The Prime Minister made a fairly sad speech recently to theindustry leaders reminding them of their social responsibilities. Does it not pain to see the leader of the nation in such distress? Worse still, our PM knows the details of what is happening inside out. He knows about the spiraling impact of the actions that may be taken by the Corporates on the Economy as awhole. As people starting to adjust to reality we come to know that nothingreally comes easy.

More than the global slowdown the main issue glaring at us today is unpredictability. If we know what is going to happen in the next few months however bad, there can be predictability and preparation for what is going to come. The analysts with their PhDs are coming a cropper with their predictions. If we look at the statements issued by all the IT majors in India,over the last few weeks only adds to the confusion. One day there is a statement that “jobs are safe and hiring is stable”. I have to admire the conviction in which sucha statement was issued in this environment. A couple of days later we hear another statement that “steps will have to be taken if uncertainty persists. The financial markets as confused as one can be has started to ignore all these statements and is working like an ECG machine with high BP. Our Industry leaders look like a bunch of lost 10^th graders who have been posed with a number of questions which are out of syllabus in a public exam. The myth of working in a large corporation for Job security is on the verge of being shattered. Jackwelsh once remarked “No company or organization can claim to offer Job security.It is only satisfied customers who can do so”. Today we have to question this as well. Only satisfied customers who have satisfied customers themselves and whohave financially strong backing from people who are financially strong and in asound economy can try to offer Job security. If the preceding line is too complicated to understand it is easier to understand that there is no Jobsecurity. In one instance, there are 1900 people laid off before someone remembered family commitments and took them back in 24 hours. In other cases someonewants to clean “Bottom performers”. Not sure what this is about because bottomperformers should have never been in any healthy system.

So far we have not seen significant impact yet in India as expected. So is the impact marginal or are we still waiting for the bubble to burst? Are we postponing the inevitabledue to our ignorance? Is the political system holding back till elections? With the crude prices down in excess of 50% why are we still paying the same fo rpetrol and diesel and not to forget LPG? To be fair to them the prices did notgo up steeply when crude was spiraling upwards. But that is not how a Capitalist economy works. Why does the government not allow the correction to happen and act for bringing up the economy out of recession than holding on tosomething unreal and pretend? Let the system correct itself it and infuse fundsto restart the economy again? We aretrying to strengthen the building in a hill when there is an impendinglandslide. You merely need to move the people to safety and let the landslide occur

Interest rates, CRR are being lowered to fuel growth byavailability of credit. But the issue today is a serious fund crunch. Banks arefocused on recovering and reviewing their existing portfolios rather thangetting into fresh ones. So I am not sure whether there will be a significantimpact will be felt by these steps, any way I am not complaining as my mortgagepayments would be lower. In the US the rates have been reduced to 1% by aseries of reductions and not seen much out of it. But they had resorted toother steps including the $700bn bailout plan and then went to the interestrates to restore confidence. Not all appears right there as well. Short sellingwas banned on some of the stocks. Again a case of artificial hold up of thelandslide. Let the corrections happenand assess the right impact and then go about rebuilding.

Realty prices were going to see some correction for a longtime now. The correction just is not hitting yet. Sure the fall whenever ithappens is going to be steep and hit even harder than ever before

By trying to apply quick fixes we are again endangering thelong term prospects. During the upturn there was no intervention to control thegrowth of the bubble. So why do we have intervention now to sustain the bubble.We should know and deserve to know where we stand and the only way that can bedone is by allowing the system to correct itself completely. Please allow theaircraft to land though it may be different destination and then let us figureout where to fly. Do not change the tyres mid air and apply quick fixes andcrash the plane.

As discussed in my previous articles, India is a youngcountry and can learn to deal with the situation. For the youth they will seemany such turns in the future. This experience will help in building a strong anda secure future and reap the right benefits of the growing economy. In spite ofour best efforts to proactively manage the situation, we are also forced towait and watch and react only when it hits us. Until then we need to watch the situation haplessly. I never hoped morethat I could be wrong in my assessment of the financial situation but this seems to be the reality that is going to be shortly presented to us.

"Beware the ides of March"