the howls of anguish by politicians and business fellows. Politicians want a huge amount of cash to campaign for the coming general elections and business fellows want to unload their stock of over-priced properties on the gullible public. Former Finance Secretary, Vijay Kelkar said," Last year we had fiscal deficit of 5.8% of GDP and CAD of 4.2%. If this continues the CAD would go up to 4.3% and fiscal deficit to 6.1%this year. So options are either we boost exports, draw down our reserves or borrow from the world. At CAD of 4.3% we would need to borrow $80 billion alone. Then short term debt will need rescheduling which would need further refinancing. Such a trend would be unsustainable." ET, 1 October. He then says,' The Gangotri of growth deceleration and macro economic problems is the continued high fiscal deficit which also leads to high inflation. So we need to take corrective action swiftly." In short the World Famous Economist has made a massive cock-up of the economy. On the other hand, maybe the RBI is waiting to reduce interest rate by 0.5% in the next quarter to allow the government to borrow massive amounts in the next years budget to bribe the " vote bank " and go for elections in 2013. Any skullduggery is possible.  

What they mean.

The Reserve Bank of India has shown real guts today by holding interest rates steady while reducing the Cash Reserve Ratio by 25 basis points to increase liquidity. There has been enormous pressure on the RBI from politicians, business fellows and foreign fund managers to reduce rates despite crippling inflation. Each of these groups has its own profits in mind, let India go to hell. Foreigners want share prices to increase so that they can show large profits when they close their books at year end, earning fat bonuses. Business fellows have borrowed vast sums from banks to build apartment blocks and want people to borrow to buy over priced properties, to multiply their money 10 times. Some have borrowed from foreign investors through Foreign Currency Convertible Bonds and are unable to pay back because of the fall in the value of their shares and the rupee. They would like to borrow cheaply in India to pay back their foreign loans. Politicians want growth because, according to them, that will help the poor. What they actually want is for share prices to rise so that they can make huge amounts of money, through sale of shares in Public Sector Undertakings, and increased tax collections which they will then use as bribes to win the elections in 2014. If they really wanted an end to poverty they would use all their energy in bringing down population, increase quality of education and get rid of black money by bringing down property prices by 80%. That the economy is floating purely on hot air was proved when the share market jumped by more than 1000 points on announcement of so called " big bang " reforms. What reforms? Diesel and cooking gas prices were raised to reduce subsidy adding to inflation. Had petrol price been reduced by the same amount so that diesel and petrol reached parity, like in other countries, that would have been true reform. Allowing 49% foreign ownership in insurance, airlines and in multi brand retail is pure rubbish. Insurance companies already have foreign partners and if they put more money into these companies that will not help the economy except for slightly reducing the Current Account Deficit. Companies like Walmart and Tesco will not be able to establish hyper markets in cities because of unreal land prices. At best they might set up small stores with Indian partners or large stores far away from cities where they will serve more as wholesale shops for small shopkeepers. All airlines in India are poison because of sky high taxes on aviation fuel, passenger tickets and airport charges. Ticket prices have doubled in the last year. This allows the new Railway Minister to announce an increase in rail fares for air conditioned travel while keeping cattle classes and commuter tickets the same. Everything to win the next election to continue looting. The rape of Mother India continues.

Italy and India are so alike.

Last week Silvio Berlusconi, former Prime Minister of Italy, was at long last convicted of tax fraud and sentenced to 4 years in prison which was immediately reduced to 1 year because of some amnesty rule. In 1990 he was convicted by an Appeal Court in Venice of giving false testimony in front of a court in Verona in 1989 but got away because of another amnesty rule. There have been allegations of mafia collusion, tax fraud, corruption and bribery of police officers and judges against him but he has always managed to wriggle out by  amnesty laws and statute of limitations, some of which were enacted while he was the Prime Minister. Indeed he entered politics to escape justice, using his enormous wealth and control of TV channels to win elections. Berlusconi is also famous for his appetite for underage girls and for inviting an underage prostitute, Karima al Mahroug to bunga bunga parties. Another former Italian Prime Minister, Bettino Craxi fled to Tunisia where he died in exile on 19 January 2000.  He was sentenced to 27 years in prison for corruption which was reduced to 9 years and 8 months. Giulio Andreotti has been investigated many times including for involvement in the murder of a journalist, Mino Pecorelli in 1979 who had exposed his links to the Mafia. Andreotti was made Senator for life which gives him lifelong immunity from conviction. The similarity with Indian politicians is stark. Our lot are a bunch of criminals and crooks who have entered politics for the protection it affords and have managed to win elections with black money, guns and goons. The cabinet reshuffle at the center yesterday is a vivid example. The same old ugly faces or the children of the old ugly faces have been made ministers in a game of merry go round. The fellow who threatened to kill India Against Corruption activist, Arvind Kejriwal has been made Minister of External Affairs. He will be able to gel with the Italians very well. On 15 February, 2 unarmed Indian fishermen were shot to death off the coast of Kerala by 2 marines aboard the Italian ship MV Enrica Lexie. The Italians claim that the murders happened in international waters so the marines should be allowed to go free as if that is some kind of amnesty. After all the Italians allowed Amanda Knox, affectionately known as Foxy Knoxy to her friends, to walk free of a charge of double murder. Knox happens to be an American and is now happily enjoying her life in the US of A. In April the central government told the Supreme Court that the 2 marines should be allowed to go free because the murders did not happen in the country's territorial waters and questioned the right of the Kerala Police to hold the 2 marines. The Supreme Court said," We do not expect such a stand of the central government. It is unfortunate when persons killed on February 15 were within Indian territorial waters." Seems that Italians are ruling this country, does it not?

Elections are unfair.

George W Bush left the country in an absolute mess. The sub prime crisis had brought property prices crashing, banks were left with massive bad loans and the US was involved in 2 wars, in Iraq and in Afghanistan. Obama steadied the economy by recapitalising banks, restructured the car companies and got out of Iraq to concentrate on Afghanistan. He has succeeded in killing Osama bin Laden in Pakistan and Anwar al Awlaki in Yemen but his reliance on drones has resulted in  indiscriminate killings, creating more terrorists for the future. The economy grew by 2% in the third quarter, up from 1.3% in the second quarter, and unemployment has fallen to 7.8%. Experts predict that growth will continue, the economy will be growing at 4% in the next 4 years and unemployment will fall to 6%. That makes this election a must win one. If Romney wins he is assured of a second term because no president has lost with a growing economy. That is why the Republicans are using every means, fair or foul, to win. Romney keeps saying that he will boost the economy by cutting taxes, increase military spending and balance the budget by cutting expenditure but he refuses to give any details or actual figures on how he is going to do it. He says that his presence in the White House will increase investment by increasing business confidence because of his experience as a successful businessman. He is content to be vague because he knows that economic growth, resulting from Obama's policies, will increase tax revenues and help reduce deficit and he will be able to claim credit for the recovery. The Democrats know that if Obama were to lose, the White House will be out of their hands for the next 8 years. Bill Clinton is especially conscious of that. He wants his wife Hilary to be President in 2016 and that is why he is working very hard to make sure that Obama wins. Obama cannot run for a third term so Hilary Clinton will benefit from economic growth. The BJP lost the general elections in 2004 in spite of a booming economy, due partly to reforms induced by the BJP and partly because of the excess liquidity in the global economy. The Congress thought that reforms would be bad for reelection and decided to bribe the electorate massively in 2008 to win in 2009. But economic crimes rarely go unpunished in these days of globalisation. India is now in the grip of rising inflation, rising fiscal and current account deficits and diving growth rates. With elections in 2014 the Congress is desperate to find more money to bribe the voters once more but the economy is in such dire straits that it will collapse if they commit the same crimes again. They have made a few cosmetic changes and are shouting that these " reforms " will increase growth. However, they need not worry. People are stupid and they will fall for the same lies every time. Only a few of us will suffer the agony of knowing the truth.

Mobility leads to idiocy.

One politician is in hot water with feminists for saying," What are the girls missing without mobiles? Did our mothers, sisters......die without mobiles during their time?" This has been interpreted as saying that cell phones should be available only for boys and men to protect girls from going astray. Examples such as Occupy Wall Street and the Arab spring, which were facilitated by Twitter, have been cited to show that cell phones are helpful. No one is denying that, although both the Occupy movement and the Arab Spring did not achieve their objectives and can be deemed to have failed. Those of us who had no alternative to government controlled BSNL and MTNL just 20 years back think that cell phones are heaven sent. In those days a call to another city was called a " trunk call " and cost Rs 100/minute. Today a similar call costs Rs 1.50/minute and even the poorest people carry cell phones with them. However, there is no doubt that there are serious problems with the use of cell phones. It is extremely annoying when someone starts talking on a phone in the middle of  a conversation leaving you staring at a wall for half an hour, waiting for the person to finish. In 99.99% of cases the call is entirely trivial and could have waited for a later time, or even for next week. This uncontrollable urge to answer a call is also extremely dangerous. You will see men and women on motor bikes talking on a mobile with one hand while driving with the other or driving along with head on one side with the mobile wedged between head and shoulder. Not only are they poorly balanced but they are oblivious to traffic around them and do not seem to hear warning blasts of car horns. Women are especially in danger from this stupidity. It is usual to see a man talking animatedly on his mobile while driving his motor bike with his wife and baby seated behind. Children are easily distracted and play games on their phones in class. Giving mobiles to children affect their study and bring down their performance. Children are also very affected by pornography which can be accessed from phones. To see how cell phones are destroying human brains all you need to do is travel on a train. Previously people used to read books, newspapers or magazines to while away their time. Today only a handful of people read. You see people hunched over their mobiles playing stupid games or listening to ring tones. At times it seems that the entire carriage is full of monkeys hunched over in their seats. We do not know if evolution goes only forward or whether, given the right circumstances, it can regress. However, logic says that if something moves in one direction it can move backward. There seems a real possibility that cell phones will result in human beings gradually regressing to monkeys. Will the feminists be happy to be sitting in trees talking on mobiles?

Whiter than white.

Couple of weeks back there was enormous commotion when it was revealed that Mr Robert Vadra, only son in law of Congress President, Ms Sonia Gandhi, had bought land and apartments worth hundreds of millions of rupees at throwaway prices from the construction company, DLF. There was speculation as to what riches DLF were given in return. The suspense is over. A group of 12 Deputy Commissioners of Gurgaon, Faridabad, Palwal and Mewat were asked to investigate documents registered by Mr Vadra and his companies, either as buyer and seller, from 2005 onwards. TOI, 26 October. Guess what? Mr Vadra has come out squeaky clean. Even more. " In one deal, Vadra paid more than Rs 221 thousand as stamp duty for buying 9 acres of land, though he was liable to pay only Rs 67,500," said one officer. Wow, what sacrifice! He actually paid Rs 153,500 more than was necessary. Does that make him a saint or merely foolish? There were 11 registrations involving 52 acres related to Vadra companies in Faridabad district. " There was not even a single case of undervaluation or theft of stamp duty," said another official. Brings tears to our eyes, what? Of course, we have to remember that Haryana has a Congress government led by one Mr Bhupinder Singh Hooda and we must remember that to rise in the Congress party one must know how to lick. The better the licker the higher he shall rise. Meanwhile the entire business community in India is in a state of shock at the news that Mr Rajat Gupta has been sentenced to 2 years in prison on charges of insider trading. What is the point of being an insider if you cannot trade on it? What is especially shocking is that Mr Gupta merely discussed confidential information with his friend Mr Raj Rajaratnam, founder of the Galleon hedge fund, who is serving a 11 year sentence, and had no interest in any personal gain. This is terrifying stuff. Firstly, this means that anyone wanting to do business in the US has not only to be honest but can be locked up for passing on interest stuff to friends and cronies to make a few bucks on the side. What is capitalism if cronies cannot gain from it? Secondly, if similar laws were to be introduced in India life would become really difficult. No one would be able to manipulate the stock market and even the most ordinary Ms Ram Dulari would be able to make profits if she is clever enough. Life would become very difficult for  children of businessmen who would not be able to enhance their pocket money with an occasional flutter. But business fellows now have a role model in Mr Vadra. Just follow his saintliness and rejoice.

Does it matter to us?

The debates are over, there is wall to wall advertising and both candidates are rushing around trying to drum up last minute voters. The pundits give 2% lead to one candidate and then to the other with the caveat that this is within the margin of error. After the party conventions Obama was in the lead, mostly because of the old Clinton magic and Clint Eastwood holding a muddled conversation with an empty chair. The first debate was a disaster for Obama but he came back stronger in the second and the third debates. Romney clutching " binders full of women " became a point of discussion and Obama's sarcastic " horses and bayonets " riposte to Romney's charge of a weaker navy has become the basis of endless jokes. However, Americans are much less concerned about foreign policy than they are about domestic policies, especially the economy. If the experts are to be believed the result on 6 November hinges on 9 swing states. Apparently Obama is already assured of 237 electoral college votes and needs another 33 to reach the magic figure of 270 while Romney has 191 and needs another 79. Obama is ahead by 2% in Ohio which gives him 18 votes and by 3% in Wisconsin which gives him another 10. Romney is ahead by 6% in North Carolina which gives him 15 votes, by 2% in Florida getting 29 votes, in Colorado it is Romney 47.8% to Obama's 47.6% giving 9 votes to Romney and in Virginia there is a dead heat at 48% giving Romney 13 votes. Obama has the lead in a number of small states such as Iowa with 6 votes, Nevada with 6 votes and New Hampshire with 4 votes. According to these projections Obama gets 44 votes in the swing states while Romney gets 66 and Obama wins by 281 to 257 electoral college votes. Thus Obama can scrape through if he loses Wisconsin, which is the home state of the Republican Vice Presidential Candidate, Paul Ryan, but if he were to lose Ohio he is dead. With this system Romney could win by huge margins in the southern states and thus have a larger total of popular votes but still lose the election, much as Al Gore lost to George Bush in 2000. Does the result matter to India? We already know what Obama is about. He is good at speeches but has done little to improve relations with India. While he is conciliatory towards China he has increased visa fees, hurting our main export in IT services. Romney says that he will brand China a currency manipulator on the very first day which will surely precipitate a trade war with China. That may help us and, if he is tougher on terrorists, we would gain. Thus we have nothing to gain from Obama and nothing to lose from Romney. We can sit back and enjoy the fun.

Degrees of filth.

Today's TOI features details of dubious business dealings of BJP President, Nitin Gadkari. TOI has uncovered that Mr Gadkari's driver, Manohar Panse is a director of 5 of Purti Power and Sugar ltd investor companies and a director of 6 other companies, floated by Mr Gadkari, between 2009 and 2011. Mr Panse is apparently unaware of his position as director of so many companies as is his wife. Rajesh Khanzode,an employee in Purti's bakery unit and Vishnu Sharma, an astrologer from Mumbai are also directors of 2 companies in Purti group. Not being experts of company law we are unable to understand how Mr Gadkari gains personally from having his driver or a bakery employee as directors of his companies unless he is using them as fronts for money laundering or for diluting his tax liability. Mr Gadkari is said to have been given a loan of Rs 1.64 billion by on Dattatray P Mhaiskar whose family runs a construction business. Apparently this company was given contracts worth Rs 600 million when Mr Gadkari was PWD Minister of Maharashtra between 1995 and 1999. That is just peanuts compared to the amount of the loan given to Mr Gadkari's companies. The maths just do not add up but since we do not have any knowledge of how corruption works in India we are unable to make any sense of the allegations. Meanwhile Mr Vir Bhadra Singh, Congress nominee for the post of Chief Minister of Himachal, has threatened to break the cameras of journalists for asking him about charges of massive accounted wealth. Mr Salman Khurshid has threatened that Mr Kejriwal will not return alive if he is to visit Farrukhabad. Mr Khurshid also said that we should listen to what he has to say and not ask any questions because he knows how to work with blood. Mr Vadra, son in law of Ms Sonia Gandhi, opined that we are " Mango people in a banana republic " when questioned about properties worth billions owned by companies owned by him. He has not explained why the properties are owned by 4 or 5 companies. Surely if the deals were kosher one company would have sufficed. While we see the joke in " mango people " which is a direct translation of aam aadmi for which the Congress bleeds, it is because of terrible crimes in the 8 years of Congress misrule that India is now a banana republic. Politicians are so accustomed to looting our money that they become enraged at being questioned. The press being Congress agents will try to muddy waters to confuse people. However, crimes of another person do not condone crimes by Congress. It only confirms our belief that politicians are scum.

Worse than a police state.

The people in Delhi have received a threatening letter from a faceless civil servant, who styles himself / herself as Director of Citizen Registration / Director of Census Operations, Delhi, ordering everyone to attend a named center on specified days so that they can have their photographs, fingerprints and iris scans recorded. The letter is unsigned which makes it all the more menacing because we do not know the identity of the gestapo behind this conspiracy and whether to expect a visit from toughs with balaclavas over their heads in the earlier hours of the morning. The letter asks for numbers of Ration Card, Voter ID Card, Driving License Number, PAN Number, which is the identifying number with the Income Tax authorities and Passport Number. This is reminiscent of the Soviet Union under Stalin, China under Mao and Cambodia under Pol Pot. The dictatorial letter tries to justify its threat by citing the Citizenship Act 1955 and Citizenship Rules 2003 for its bullying. We, who were born before 1955, have never ever heard of such rules and previously never have been treated like the worst offenders in any prison. While the politicians keep committing the most heinous of crimes they use that as an excuse to enact even more stringent rules for citizens while they remain free. Terrorists have free run of the country. Headley was able to scout India at will. Bangladeshis keep coming in their millions across the border changing the demographics in parts of Assam and Bengal, leading to riots, but there is no attempt to throw them out. Our most revered Prime Minister goes on " bended knees " to beg for peace with Pakistan while they keep on denying any involvement in the Mumbai attacks. But these attacks are used as excuses for ever more spying on citizens and taxpayers. We do not trust the government. In fact, the government today is probably our biggest enemy. So it is especially worrying and frightening to give all personal information to this lot of criminals who are completely above the law. What if some politician, with the help of civil servants, sells this information to terrorists who then create new identities for themselves. Will anyone believe us? Sadly there is no organisation with the knowledge and funds to challenge these attacks on citizens as are in other countries. The US Healthcare act, also called Obamacare, was challenged in the US Supreme Court but here we have no such cover. Orwell was right about Big Brother but he was wrong about the the date and the place. Big Brother is here in India in 2012.

Growth at any cost?

In an interview with the Economic Times of India on 17 October, Mr Joseph Stiglitz, Professor of Economics at Columbia University and Nobel Prize winner said," In my view adverse effects of inflation are a bit exaggerated. 8% inflation is normal in a developing country whereas growth has the ability to keep millions of mouths feeding, creating jobs and opportunities. Raising interest rates is unlikely to make a ' big ' dent on inflation. In a trade off between growth and inflation, I would plump for growth." A few months earlier Mr Kaushik Basu, Vice President and Chief Economist at the World Bank and previously the Chief Economic Adviser to the Government of India, made the same point. He said that given a choice between a inflation at 10% with growth at 11% and inflation at 5% with growth at 6%, he would choose the former, that is high growth with high inflation. It is worth pointing out that both these gentlemen live in the US where inflation rate for September was 2% and historically from 1914-2012 it has been 3.4%. The ECB tries to maintain inflation below 2% as does the Bank of England. Inflation rate in China reached 6.5% in July 2011. The government acted swiftly by increasing interest rate and increasing bank reserves to bring down loans. Inflation has come down to 1.9% in September. We may assume that all these central banks are being run by economists. So are they all fools to treat inflation as a threat to the economy and act swiftly and decisively to bring rates down below 2%? Low interest rates help the government the most because it is the biggest borrower. This year the Indian government is going to borrow Rs 5 trillion so a 1% cut in interest rates saves Rs 50 billion in interest. Not a small amount. However, this is at the cost of savers who lose because they get less interest on savings and the value of their savings fall because of inflation. It is, therefore, a tax on savers, especially pensioners. High inflation also reduces the value of the loan the government has taken so over time it is a tax on the people. In the case of India a focus on growth at any cost is especially dangerous because the Congress will squander all the gains to try and win the coming general elections in 2014 like it did in 2008. At that time it increased civil servant salaries by 80%, selectively forgave all bank loans to farmers, gaining handsome returns in Andhra, UP and Maharashtra, and started the MNREGA scheme which hands out cash to villagers for doing nothing. This time there is talk of distributing free cell phones which will cost Rs 70 billion. A huge amount of money will be stolen for electioneering increasing the black money in circulation, increase property prices and add to inflation. Fiscal deficit and Current Account Deficit will increase, as happened last time, and the rupee will fall further adding to inflation. Disaster looms.

The story so far.

Last week Mr Arvind Kejriwal, India Against Corruption activist, accused Union Law Minister Salman Khurshid and his wife Louise of misappropriation of funds disbursed by the government to a trust run by them called the Zakir Hussain Memorial Trust which distributes wheel chairs and hearing aids to the disabled. A sum of Rs 6.9 million was paid to the trust by the Ministry of Social Justice and Empowerment on the basis of a letter written on 24 March 2011 by the Special Secretary at the Department of Disabled Welfare in UP. Trouble is that the man who is supposed to have certified the work done by the trust had already retired in January 2011 and says that his signature has been forged. A similar forged letter in 2009-10 was used to obtain Rs 7.1 million. In response Mr Khurshid said, " Nothing on Rs 7.1 million can be proved... Not a word can be proved. They can scream, scream and scream till they turn blue in their face." No need to scream. Man says it is not his signature, isn't that proof enough? However, proof is at hand. The respected Comptroller and Accountant General of India says that expenses claimed to have been incurred by the Trust were bogus. TOI, 14 October. The CAG says that documents from Khurshid's Trust show that tricycles and hearing aids were purchased in July 2010, while camps were held from January-March 2010, and so could not have been distributed at the camps. Naturally Congress has rushed to protect one of its own. I&B Minster Soni said," There is no question of isolation or not backing ( Khurshid )." Union Steel Minister Beni Prasad Verma said," Salman Khurshid is a responsible person. He is a central minister. He was a central minister earlier as well. .... I don't think a person like Khurshid will do anything for an amount like Rs 7.1 million. If it would have been Rs 710 million, even I would have been serious." Quite. We know that Rs 7.1 million is small change for a minister of the Congress but surely it would cover the salaries of servants, cooks and drivers. A minister has to look after his staff after all. Politicians in India are not used to having to answer questions so Mr Khurshid has now become angry. Speaking to his supporters on 16 October he said," I have been made the Law Minister and asked to work with a pen. I will work with the pen, but also with blood." We are scared to ask what he was working with before being asked to " work with a pen ". He continues," Let them come to Farrukhabad and visit Farrukhabad. But let him also return from Farrukhabad." Presumably speaking about Mr Kejriwal. Continuing further," They say we will ask questions and you have to give answers. We say you hear the answers and forget about asking questions." We ask," Is there any difference between the Congress and the mafia or drug gangs?" Yes. The Congress is more dangerous.

Why do we stay silent?

Lance Armstrong was a hero to many thousands for having won the Tour de France 7 successive times from 1999-2005 after conquering testicular cancer in 1996. There were allegations that he took performance enhancing drugs but these were never proved until Floyd Landis, who had been a member of his team, made specific allegations in 2010. Landis won the Tour de France in 2006 but was found to have altered ratio of testosterone and epitestosterone in stage 7 of the race and was stripped of the title. Armstrong has been stripped of all his 7 titles and has even been accused of donating $100,000 to the International Cycling Union to cover up a dope test in 2002. TOI, 17 October. Jerry Sandusky was an immensely respected Assistant Coach for football at Pennsylvania State University from 1969-1999 when he retired. He started a charity called The Second Mile in 1977 to help underprivileged boys. In 2011 he was charged with sexual abuse of young boys that he met through his charity work. On 22 June 2012 he was found guilty of 45 of 48 charges of sexual abuse and sentenced to 30-60 years in prison. Since he is 68 years old he is likely to die in prison. At his trial his wife spoke in his defense saying that she had never seen anything untoward and even blaming some of the boys for his conduct. Jimmy Saville was a household name in Britain for decades. He was a DJ on BBC radio, an anchor of a TV program called the Top of the Pops and had his own program called Jim'll Fix It in which he made a child's wish come true. He was known for his eccentricities and for raising millions of pounds for hospitals such as Stoke Mandeville Hospital, known for its spinal unit, Leeds General Infirmary and Broadmoor Hospital for psychiatric patients. He was awarded the OBE in 1971 and a knighthood in 1990 for his work. On 12 October 2012 ITV broadcast a documentary called Exposure: The Other Side of Jimmy Saville in which several women said that they had been sexually abused when they were just 14 or 15 years old by Saville. This opened the floodgates and now the police are investigating more than 300 charges from over 60 women of similar abuse when they were girls. Saville died last year aged 84 years and so will not go to prison but his family has removed the headstones from his grave and he now suffers the ignominy of lying in an unmarked grave. We have every sympathy for Armstrong. Who knows his state of mind after recovering from an aggressive form of cancer? Maybe he thought he should make a name for himself before the disease returned to kill him. But what of Sandusky and Saville? How could they get away with their abuse of children for decades? Children are innocent and have poor appreciation of risks. But what of the adults? Why did no one object? This explains why politicians always find people to help them in their crimes and cover up for them. It is not true that we deserve the scoundrels we get.

We have even lesser rights.

China is vilified as an oligarchy with no human rights for common people. Power is held by the Standing Committee of the Politburo which currently has 9 members but will be reduced to 7 members for easier decision making. The General Secretary of the Politburo is the President of China, presently Hu Jin Tao. The Politburo itself has 25 members and is elected by the Central Committee of the Communist Party of some 2000 members. The Central Committee will meet next month to choose the next Politburo and the members of the all powerful Standing Committee. In reality they have already been chosen at secret meetings held in a seaside town and will be rubber stamped next month. The citizens of China will have no say at all in who will be their future rulers. Yet there will be change. Every 10 years the entire Politburo is changed and a completely new team takes over the running of the country. This brings in younger people and fresh ideas in the direction the country should take. In democracies there is no such safeguard. In the US the President can hold office for 2 terms of 4 years each and is then ineligible to stand forever. However there is no term limit on the members of the House and the Senate. Russia also has a similar term limit for the post of President but Vladimir Putin got round that by allowing Dmitry Medvedev to become President for one term while he was the Prime Minister and has now been elected President again with Medvedev as Prime Minister. He has got the Duma to increase the duration of the term to 6 years. This is a mockery of the constitution and since he is President by the powers conferred by the constitution he has made a mockery of himself. Hugo Chavez of Venezuela does not need a fig leaf to hide his naked ambition. Since he had a huge majority in parliament he got the constitution changed to allow him to stand as many times as he likes and won his third term last week. Manel Zelaya tried the same trick in Honduras in 2009 but was ousted in a coup in the morning of 28 June and bundled off to Costa Rica while still in his pajamas. Thankfully there are some honorable men in the world. Nelson Mandela gave up after his term in office, although he could have stayed on forever, as did Lula Da Silva of Brazil who was immensely popular. Sadly we in India have the worst of all the worlds. We have a so called democracy which involves pressing a button on an electronic machine every 5 years or so to select one out of a number of criminals or buffoons. There is no term limit and the same ugly mugs are to be seen year after year. Since politicians seem immune to every illness you see them while you are in your diapers and they are still there while you are being carried off to the crematorium. They have soiled every institution from industry to administration to sports by their purulent presence. How do we cleanse ourselves?

It is not all men's fault.

The state of Haryana has been in the news lately for a large number of rape cases. There have been 19 cases of rape in the last one month and 2011 saw 725 cases, at a rate of 60 a month. Even with these terrible statistics Haryana cannot boast of being the leader in India. It is merely tenth in the league table of rapes with the north eastern states of Mizoram, Tripura and Assam heading the table. Haryana came into the limelight after the father of a 16 year old dalit girl committed suicide when he learnt that his daughter had been gang raped. Tribal or khap leaders of Haryana say that the only solution is to lower the age for marriage to 16 years for girls, or even lower, from the official age of 18 years. This will only legitimise child marriage, interfere with education of girls and ruin the health of women as they are forced to bear children before their bodies are ready. A Taliban solution if ever there was one. Feminists are quick to blame men for all the problems that women have to suffer. They say that men are beasts to force rape on women and many a politician and police officer has got into serious trouble for suggesting that women should not dress in a " provocative " manner. They say that rape is an abominable crime and how a woman dresses should not be an excuse to condone it. Absolutely. Yet these feminists stay silent when the same people suggest that women should not wear gold ornaments because that will invite armed robbery. Surely armed robbery is just as serious a crime and there is no excuse for it. Yet women are wearing artificial ornaments quite happily ever since the price of gold reached record levels. Muddled thinking. Although rape is a male crime and should be severely punished women do bear some responsibility. The ratio of girls to boys has been falling all over India as women choose to abort female fetuses in preference for boys. Normally about 105 boys are born for every 100 girls. Since there is a higher mortality among boys the ratio becomes equal at the age of 30 years and women far outnumber men in old age. In parts of Haryana the ratio is less than 800 girls for 1000 boys. Feminists are quick to blame men for this saying that in a patriarchal society women have no control over their bodies. This is not true at all. Even educated and high earning women show a marked preference for boys. Partly this maybe because there is a social stigma on women for not producing male children. This is completely perverse. A woman has 46XX chromosomes and can donate only an X to each of her eggs. A man, on the other hand, has 46XY chromosomes and therefore donates an X or a Y to each sperm. Hence only the father can choose the gender of his offspring and, biologically, women have no choice at all. If feminists spent some time and effort teaching everyone this basic truth we may have more girls in time. Instead feminists prefer to scream abuse at men. Probably because this gets their pictures on TV. Women do have some responsibility in preventing rape after all.

So what is new?

Union Law Minister, Mr Salman Khurshid and his wife run a charity called the Zakir Hussain Memorial Trust which helps disabled people by supplying them with aids such as crutches and prostheses. Very noble indeed. The trust receives money from the Union Ministry of Social Justice and Empowerment. In March 2011 the trust received Rs 6.8 million from the Union ministry on the basis of a letter, written by the former Special Secretary at the Department of Disabled Welfare in UP, certifying that the work done by the trust had been assessed and was to the satisfaction of the department. Trouble is that the man who is supposed to have written the letter denies having written it because he had retired 2 months previously in January 2011. He maintains, not unnaturally, that the letter is forged. Apparently the trust received Rs 7.1 million in 2009-10 also on the basis of a forged letter. As is normal for our politicians, especially of the Congress, Mr Khurshid has gone on the offensive. He held a press conference today in which he showed photographs of camps held for the disabled and invoices showing purchases of implements to help the disabled. All very well but that still does not answer the accusation of forgery, especially since the writer has categorically denied having written the letter at all and says that his signature has been forged. And he should know. In India any amount of invoices can be obtained for a fee, a tactic used by exporters to cheat the taxpayer by what is known as under-invoicing and over-invoicing. Meanwhile, civil society activist, Anjali Damania has alleged that sugar mills in Maharashtra were allotted to relatives of politicians including those of former President Pratibha Patil. " Not a single mill is awarded to a common man. All politicians, including those of Union Agriculture Minister, Sharad Pawar, former Deputy CM, Ajit Pawar, senior BJP leader, Gopinath Munde and, of course, BJP chief, Nitin Gadkari have got these mills," she said. Proving thereby that deep friendship and cooperation exist between politicians of every ilk and the angry exchanges and name calling between them are for our entertainment. Mrs Patil is also remembered for having visited 24 countries during her term in office. She spent 79 days visiting Brazil, Mexico, Chile, Bhutan, Vietnam, Indonesia, Spain, Poland, Russia, Tajikistan, Britain, Cyprus, China, Laos, Cambodia, the UAE, Syria, Mauritius, South Korea, Mongolia, Switzerland and Austria. She signed off with a flourish, spending 12 days in Seychelles and South Africa with son in law and grandchildren at a cost of Rs 2.01 billion. She also wanted to build her post retirement house on defence land and was " pained " when criticised. Between 3 June 2009 and 30 April 2012, Lok Sabha Speaker, Meira Kumar had travelled abroad 29 times, which works out at once every 37 days. Hope they did not save on good food and drinks for our sake. Enjoy.

A mountain of debt.

Suzlon Energy, a company making wind turbines for producing electricity, has defaulted on Foreign Currency Convertible Bonds of $220.8 million which matured on 11 October. The company managed to redeem bonds worth $360.2 million in July but still has debts of $2.3 billion. It had wanted to reschedule its present repayment but bondholders refused. The total foreign debt burden for India is $345.8 billion, way above our foreign currency reserves. Of this the government owes $81.9 billion while others owe $263.9 billion. Some 56 companies are expected to pay $5 billion in 2012, of which only 5 companies can pay. The rest will try to reschedule which will raise interest burden by $700 million. These are merely external debts but internal debts are much worse. Yesterday the Stand Alone Credit Ratings of SBI, India's largest bank, was downgraded from BBB to BBB- and UBI to BB+ from BBB- by S&P because of the amount of bad loans they carry. However, MD of SBI, A Krishna says that worries about the quality of its loans are overblown. He can say that because SBI is a government owned bank so he knows that it will never be allowed to fail. The government will provide as much money as it needs just as it is doing for the bankrupt and corrupt Air India. The total bad debts of banks will cross Rs 2 trillion by end of March 2013 so where the government is going to find the money is anybody's guess given that the fiscal deficit is set to cross 6% of GDP. If the government prints notes to recapitalise banks the rupee will fall and inflation will zoom even higher. In fact S&P has threatened to downgrade India's sovereign credit rating to junk grade. " A downgrade is likely if the country's economic growth prospects dim, its external position deteriorates, its political climate worsens, or fiscal reforms slow," S&P said. But trouble always comes in dollops. Children's Investment Fund ( TCI ), a hedge fund has filed a suit in front of Kolkata High Court against Coal India Ltd, a government owned company. TCI alleges that Coal India has lost a total of Rs 2.15 trillion in lost pretax profits since its Initial Public Offering and will lose Rs 8.7 billion this year because it does not sell coal at market price. TCI has about 1% shares in Coal India. This is difficult to understand. If India has an abundance of coal and our recovery costs are lower, because of cheap labor and lower costs of acquiring mines, the market price inside India will naturally be lower. In that case market price in the rest of the world becomes irrelevant. TCI reckons it is losing dividends. We do not know what the officials promised during the IPO roadshows and therein lies the nub of the problem. We Indians are so lucky to have such a load of brilliant fellows running the country led by the super brilliant World Famous Economist. If only we could export the lot.

What goes round comes round.

The dictatorial Congress regularly uses the investigating agencies to harass opponents and the law of sedition, enacted by the British to oppress Indians, against citizens to force us to tow the line. Dr Binayak Sen was locked up on a charge of sedition until public outrage forced the courts to free him and hundreds of protesters against the Kudankulum nuclear power plant have been slapped with sedition charges. How entertaining then that the charge of sedition has come back to bite the Congress in the backside. Today a lawyer, AC Upadhyay filed a complaint in front of the Additional Chief Judicial Magistrate in Jaipur against Mr Robert Vadra charging him with sedition, imputations and assertions prejudicial to natural integration and defamation of the Indian Penal Code. Activist Nutan Thakur has filed a Public Interest Litigation against the same Mr Vadra in front of the Lucknow branch of the Allahabad High Court asking Mr Vadra to explain charges made against him by civil society activist, Arvind Kejriwal. In her complaint she also said that she has sent a letter to the Principal Secretary at the Prime Minister's Office but does not expect an answer. All this arose from charges against Mr Vadra that he was given an unsecured, interest free loan of Rs 650 million by the construction company, DLF and was allowed to buy apartments at vastly reduced prices as well as a 50% stake in  DLF owned hotel in South Delhi. The total value of all these properties is estimated at Rs 3 billion. Mr Vadra is the son in law of Congress President, Ms Sonia Gandhi and, given the foot-licking sycophancy in the Congress, sees no reason to feel embarrassed. Instead he contemptuously dismissed the activists as " Mango people in a Banana Republic " on his Facebook page. Mango people is a joke on aam aadmi. Aam means ordinary and also means mango. Trouble is that the aam aadmi is the central pillar of the Congress strategy of spending trillions of rupees on social schemes, money which is then diverted into the pockets of politicians and civil servants. Taunting the aam aadmi is to take away the main excuse of the Congress. The second is that Ms Sonia Gandhi is Italian and has never proved that she has renounced Italian citizenship. No one has ever seen an official paper from the Italian government saying that her renunciation of citizenship has been accepted and she will need a visa to travel to Europe and will not be able to scarper if things got hot for her in India. We do not know if Mr Vadra has a white British ancestor and hence feels that he is a brown sahib. His contemptuous reference to India as a " Banana Republic " is deeply offensive as India does not export bananas. In fact, under the Congress our exports have fallen for 5 straight months, falling by 10.78% to $23.69 billion in August. Trade deficit went up to $18.08 billion. No one can touch the Gandhi family, so nothing will happen. At least we can enjoy the circus. Bananas anyone?

Indians are sad.

A report by the WHO says that Indians have some of the highest mental illnesses in the world. Around 9% of people report an extended period of depression while 36% have suffered a major depressive episode. Women have a 50% higher incidence than men. TOI, 11 October. According to government figures 1% has serious mental illness, 5-10% suffer from moderate disorders while 20% of Indians need counselling at some point in their lives. Depression is the commonest mental illness with 30.7 per 1000 people in urban areas and 13.9 per 1000 in rural areas suffering from the disease. This is not surprising as income disparity is much lower in rural areas and most people own their own dwelling, even if it is a thatched shack. Food is much cheaper and, although services are few, life is much less stressful. In cities life is gruelling. Massive increase in property prices means that rents have soared. Landlords increase rents by 10% every year. Inflation at 10% has meant that food takes away a large chunk of income. Violence is common and medical costs are very high. Locked in this cycle of ever increasing expenses people see no escape and would be under severe stress. In Kishangarh in Vasant Kunj in South Delhi landlords have added 3-4 floors to their houses without planning permission and, in most cases, without proper foundations to the buildings. They rent out each room at Rs 4000 per month. So great is the demand that every room is taken and shared by 3-4 people who have come to Delhi looking for jobs. While this might be just about tolerable in winter it would be unbearable in summer when temperatures reach 45` Celsius and there are prolonged periods of power cuts. Landlords pay regular bribes to authorities and since everything is done in cash no one pays any tax. The ever increasing volumes of black money adds to inflation and to property prices, which is the only place where black money can be hidden. In this environment of no privacy and the ever present threat of rape or robbery it is no wonder that women are under much greater stress. You will not see any police anywhere. They will come if phoned but often half an hour after the call. Most of the time they refuse to register a case, called a First Incident Report, to reduce their work load and if they find that the crime was committed by a local politician or the local thug they will force the victim to withdraw the complaint. The complete lack of any justice increases the sense of helplessness and mental stress. This also partly stems from the fact that judges are above the law. Cases drag on for decades and protagonists often die before a judgement is delivered. Since most cases are minor why judges do not finish them is impossible to understand but any criticism will be seen as contempt of court and invite punishment. This encourages crime because criminals know that once they are out on bail they can expect to live in freedom till death. Is it any wonder that we are a sad people?

We are in their hands.

Angela Merkel, Chancellor of Germany visited Greece for the first time yesterday Predictably she was greeted with massive protesters and depicted as a Nazi. Demonstrators carried Nazi flags and portraits of Merkel with the typical Hitler moustache painted on. Merkel was born in communist East Germany and probably saw a lot of hardship around her even if her own family was not poor. Her father was a Lutheran pastor and she is said to believe in a simple life without ostentation, a balanced budget and to atone for your mistakes. If Spain and Greece have no money because of their own profligacy then it is their responsibility to put things right even if they have to suffer in the process. Trouble is that the Greeks and the Spanish people do not see why they have to suffer for the sins of their politicians who are rich and insulated from economic problems while the people are feeling real pain. The Greek economy was growing since 1960 although growth was only 0.70% between 1981 and 1990. From 1991 to 2000 it was growing at 2.36% and from 2001 to 2007 growth rate was 4.11%, higher than most Eurozone countries. Since 2008 it has contracted over 20%. The trouble was that corruption was rampant, the rich did not pay any tax and politicians spent money on programs to win votes creating a huge fiscal deficit which they hid with false accounting. Spain, on the other hand, was running a budget surplus but here too there was corruption and politicians allowed property prices to rise unchecked leading to a frenzy of construction. Private debt rose and the crisis of 2008 suddenly exposed Spanish banks to huge amounts of bad debts. The government capitalised the banks but that just transferred the bad debts from private hands to the government. In the US the previous Fed Chariman, Alan Greenspan kept interest too low and did not regulate banks, leading to the sub prime crisis, based on the extreme right wing ideas of Ayn Rand that all government is bad and private business should be completely uncontrolled. On top of that George Bush gave away 2 unnecessary tax cuts and embarked on 2 wars creating a huge public debt. Lehman Brothers collapsed, Bear Sterns, Merrill Lynch, AIG and General Motors had to be rescued and a lot of people lost their homes to foreclosure. The bankers who were responsible are still raking in millions in bonuses. In India property prices have risen 1000% since 2001, all politicians and civil servants are crooks, the rich do not pay tax, preferring to hide their black money in property or in accounts abroad, and inflation is over 10%. Politicians all over the world are without talent, having grabbed power through a combination of cunning, sycophancy and ruthless betrayal of their people. We are ghosts reduced to casting a vote every few years to decide which idiot is going to screw us next.

Policies in bad faith.

Our most revered Finance Minister thinks that the Indian economy is challenged and is asking the opposition to support the government's policies. TOI, 9 October. " Without reforms, we risk a sharp and continuing slowdown of the economy which we cannot afford given the imperative need to generate jobs and income for a large population, most of whom are young," said he. Really? And who is responsible for this grim state of affairs? The Congress has been in power since 2004 and he was the Finance Minister till December 2008 when he was shifted to the Home Ministry after the inept handling of the Mumbai attacks by Shivraj Patil. He has been shifted back to Finance after the inept handling of retroactive taxes by Pranab Mukherjee  who was rewarded with the post of President thhis year. He was the Finance Minister in 2008 who increased salaries of useless civil servants by 80%, started the MNREGA scheme where taxpayer money is handed out to rural people and forgave debts of farmers in a most cynical and shameless bribery of the electorate ever seen in history. This resulted in rocketing inflation, uncontrolled fiscal deficit and falling growth rate. The IMF cut its forecast for India's growth to just 4.9%, yesterday. We have been writing about this since 2008 but we have no power to make people listen. However, now the Comptroller and Accountant General has sent a report to the Finance Ministry which says that beneficiaries of the farmers loan waiver scheme were selected at random, were concentrated in certain areas and those really deserving of the waiver were inexplicable left out. More than 37 million farmers benefited from the scheme which cost the taxpayer Rs 520 billion and brought windfall gains for the Congress in the general elections of 2009. Andhra Pradesh alone got Rs 110 billion under the scheme and elected 33 Congress MPs. Maharashtra got Rs 90 billion and UP received Rs 100 billion and rewarded the Congress handsomely in return. These 3 states elected 69 of the 207 Congress MPs in the present parliament. The CAG has said that " undeserving farmers " have cornered the bulk of the benefits and " small and marginal " farmers got nothing. In 2007 inflation was at 4.74%, oil was at $64.20/barrel and the rupee was 39.33 to the dollar. Cheap oil reduced government spending and excess liquidity in other countries was spilling over into India strengthening the rupee. Today inflation is at 10%, oil is at $100/barrel and the rupee is at 53 to the dollar. In its desperate bid to increase revenue, so as to bribe the electorate in next year's budget in preparation for elections in 2014, taxes have been increased on everything but this has resulted in increasing inflation and reducing growth even further. When policies are enacted in bad faith results will be bad. Trouble is, only we suffer, not the scoundrels.

We need to be citizens.

Life has become almost impossible in India. There are too many people everywhere, poor services, too much noise, too much dirt, too much crime and a constant fear of being cheated or robbed at any moment. People do whatever they like and react violently if asked to desist. If building a house they will dump rubble on the road making it impossible to move, play music loudly if celebrating a marriage or a religious function, burst crackers till midnight to celebrate any event or park their cars obstructing gates. If you are careless you will be robbed instantly. India has one of the lowest population-police ratio in the world and of that number a large proportion is busy guarding criminal politicians and thieving civil servants. There is no community policing and the police will refuse to register cases to decrease work load. Politicians have built MK Gandhi into a Mahatma or saint and use him as an excuse to glorify poverty. This allows them to create a profusion of social schemes to help the poor and then divert the funds into their own pockets. Instead of creating infrastructure and jobs, which will give the poor financial power and freedom to manage their lives, they are made into helpless beggars, forever dependent on handouts to survive. China achieved its growth by increasing manufacturing which created tens of millions of jobs and dragged people out of poverty. By enforcing a one-child policy China forced people to be responsible for their lives, kept inflation under check and forced people to share some responsibility for the welfare of the country. According Pew Research Center 76% of Chinese now prefer to have one child. China has total exports of $1.8 trillion/year, Germany has exports of $1.4 trillion/year, Japan has exports of $780 billion/year, UK has exports of $650 billion/year and South Korea has exports of $558 billion/year. We were aiming to export $350 billion this year but will not reach the target. So where is this so called growth coming from? India has a population of 1.2 billion and if just 10% of the people have money it is equal to the combined populations of Germany and the UK. Not all the people in these countries are rich. They have children, students, unemployed and pensioners. So 10% of India can easily make an engine for growth. That leaves 90% who can see the material luxuries but are unable to satisfy their desires. That leads to crime. To build a society we need to control population, create jobs, reduce numbers of politicians and civil servants and, not just increase the numbers of police, but make them free of political interference. At present the government is adversarial and treats people as serfs to be ordered, bullied and taxed to hell. We need a government of servants. And finally we need zero tolerance. No filth, no noise, no erratic driving and polite behaviour. This has to come from the top. Sadly Indians have no role models to follow.

Lead us not into corruption.

Another day, another allegation of corruption. This time against Mr Robert Vadra, husband of Priyanka Gandhi who is daughter of Congress President, Ms Sonia Gandhi. Civil society activist, Mr Kejriwal has charged that a construction company, DLF " sold " land worth Rs 350 million to Mr Vadra for just Rs 50 million. Also the same company gave unsecured loans worth tens of millions to Mr Vadra. The question being asked is: what did DLF get in return?  DLF has denied the charges as absolutely baseless. Unfortunately DLF is a construction company and property is where all the black money is so no one will believe them. Congress has reacted aggressively as they always do in spite of being implicated in endless cases of corruption. " Is a business transaction between two private entities duly reported to the statutory authorities illegal? Is it a crime?" asked one. No. Unless one entity was giving an enormous favor to another entity, who is related to The Family, expecting to be paid back a thousand fold by some secret path and the said statutory authorities comprise of a bunch of completely supine, foot-licking lackeys who would readily look the other way for a promotion or a favorable posting. Another one said," Coming ahead of Gujarat and Himachal polls, it shows the so-called civil society groups are morphing into a political party but it is nothing more than a B-team of BJP." In other words, we in the Congress are entitled to loot any which way we want and if you dare to question us we will react with extreme malice. Already there is talk that Mr Kejriwal could meet with a sudden fatal accident. It maybe said that politicians accuse each other everyday, so what. Trouble is that criminal politicians incubate a culture of crime across society as people see criminals being welcomed into political parties and not a single person being punished for the most heinous crime. This Congress led government came into power in 2004. Between 2006 and 2011 violent crimes, including murder, rape, kidnapping and abduction, dacoity, riots and dowry deaths have gone up from 205,656 to 256,329, an increase of 24.6%. TOI, 6 October. Murders have increased by 5.6%, rape by 20% and kidnapping by 86.1%. In 2011 conviction for violent crime was a derisory 28% and in crimes against women a shameful 26.9%. Massive increase in black money leading to ostentatious lifestyles for some people, roaring inflation hurting the majority, an uncaring government only focused on somehow hanging onto power no matter what the cost and an endless list of theft of trillions of rupees for which no one is sent to prison has made people angry and frustrated and has developed a sense of contempt so deep that no act, no matter how repulsive, is shunned. Forget about Caesar's wife, just some sharam and izzat would be nice.

Reforms or trap?"

Since the government announced that foreign companies will be allowed to hold 51% stake in multi brand retail, another name for large grocers such as Walmart, Tesco and Carrefour, the markets have gone berserk. The Sensex zoomed above 19,000 and the rupee gained 300 points against the dollar. Mr Kapil Sibal, our most revered minister with multi brand portfolios, wrote an article titled, " On The Right Side of History ", in the TOI of 4 October. In this he dismisses fears that these companies will drive local mom and pop stores, also called kirana stores, out of business. His point is that these companies will only be allowed to open stores in large cities, so will not be any danger to small retailers. He writes," Prices of urban land are far too high in most Indian cities and hence it would become an uneconomical venture." Again," The ' aam aadmi ' will not go to Delhi's outskirts on his two-wheeler or small car to buy supplies in bulk which cannot be stored in the small refrigerator in his house." He does not add that even the small refrigerator is not assured of continuous electricity supply. This is precisely the point we made earlier and so find it difficult to explain the market hysteria. No one is claiming that small shops will disappear from India but there is no doubt that wherever any of these giants opens an outlet local small shops will not be able to stand the competition. He then said that these companies will invest in supply chains directly from farmers to consumers, eliminating middlemen, and hence farmers will receive a higher price for their produce while consumers will pay less for food, thus reducing food inflation. That is hokum. In China a Chinese chain Sun Art is much more successful than Walmart because people find Walmart more expensive. Earlier this year milk producers in the UK protested because large retailers were competing to reduce the price of milk by paying less to farmers. Whether we stand to gain from this move remains to be seen but the Congress will definitely gain a lot. The rise in share prices will allow the government to sell off stakes in public sector companies to raise funds to bribe the electorate in next year's budget. The government has been trying to trap ordinary people into investing in shares. It has already reduced the Securities Transaction Tax and has allowed Rs 50,000 invested in shares to be deducted from taxable income. However, yesterday morning the Nifty crashed by 900 points because of " erroneous " trade orders worth Rs 6.5 billion by brokers, Emkay Global. Circuit breakers were supposed to come into operation after a fall of 570 points but failed. In April a " buy " order was wrongly punched as a " sell " order leading to a fall of 338 points, triggering stop losses which accelerated the fall and extended investor losses. The Indian stock market is totally manipulated and ordinary people have been burnt badly in the past. So, why are they trying to trap us? Black widow?

Is Japan better than us?

In late 1980s Japan built up an enormous asset price bubble due to low interest rates. Property prices were sky high and the Nikkei was above 35,000. The stock market crashed in 1991, the property market in 1992 and Japan went into a period of deflation from 1999. Inflation, that is the Consumer Price Index, was + 1.27% in 1993, - 0.12% in 1995 and + 1.76% in 1997. From 1999 inflation was negative, which means that prices were declining, till 2005. Inflation was -0.33% in 1999, -0.8% in 2001, -0.25% in 2003 and -0.27% in 2005. From 2006-08 inflation was barely in positive territory and then again went negative from 2009-11. It has been +0.8% so far this year. Falling prices caused people to stop buying, thinking that prices will drop further which meant that companies were unable to make profits leading to rise in unemployment. Fear of unemployment made the people spend even less as they tried to increase savings. In order to discourage savings the government reduced interest rate to 1% in 1995, to 0.5% in 1996, to 0.25% and then to 0.10% in 2001 where it has been till today. This means that if you have $1000 in a bank it will earn you just $1 in one year but since prices were falling the Yen was gaining value so people refused to spend. The government did everything to stimulate the market including buying back bonds to increase liquidity and even gave away money in the form of vouchers to senior citizens to increase spending. All this spending made government debt soar. Debt to GDP ratio has been rising consistently. It was 74.9 in 1993, 125.7 in 1999, 157.5 in 2003, 170 in 2005, 192.7 in 2009, 211 in 2011 and is set to reach 230 this year. To set it in perspective Spain has a debt to GDP ratio of 90, Italy is at 120 and Greece was at 170. Perhaps the only positive factor during all this time was that Japan ran a trade surplus continuously from 1981 to 2010. The Japanese economy is export oriented but also if people refuse to spend imports will naturally fall so that balance of payment will remain in surplus. Japan has foreign currency reserves of $1.273 trillion. Japan used to be the second largest economy in the world but has now been relegated to third place by China. You would think that with all this doom and gloom and with a ballooning government debt the Yen would be plunging but the opposite is true. The Yen was 111 to the dollar in 1993, 130 to the dollar in 1998, 125 to the dollar in 2002, 109 to the dollar in 2005, 93 to the dollar in 2009, 80 to the dollar in 2011 and 78 to the dollar today. The combination of the tsunami, floods in Thailand and the strong Yen meant that Japan had a trade deficit for the first time in 2011 after 3 decades. Is there a lesson for India? The lesson is that if your currency is buying 10% less every year because of inflation its value is bound to fall. Idiots never learn.

Financial reforms are like toothpaste.

We see toothpaste ads claiming that using a certain brand will give you milky white teeth in 15 days. Well, seems that financial reforms also give you a roaring economy in 2 weeks, if you believe the freeloading press that is. The Sensex has zoomed to over 19,000 today and Goldman Sachs is predicting that the rupee will reach 51 to the dollar because the Current Account Deficit will fall to 3.5% of GDP. Even the mighty Goldman Sachs maybe wrong. The rupee is already 51.71 to the dollar and the way it is going you would expect it to go to 45 in short order. So what magic did the World Famous Economist perform to bring about such wondrous improvements? He increased the pump price of diesel, cut the number of subsidised gas cylinders for each family and has allowed foreign retailers to own 51% of joint ventures in multi brand retail. Foreign companies were already allowed 100% ownership in single brand retail but companies like Adidas, Benetton and Levis are actually cutting the number of stores. So, apart from increasing inflation he has done nothing. The reason CAD has declined is because Non Resident accounts are now earning 9.5% interest allowing fantastic arbitrage opportunities to NRIs. However, higher NRI deposits means that external debt has risen to $350 billion, well above foreign exchange reserves. Another reason for dollar inflows is the recent Fed announcement of QE3 in which the Fed is going to buy $40 billion worth of mortgage backed securities every month for an indefinite period, until the unemployment situation improves. Some of this excess liquidity will come to India improving balance of payments. However, exports in July was 14% down on last year. Exports were $22.4 billion compared to $26.3 billion in 2011, imports were $37.9 billion compared to $41.1 billion in 2011 and trade deficit rose to $15.5 billion compared to $14.8 billion in 2011. The situation is similar to 2007 when excess liquidity abroad was flooding into India pushing the rupee up to 39 to the dollar, the Sensex was above 21,000 and property prices were rising daily. The Congress took advantage of those figures to spend trillions of rupees to bribe people and win the election in 2009. General elections are in 2014 so the Congress is gearing up for a similar exercise in next year's budget but this time Consumer Price Index is already above 10% and any attempt at bribery will push it out of control. We are told that a weak currency leads to inflation by increasing the cost of imports, especially oil. What no one seems to be willing to admit is that inflation will result in a weak currency. If the rupee continues to buy less and less the market will correct its price against other currencies at some point, leading to further inflation. The RBI must keep interest rates high, control inflation and not allow the rupee to appreciate beyond 50 by buying dollars from the market. That will improve foreign currency reserves. Sadly politicians are willing to destroy the country to win elections. Else how will they loot?

Who are they after?

Kingfisher Airlines is in big trouble. It has a debt of around $1 billion which would be Rs 55 billion at current exchange rates, it has only 7 planes and its employees are on strike forcing it to suspend flights. The owner, Vijay Mallya is a flamboyant figure who likes to flaunt his wealth. He owns a Formula One racing team, Force India, an IPL T20 cricket team and is reported to have a statue of a naked former actress by the side of his swimming pool. Now his creditors are after him to pay his debts. He is reported to have raised Rs 5.25 billion against his ancestral property in Bangalore, Kingfisher Towers-Residences. However, he is not alone in owing billions of rupees. State Bank of India alone has bad loans of Rs 203.24 billions out of  total outstanding loans of Rs 5.39 trillion. ET. 13 August. Top 10 companies account for 13% of loans. Adani has Rs 695 billion in loans, Essar Rs 938 billion, Realiance ADAG Rs 867 billion, Vedanta Rs 935 billion and Jaypee Rs 454 billion. According to Credit Suisse " all banks have high exposure to same select groups ". It would seem that Mallya's debt is small change compared to the huge debts racked up by other companies. Then why is everyone after him and why is the press baying for his blood? It maybe because of jealousy. Politicians and civil servants maybe richer than him but their money is black so they cannot lead an ostentatious life style like Mallya. Their enjoyment has to be in the dark, skulking behind closed doors like vampires of the night. Or it maybe that they are after a different Kingfisher, that is Kingfisher Beer. Mallya's wealth comes from United Breweries which has sales of $4 billion and a market capitalisation of $12 billion. It is the largest beer producer in India with 48% of market share and holds 40% of brewing market in India with 79 distilleries worldwide. Kingfisher Beer is sold in 52 countries and has a good reputation for quality. Foreign companies would kill to get their hands on this business which is set to grow and some have made offers. We have already seen a succession of scams since the Congress took power in 2004 so it would be entirely feasible that some people are being paid to act as Trojan horses and hound Mallya until he sells his brewery business. There is also great pressure to open up the insurance sector. Foreign funds and even foreign governments have advised the Indian government to open up insurance. Already foreign companies like Aviva and Prudential are in India but they are not after small fry. They want to get their hands on Life Insurance Corporation of India which is an entirely government owned company. LIC has Rs 13.25 trillion in assets, 350 million policies and contributed 7% to the GDP in 2006. To get health and financial details of hundreds of millions of middle class Indians would be a gold mine. So would the scoundrels sell out for a price? With this lot any betrayal is possible.

Revelations help to explain.

On 31 August wsj.com reported that investments in infrastructure plunged 46%. Companies are trying to sell stakes in projects but no one is buying. The government has no money and the private sector has no interest in railways, irrigation, water and sanitation, ports and power distribution. Yet everywhere we go we have to pay exorbitant charges. Roads have toll collection every 25-50 kms. Delhi Airport is the most expensive in the world in terms of airport taxes. Not only do departing passengers have to pay airport tax, as in other parts of the world, but even arriving and transiting passengers are being milked. The CAG estimates that DIAL, the consortium which developed and runs the airport, has been given land around the airport, at Rs 100 per annum, from which it can earn Rs 1.63 trillion over 60 years. In a revealing article in the TOI on 30 September, Mr SA Aiyar writes," Five years ago investors were pouring money into infrastructure companies, and their share prices skyrocketed. Everybody thought these companies were entering a golden period. This included politicians who demanded huge kickbacks ( the 2G scam is only the tip of the iceberg )." Today all these companies are in serious financial difficulties and their share prices have crashed. GMR Infrastructure, which runs Delhi Airport, lost Rs 940 million in April-June quarter and its share price is down from Rs 131 to Rs 24. GVR Projects and Infrastructure lost Rs 640 million and its shares are down from Rs 85 to 14. Lanco Infratech lost Rs 4.41 billion in the last quarter and cannot repay its debts. Its shares are down from Rs 84 to 14. Hindustan Construction lost Rs 2.22 billion in 2011-2012 and its shares are down from Rs 132 to Rs 17. Reliance Power is down from Rs 500 to Rs 97, Reliance Infratech is down from Rs 2584 to Rs 545, Reliance Communications is down from Rs 820 to Rs 65 and Idea Cellular is down from Rs 157 to Rs 85. Companies were stupid and bid for projects thinking that they can only make profits from collecting fees from users. Indeed the previous Finance Minister, who has now been elevated to President, boasted that companies were paying the government billions of rupees to be granted contracts for building roads. However, they were given vastly exaggerated estimates of how many users to expect and were made to pay huge bribes in expectation. They did not get access to land for building, environmental and other clearances were delayed because of infighting between different ministries ( there are a total of 47 ministries at the center alone ) and a change of state government to a hostile political party could mean the cancellation of a project altogether. This government, led by the World Famous Economist, is the most corrupt and useless the country has ever had. Sadly people like Mr Aiyar seldom write such informative articles. Usually they are in praise of how honest and capable he is. Absolutely wrong.

Is it in the water?

By all accounts the Pakistan economy is in even bigger trouble than the Indian one. After growing strongly from 2003-2007 growth rate is down to 2.4%. It has a population of 180 million which is growing by over 3 million per year. Consumer inflation last year was at 13.7% and interest rate is at 12%. The Pakistani rupee is 95 to the dollar and yet snippets of news seem to indicate that women are really hot across the border. After Bin Laden was killed 2 of his widows came to blows inside a Pakistani prison where they were being held. TOI, 21 April. The eldest wife, Khairia claimed that the youngest one, Amal " demanded sex 24 hours a day ". Khairia, 61 years old, was said to be jealous that 29 year old Amal got to sleep with Bin Laden all the time. Khairia accused Amal of sticking to Osama like a prostitute who wanted " sex throughout the day ". We do not have first hand knowledge but were led to believe that prostitutes are highly professional ladies who only " stick " to you if they are paid. In advance. So are we to understand the Bin Laden was paying Amal by the hour to stick to him? No wonder the poor fellow was found with tons of aphrodisiac herbs. Had he been left alone he would probably have died of exhaustion. But Americans love grandstanding. Now we hear that the Pakistan Foreign Minister, Hina Rabbani Khar has fallen in love with the scion of the Bhutto family, Bilawal, son of President Asif Ali Zardari. Bilawal is 23 years old and single while Ms Khar is a 34 year old mother of 2 children. She is still married to one Feroz Gulzar. Apparently pop Zardari found the two of them in a clinch in his own residence. The story was broken by a Bangladeshi tabloid. Why?  What were our intelligence fellows doing ? Why were they not the first ones to find out ?  They are as useless as our investigation fellows. Seems that Ms Khar wrote notes to Bilawal suggesting future liaison. Female Indian journalists are seriously jealous of Ms Khar who is said to be beautiful, wears strings of pearls and carries a Birkin bag, whatever that is. She is hardly likely to keep her pearls in a jute sack, is she? Pop Zardari is said to be very angry. Why? Did he want to have a little nooky with the lady himself? Is that why he picked her for the post of Foreign Minister? So many questions but few answers. However, there seems little doubt that the ladies across the border are not miserly about distributing their favors. How different from the " Bharatiya Naaris " that we have here. They are scandalised by the slightest hint of sex in movies so our government works hard to protect their tender sensibilities by banning everything. Must be something in the water. How the men must be enjoying themselves. No wonder our lot keep going to Pakistan on " bended knees ".