Jas Jain's MarketThoughts

» Jas_Jain - Jefferson:"...the banks will deprive the people of all property"

“"…, the banks will deprive the people of all property until their children wake up homeless." Thomas Jefferson"

Early great Presidents of Americans were very suspicious of the bankers (the last one being Andrew Jackson); and for good reason, because these so-called bankers have a very long history of depriving people of their property. These Bankrupters and Fraudsters know, from experience, that their is no better way to plunder a person’s property than to indulge him in borrow-and-spend with the property as the collateral. It is a technique whose efficacy is like clockwork. Greenspan is the front man for Bankrupters and Fraudsters of New York City (BFNYC). America’s financial system stinks. The stink has been bottled up but the bottle will explode.

Make no mistake, when the Housing Bubble bursts, and it is not a question of if, deflation will walk in like the great Shogun Tokugawa because the ground was cleared of enemy. The only enemy of deflation in the US has been ever-increasing Debt. Yes, “Get Ready for Deflation.” Trust me, deflation would be great for the shrewd and devastating for the unprepared.

Jas

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http://www.safehaven.com/article-3009.htm

May 04, 2005
Get Ready for Deflation
by Steve Moyer

"If Americans ever allow banks to control the issue of their currency, first by inflation and then by deflation, the banks will deprive the people of all property until their children wake up homeless." ~ Thomas Jefferson

I know. I know. Home prices are skyrocketing. Gas costs $2.79 a gallon. Health care costs are getting out of hand. College tuition is rising to infinity...and beyond! Even interest rates are trying to edge up. According to Elliott Wave International, Proquest's database revealed that the six leading U.S. metropolitan newspapers featured 139 articles about inflation during March; just two having anything to do with deflation. Concerns about deflation - somewhat evident in the media in mid-2003 - have pretty much gone away, wouldn't you agree?

True, deflation is not creating headlines right now but that monster is quietly lurking in the background as existing pockets of inflation ironically add fuel to the deflationary fire. There is really no way around it, money supply pumping or no money supply pumping. Safehaven readers should take heed and, in some cases, take action - the relentless drag of deflation is coming soon to a theater near you. I hope you'll ready yourself for it.

Understand, deflation does not just mean "falling prices." Automobile, computer and home electronics price-cutting is symptomatic of early deflationary pressure, but in the context of this thesis, I am referring to the coming Big Kahuna - a contraction in credit that, once its psychology takes hold, will change the rules of the asset game for at least a decade.

History has shown that post-bubble economies face overwhelming deflationary pressure as it is, but the Alan Greenspan Federal Reserve's "Let's Get This Party Re-Started By Throwing Gun Powder, Kerosene and Nitroglycerin On The Post Mania Fire" approach to monetary policy all but assured it.
When the tech bubble initially burst, the loss of capital, U.S. jobs and personal income created an immediate demand for cheaper goods, and in very short order the manufacturing sector of our economy moved lock, stock and barrel to China, which was better set up to facilitate that type of demand. American corporations, suddenly in full cost-cutting mode, quickly bought into the new paradigm and the U.S. lost more than 2,000,000 manufacturing jobs by the end of 2002.

The Fed, in an all-out attempt to soften a post-bubble free-fall (and blithely ignoring everything modern financial history had taught them), aggressively lowered interest rates (to 40 year lows), which essentially encouraged Americans to incur debt in order to spend money as a way to give the economy a badly needed boost. We needed a shot in the arm, and given the stock market's free-fall and what can only be described as a preposterously low (just above 0%) national savings rate and miserable job and income numbers, Greenspan & Co. decided there was only one avenue left to travel. The Fed lowered interest rates (to a Federal Funds rate of 1%), furiously pumped the money supply and wittingly enticed people to use their homes as ATM's in a band-aid style, stunningly misguided attempt to get us over the post-bubble economic hump. "Reflation," the experts called it.
Whereupon, intoxicated by low interest rates, Americans went on a borrowing and spending binge the likes of which this planet has never seen.

Perhaps you've grown accustomed to the dozen or so credit card solicitations in your mailbox each week ("2.9% APR for the first 6 months!!"), or one year, no-payments-no- interest at Circuit City (and The Good Guys and Home Depot and Best Buy and Orchard Supply Hardware and Sears and pretty much every other big box retailer in town), or no fee home equity loans up to 100% equity on your house. Perhaps you've purchased a car with zero down and 1.9% GMAC financing, or better still, 0% financing for five years. Consumer credit has become the name of the economic game. So be sure to sit down when I tell you that revolving credit card debt in the United States has increased exactly 58,868% since 1968 (that's right, not 580%, not 5,800%, but 58,868%. Whoa, momma!).

Esteemed market guru Robert Prechter, Jr. writes, "Near the end of a major expansion, few creditors expect default, which is why they lend freely to weak borrowers. Few borrowers expect their fortunes to change, which is why they borrow freely. Deflation involves a substantial amount of involuntary debt liquidation because almost no one expects deflation before it starts."

The problem is, folks used the equity in their homes to back it all up. Refi became the name of the game. Up to your eyeballs in debt? Consolidate it into your home loan! Need cash? Refi, baby! Looking to buy a house? "Hey, buddy, how about a quick 100% (or 110% or 120%) of value loan!" Mailers offering "$1,000,000 loans for $3300 a month, EZ qualifying!" flood my office desk. "100% CASH OUT REFIS!" scream others. Go ahead and read that Prechter quote one more time. Enticingly low interest rates allowed folks to rationalize an entire pot full of financial decisions.
So what if everyone borrows their way to "prosperity?" Is there a problem, officer? Unfortunately, history says yes - credit bubbles don't have happy endings. Eventually, folks decide they have borrowed enough and they cut back. The credit-driven economy falls of its own weight. Even low interest rates no longer entice people to borrow. The short-term fix ends up adding to the post-bubble, long-term problem, as the increasing burden leads to a braking economy, a credit contraction, falling asset values and not enough liquidity left in the marketplace to prop everything back up. The result is a full-blown liquidity crisis, affecting all asset values - stocks, bonds, real estate, precious metals, collectibles - at least for a time.

"The psychological aspect of deflation...cannot be overstated," Prechter continues. "When the social mood trend changes from optimism to pessimism, creditors, debtors, producers and consumers change their primary orientation from expansion to conservation. As creditors become more conservative, they slow their lending. As debtors and potential debtors become more conservative, they borrow less or not at all. As producers become more conservative, they reduce expansion plans. As consumers become more conservative, they save more and spend less. These behaviors reduce the "velocity" of money, i.e., the speed with which it circulates to make purchases, thus putting downside pressure on prices. These forces reverse the former trend."

Market technician Phillip Erlanger refers to the current phenomenon as "inflation in all the wrong places and deflation in all the wrong places." Yes, there are pockets of inflation evident within the global economic framework but those will prove to be gnats on the back of the slow-moving deflationary elephant. Mostly, those rising costs put the squeeze on producers, who lack the pricing power necessary to pass those cost increases along (go ahead and ask now just-above-junk-bond rated General Motors about that). In fact, while rising crude oil and fuel prices seem to skew the numbers towards inflation now, the squeeze it imposes upon consumers and others will actually be deflationary, as people curtail purchases and start looking for ways to dig their way out of debt (the good news is, deflationary history suggests that oil and gas prices will fall, as well).

Forget the mainstream financial media; the reversal has begun. The again-declining stock market - particularly at this point in the post-bubble wave pattern - is a telling and leading indicator, as is the drop in the money supply and in the velocity of money. Commodity prices are falling. The "flattening" of the bond yield curve (short term interest rates rise; longer term rates don't), a precursor to economic recession, looms large. And given the fact that Americans have spent the last three years using the equity in their homes to "buy stuff," there is really no way around it at this point. Consumers are quietly putting their clothes back on after their three year borrowing/spending orgy. The irresponsible, Fed-encouraged post-bubble borrow-fest is winding down and there simply is not enough savings nor fundamental (read: manufacturing) strength in the U.S. economy to support any investment market - at least for a while. Up to their eyeballs in debt, the rules of the consumer game are about to change and debt reduction is sure to be the coming rage. Deflation is upon us.

Because the credit contraction will be taking place in a post-bubble framework, the result will be a slow, grinding, painful decade-long decline for most, if not all asset classes. As the money supply necessarily contracts (and without a national savings rate to back things up), today's asset values will become downright nostalgic.

Most significantly, when the post-bubble shakeout is winding down, the vast majority of Americans will be unable to play the investment game, and cash will be king.
Those who prepared themselves by holding cash will be able to cherry-pick assets in many cases for literally pennies on the dollar. I sincerely hope you'll be one of them.

Steve Moyer,
Ponder-This.net

-- posted by Jas_Jain

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» Jas_Jain - FW (With Comments): Trapped

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“If the US economy were truly healthy, the Fed should target the federal funds rate in the 5% to 5.5% zone.”

A week ago, an e-friend sent me Roach’s forecast of 5.5% Fed Funds Rate. I told him that accidents would happen on the way to 5.5% such that we will never get there. I have doubted even going beyond 3-3.25%. Let us see what Mr. Roach thinks a week later: “This week could mark the Fed’s last rate hike of this cycle.” Economists are known for changing their mind on a dime.

American economy is trapped, and wrapped, in fraud! Let us see how long it takes the clueless people around the world before the widespread expose of the fraud results in loss of confidence and collapse. Of course, the collapse of the American economy will take the world with it.

If I have the authority to loan your money to anyone, without any negative consequences and great short-term benefit to me, how long before I will start reckless lending, make a killing in fees and bonuses, and run? I sure wouldn’t be around to collect and return your money back to you. This sums up American banking and this practice is been exported to the rest of the world.

Pushing products is one thing and pushing Debt is quite another. As Schumpeter, commenting of the causes of Great Depression, noted that salesmen could be bankers. Bankers these days are worse than salesmen in their promotional tactics. Another gem from the great economist, ***** “… economists, bankers are worth their salt only if they make themselves thoroughly unpopular with governments, politicians and the public.” *****

A corollary to this is:

Any economist, or banker, who is popular with governments, or politicians, or the public, is a charlatan.

I sincerely hope that I am not popular with any of these.

Jas

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May 02, 2005

Global: Trapped
Stephen Roach (New York)
With America’s cyclical impetus now fading, post-bubble fault lines could deepen -- making it all but impossible for the Federal Reserve to normalize real interest rates. This week could mark the Fed’s last rate hike of this cycle.

With all due respect to the “soft-patch crowd,” maybe there’s something else going on. I continue to see the macro debate through a very different lens. Sure, there may be some temporary aspects to this spring’s global growth scare. But, in my view, there could well be a far more powerful force at work -- the ongoing post-bubble shakeout of the US economy. By default, that means a US-centric global economy could be trapped in the same quagmire.

I am not a chartist, but I continue to be struck by the eerie similarities between post-bubble patterns in Japan and America. Five years after the bursting of the US equity bubble, the Nasdaq continues to track the post-bubble Nikkei very closely. Is this merely a coincidence or, in fact, a visible manifestation of the long and drawn out perils of a post-bubble shakeout? I fully realize the indelicate nature of this question. Everyone -- from investors and recovering dotcomers to policymakers and politicians -- seems united in their conviction to dismiss this possibility as nothing short of blasphemy. Federal Reserve Chairman Alan Greenspan summed up the consensus view on this critical issue over two years ago, when he famously declared that “…our strategy of addressing the bubble's consequences rather than the bubble itself has been successful” (see his January 3, 2003, speech, “Risk and Uncertainty in Monetary Policy,” delivered to the annual meetings of the American Economic Association in San Diego, California).

The risk, in my view, remains that the Chairman may have been premature in taking this victory lap. In large part, that’s because history tells us that major asset bubbles have long and lasting consequences that are not easily remedied by conventional policies. While the painful experience of the 1930s is the most obvious example in modern times, Japan’s persistent deflation fully 15 years after the bursting of its bubble is hardly a lesson to take lightly. Nor, unfortunately, is the state of the US economy as it faces what may well be yet another pitfall in its own post-bubble journey.

The academic literature on bubbles is virtually unanimous in concluding that the central bank is the key actor in this story. Whereas bubbles are inevitably an outgrowth of excess liquidity, the post-bubble policy stance of the monetary authority is viewed as decisive for any recovery. Unfortunately, the success rate of post-bubble recovery operations is not high. Once the macroclimate enters the deflation-risk zone at low nominal interest rates, the escape path becomes exceedingly problematic. Mindful of this tough history, America’s Federal Reserve was quick to lay out a different game plan (see the well-known International Financial Discussion paper published in June 2002 by the Fed’s staff, “Preventing Deflation: Lessons from Japan's Experience in the 1990s,” by Alan Ahearne; Joseph Gagnon; Jane Haltmaier; and Steve Kamin et. al.). The main lesson from this research is that the central bank needs to move quickly and aggressively in the aftermath of the bursting of an asset bubble. On that count, the Fed’s post-bubble reaction was quite different from that of the Bank of Japan. Whereas the BOJ kept tightening aggressively fully two years after the Nikkei bubble popped in December 1989, the Fed began easing within nine months after the bursting of the US equity bubble in March 2000. The key question is whether the Fed’s approach has worked.

In my view, the jury is still out on America’s post-bubble travails. In large part, that’s because the Fed has not been able to extricate itself -- or the US economy -- from the low real interest rate policy it adopted in the aftermath of the burst equity bubble. Fully five years after Nasdaq 5000, the federal funds rate remains basically “zero” in real terms -- a 2.75% nominal rate that is still negative when judged against a 3.1% headline CPI inflation rate and slightly positive when measured against a 2.3% core inflation rate. By holding the real policy rate at or below the zero threshold for such a long period, the Fed has nurtured the development of the Asset Economy -- dominated by American consumers who have become dependent on the persistence of low real interest rates and the concomitant wealth effects generated by a steady stream of asset bubbles. With the equity bubble now having morphed into a property bubble, the Fed’s predicament becomes all the more intractable. That’s because the monetization of wealth created by property appreciation can only be extracted by debt. While that debt may seem affordable at low interest rates, it becomes exceedingly onerous at higher interest rates. With record levels of household sector indebtedness now pushing toward 90% of GDP, debt-service ratios already near historical highs, and ever-frothy housing markets drawing extraordinary support from rock-bottom interest rates, the perils of aggressive Fed tightening are plainly evident: Rate hikes could well mean game over for the income-constrained, saving-short, asset-dependent, overly indebted American consumer. If that’s correct, the Fed and the BOJ may both be in the same predicament -- unable to extricate themselves from bubble-induced low real interest rate quagmires.

In that context, it is important to stress that a so-called soft patch is a very different development for a post-bubble economy than it is for a more normal one. In a fully functioning economy, the downside of a temporary disruption is normally offset by organic growth in wage income or, in more dire circumstances, by monetary and/or fiscal stimulus. In today’s dysfunctional post-bubble economy, those options are not feasible. For starters, the private sector wage-income generating capacity of the US economy remains woefully deficient -- only about a 5% cumulative increase (in real terms) 40 months into this recovery versus 15% gains, on average, over comparable periods in the preceding five cycles. In part because of globalization but also because of bubble-induced hiring excesses of the late 1990s, cash-rich US companies remain reluctant to step up on both the employment and real wage fronts. Moreover, the combination of large budget deficits and zero real short-term interest rates all but rules out further policy stimulus at this juncture. Normally, overcoming a soft patch is no big deal for an inherently resilient macro system. But for a post-bubble US economy that is out of policy stimulus, it may be a different matter altogether.

The energy-shock scenario provides an alternative perspective. Just as the lagged effects of rising energy product prices have had an adverse impact on consumer and business spending, the mean reversion of falling energy prices is widely viewed as the functional equivalent of a tax cut that will spark a rebound in the economy. With oil prices now slipping beneath the all-important $50 threshold rather than lurching through the $60 threshold as feared just a few weeks ago, the soft-patch crowd sees falling energy prices as a distinct positive to US growth prospects in the second half of this year. In my view, however, it is entirely premature to bank on such an impetus. First of all, the case for sustained relief in energy prices is arguable -- especially in light of ongoing rapid demand growth from China and little near-term relief from the inelastic supply side of the oil equation. Secondly, persistent deficiencies in the economy’s organic wage income generating capacity point to limited macro traction in the event of all but the most precipitous declines in oil prices.

There is another reason to be wary of the energy-price-induced soft patch scenario -- the distinct possibility that any such impetus may well be undermined by the “payback effect” from the massive anti-deflationary policy stimulus of 2003. The playbook on post-bubble policy defense left US authorities with little choice other than to move aggressively toward policy stimulus in response to the deflation scare in the spring of 2003. While those measures were successful in sparking a meaningful reacceleration in the US economy, their impacts now appear to have run out of steam. That’s especially the case for long-lived items such as consumer durable goods (i.e., motor vehicles) and for business spending on capital equipment and software. History and analytics have long told us that rapid growth in both of these “lumpy,” or big-ticket, spending categories almost always borrows from gains in the near future. That’s very much an outgrowth of what economists call a classic “stock adjustment” effect -- a reduction in the flow of new demand when the stock shoots above its desired level.

Recent trends in US economic growth underscore the likelihood of just such a payback. Over the 2Q03 through 4Q04 period, when real GDP was surging at a 4.5% average annual rate, fully 1.8 percentage points, or 41%, of that growth came from combined increases in consumer durables and business spending on capital equipment and software. That contribution was well over twice the 18% combined share of these two sectors in the economy. In other words, the biggest spark to the US growth dynamic over this seven-quarter period of surging GDP growth was concentrated in sectors where payback effects are the norm. At work on the upside were aggressive vendor financing campaigns for motor vehicles, along with a year-end 2004 expiration of temporary tax incentives for capital goods. And now it could be payback time, with the downside of stock-adjustment effects undermining the stimulative impacts of falling energy prices. The just-released 1Q05 GDP report certainly hints at this possibility: The combination of consumer durables and business equipment and software spending accounted for just 0.6 percentage point of GDP growth -- less than one-third the contribution made over the prior seven quarters. Given the magnitude of the preceding overshoot, this payback could be just the beginning -- pointing to a headwind that could be long lasting in offsetting the impetus from all but the most extreme oil price collapse. Meanwhile, an inventory back-up accounted for fully 39% of total GDP growth in the period just ended -- an especially ominous sign in a faltering demand climate. The case for an extended soft patch -- or something worse -- can hardly be ruled out

It was a great ride on the US growth front for a while. But post-bubble excesses have only been compounded during this cyclical respite. An unprecedented drawdown of saving and an ominous buildup of debt, in conjunction with a lasting shortfall of organic income generation, solidified the emergence of the Asset Economy. If the US economy were truly healthy, the Fed should target the federal funds rate in the 5% to 5.5% zone. However, with America’s cyclical impetus fading, post-bubble fault lines could deepen -- making it all but impossible for the Fed to normalize real interest rates. Under those circumstances, this week could mark the Fed’s last rate hike of this cycle.

Financial markets are unprepared for this possibility. In an extended soft patch, growth and earnings expectations are at risk -- pointing to downside pressure on equity markets. Moreover, the inflation scare could be over -- pointing to the possibility of another bullish run in the bond market. In the end, the post-bubble endgame always boils down to the central bank. Unfortunately, like the Bank of Japan, America’s Federal Reserve doesn’t have a viable post-bubble exit strategy. Unlike Japan, however, the US has the mother of all current account deficits -- the pivotal excess of an unbalanced world. Watch out for the dollar: If US real interest rates don’t rise, rebalancing should swing to the currency axis and push the greenback sharply lower. Such are the perils of the post-bubble trap.

-- posted by Jas_Jain

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» Jas_Jain - A BOLD Prediction On Relative Performance of USTs Vs. US Scams

A BOLD Prediction On Relative Performance of USTs Vs. US Scams

Excerpt from Merrill Lynch Research:

“… nature of the demographic shifts in coming years is likely to favor bonds over stocks as a general rule, and this process may already be underway. This by no means suggests that the vagaries of the business cycle earnings, interest rates, sentiment will always trigger bond market outperformance, but it does suggest that the nature of the life-cycle will underpin demand for duration, safety and yield at a time when there is a shortage of such product. As a client told us last month after reading our initial views on this process, "if real estate is all about location, location, location, then retirement will all be about income, income, income.”

I have held this view for quite some time, but now that the Street firm with the Big Bad Bull symbol seems to agree with my view of the US Treasury bonds it is time to state is succinctly:

The day is not far when the long-term US Treasury bonds, with the highest yield in 20-25 yeas maturity range, will outperform the US Scam Market, as measured by S&P 500 Index, on a total return basis, for 1, 3, 5, 10 and 25 years. There is a reasonable probability that it might even outperform over a 50-year period.

Revival Of Hope For Scam Lovers Is Nearing An End

There is nothing good that lies in the waiting for Scam Lovers, neither economic fundamentals nor demographics. Here is what the same research has to say:

“What about the future? Well, the population that has the greatest intensity for buying equities is actually going to slow dramatically from 2005 through to 2025.”

Oh, BTW, the largest number of IPOs came to market in the past quarter since the Q1 of 2000. Aren’t there some bad memories? Also, Corporate Crooks can’t seem to sell their own Scams fast enough. I know, I know, Scam Lovers are suppose to ignore such things because they are “normal.”

What part of – the network of Corporate Crooks of America is running the Scam Market for their sole benefit – don’t Scam Lovers get? Lot more pain lies ahead for Scam Lovers than the one endured during 2000-2002.

At least, you have been dully informed and amply warned.

Jas

-- posted by Jas_Jain

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» Kirk - Crime

.
This might help you understand business all across the World better.

"Stripped of ethical rationalizations and philosophical pretensions, a crime is anything that a group in power chooses to prohibit."
-- Freda Adler

-- posted by Kirk

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» Jas_Jain - Re: Crime

In response to Crime posted by Kirk:

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"This might help you understand business all across the World better."

It is you who needs the understanding, Kirk, not I. In America, the "group in power" consists of Corporate Crooks of America. They are above the law, as Scam Options have clearly shown.

The real culprits are those who feed these Crooks by buying Scams.

Jas

-- posted by Jas_Jain

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» azxcvbnm - Re: Re: Crime

In response to Re: Crime posted by Jas_Jain:

But now that the scam has been exposed, companies are reducing options payouts. And there must be a point where old folks would be satisfied with the dividend a stock pays out, regardless of loses to principal. I've heard several cases where retirees purchased GNMA and High-Yield bond funds just for the income and weren't worried about any loses in NAV. Could that happen with dividend paying stocks?

Another 50% drop like we had during 2000-2002 would raise the dividend yield of the S&P500 over 4%! Can you say undervalued? I think there is a greater danger of locking in 4.1% for 10 years in a bond than with companies that continue to increase dividends year after year and already yield 3%. I'd rather be in a money market fund, soon to be yielding over 3%, than a long term bond.

I'm not saying stocks are undervalued now, but they are getting less expensive by the day. At what point Jas, would you say that stocks had become undervalued? S&P500 of 800? 700? Surely you would be buying at 600 right?

-- posted by azxcvbnm

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» Jas_Jain - Re: Re: Re: Crime

In response to Re: Re: Crime posted by azxcvbnm:

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" Another 50% drop like we had during 2000-2002 would raise the dividend yield of the S&P500 over 4%!"

No. Most likely, of the 20% of the companies that account for more than 50% of the dividends majority will cut dividends in a severe recession, or likely depression. I expect S&P 500 dividend to go above 6% before we have any kind of a bottom. Do you really believe that GM will keep paying its dividend? Do you remember Ford cutting its dividend drastically? Almost all financial companies would cut, or stop paying, the dividends.

"At what point Jas, would you say that stocks had become undervalued? S&P500 of 800? 700? Surely you would be buying at 600 right?"

No, I am not a sucker. I will not buy Scams until S&P 500 yields 4% ABOVE 10-year UST! 10-year yielding 2% and S&P 500 yielding 6% is something that would make me change my long USTs and short Scams positions in a big way.

It is the DEBT, Stupid!

Jas

-- posted by Jas_Jain

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» azxcvbnm - Re: Re: Re: Re: Crime

In response to Re: Re: Re: Crime posted by Jas_Jain:

Wow, stock yields haven't been above bond yields in my lifetime! I read somewhere that during the worst of the 1929-1932 bear market, there were many profitable companies yielding 10%, but people were just too scared to buy. Finally the yields got so attractive that people just had to buy. What caused yields to go so high wasn't lack of profits, but rather investor fear. I'm glad that most companies seem to understand the need for dividends. I was shocked that United Online (Netzero and other ISPs) of all companies started a dividend! If we see more tech companies start paying dividends, it could be a signal that the tech bust is over and that business is stable.

-- posted by azxcvbnm

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» SteveT - Re: Re: Crime

In response to Re: Crime posted by Jas_Jain:

Jas, I think you are on the right track but don’t know that the problem is a bad as you characterize it. Would you care to share your opinions of how business operates in India? Is corruption, treachery and bribery as widespread there as in the USA?

-- posted by SteveT

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» Jas_Jain - Re: Re: Re: Crime

In response to Re: Re: Crime posted by SteveT:

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"Would you care to share your opinions of how business operates in India?"

Hello Steve,

I have been out of India for some 30 years and not as up-to-date as I would like. In summary: India is a basket case; Pakistan and Bangladesh are even worse. The thing about general corruption and fraud is that once it takes root it is very hard to eradicate. A democratic government does not have the stomach to use heavy-handed methods to seriously curb corruption dating back to the British rule.

" Is corruption, treachery and bribery as widespread there as in the USA?"

In some ways it is worse in India and in some ways it is worse in the US. What happens when fraud is made legal, e.g., not expensing Scam Options, via political pressures? In America, financial crooks get to write the laws that impact them.

In 1975, I was most impressed by the fact that middle-class Americans were very honest. I have seen steady corruption of the middle-class by the ruling economic elite to further their own interests. There is no better defense than "Everyone does it!" When everyone is a made a part of crooked scheme, no one is a crook! Scam Lovers defend the Scam Options because they have been co-opted.

Justice system in India is in shambles. Even Americans can't seem to afford their much-touted Legal System. For example, in 2000 there was only an SEC staff of three in San Francisco for 10,000 Corporate Crooks in the area. How many know rapists were released early because we didn't have space for new criminals in jails? If Americans can't fully afford their justice system what chance does Indians have?

I feel sorry for both Americans and Indians for having so many Crooks controling their economy.

Jas

-- posted by Jas_Jain

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