"Patriotism is
the willingness to kill and be killed for trivial reasons."
—Bertrand Russel (British,
1872-1970)
Word
for the day
Cantankerous (adj)
Disagreeable to deal with; contentious; peevish, e.g., A cantankerous, argumentative man.
Malice
towards none
Where would you
place the dignity of a human being, in your order of priority?
Would you like
"if" and "but" to be used when it comes to your dignity?
First random
thought this morning
According to various legends related to the medieval king
Vikramaditya, his throne, studded with 32 statues of fairies, had two
qualities: (a) the throne would allow only such people to sit on it who would
possess qualities of a noble and strong human being; and (b) anyone who would
sit on the throne would automatically acquire the qualities of a great king,
e.g., valor, justice, magnanimity, foresight etc.
We the people of India continue to believe that the
thrones of CM and PM etc possess similar qualities. We sincerely believe that
any crook, anarchist, bigot, or criminal will become a noble king as soon as
he/she sits on the throne!
Is it a case of Cognitive dissonance?
Under normal circumstances the economic behavior of a
person should be a subset of his general behavior.
For example, the outlook about
socio-political and geopolitical environment shall normally reflect in the
business strategy.
If one believes that the
disharmony, strife and stress is likely to rise in the society and politicians
do not have an appropriate strategy to deal with social strife and unrest, then
such person should normally—
(a) not be investing in fresh capital in business;
(b) should be looking to minimize leverage;
(c) should be seeking higher protection on his life and property;
(d) should be seeking to geographically diversify his assets by
investing or hoarding in foreign assets; and
(e) certainly look to minimize his exposure to the state.
Similarly, if an investor or
businessman believes that geopolitical risks are rising to a specific
jurisdiction, he should be diversifying his economic assets away from such
jurisdiction.
Now applying this thought to the
current Indian context, we get a mixed picture.
If we accept the trends in media,
social media and popular political discourse at their par value - our country
is facing heightened degree of social stress and unrest; and elevated level of
geopolitical threats.
Politically, our country not
stands vertically divided, with about 45% voters supporting the incumbent
government and the parties supported by over 35% trying to stitch together a
united opposition. Such polarization has occurred in Indian politics almost
after 4 decades.
Total dominance of an individual
(PM Modi) over the day to day executive functions in states comprising more
than 65% of India's population shall also alarm an investor or businessman.
While this dominance brings many positives, it also raises the specter of (a)
erratic policy changes, e.g., abolition of currency; (b) probability of a full
scale war (I would say from 0% under MMS to 5% under Modi, is a 5x jump in risk
perception), etc.
Regardless of these trends and
circumstances, we have seen that—
(a) domestic investors have increased their stakes in risky assets
(small and midcap securities) materially, while investment in gold has fallen;
(b) the growth in insurance is not commensurate with the risk
perception;
(c) The exposure to government (deposits in PSU banks, participation
in government projects, gold bonds etc.) has increased materially;
(d) outward FDI has fallen dramatically and outward remittances have
not shown any acceleration;
(e) corporate debt stays at elevated level, and the ownership has
moved away from banks to public......to continue next week
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