EVERYTHIG IS NOT FAIR IN LOVE & WAR- IT IS IN POLITICS

EVERYTHING IS NOT FAIR IN LOVE AND WAR- IT IS IN POLITICS



There is a very old saying- Everything is fair in love & war. I do not know how really this adage was generated but one thing is clear that it justifies the achievements rather than means to achieve. It is loud and clear that in ultimate analysis the only thing which carries any weight is - your goal is to be achieved. Gone are the days when people used to give more importance to the means rather than the goal and the achievement of goal had no significance if means were not proper.

Today politics is redefining this age old adage and has added new dimensions to it. Today everything is fair in politics-Indian Politics. The new mantra is- Everything is fair in politics. Those who dumped the UPA after enjoying the fruits of power for five years were shameless enough to renounce it before election on some pretext or other, have been equally shameless with no compunction to admit their mistakes remorselessly. A politician never admits or accepts a thing in direct manner but they have been very candid to admit their folly with hope that it would provide them another chance to rape the speechless bride which is known as Indian politics. It does not matter to them that just a week back they were fighting tooth & nail against the UPA and when public rejected them then they were quick to declare their support. It is of no consequence to RJD that their three MP who won election have been voted by public against Congress.

Take the example of SP in UP who had supported congress on the issue of no confidence motion on nuclear deal. Then walked out of ruling partner without withdrawing support and fought election against each other. After the declaration of results now again they are professing loyalty and support to new Govt which is to be sworn in. The supremo of ruling party in UP while sensing good number of seats in election had flown to Delhi thinking that now it is her turn to try her luck for the post of PM. They declared support to Left parties in hope to become their nominee for the prime-ministerial post so as to become the rallying point for the discontented elements. I do not think that Congress would be so naïve to align with them so as to embark on the path of suicide.

It does not matter to these actors of Indian politics and they do not mind to join hands with anybody, to collaborate with anybody, to create a filmy scene at centre , to resort to horse trading for grabbing the power because everything is saleable in the market of politics. Every element has a price and that price has to be paid. One will be surprised to listen the logic given by the leaders to justify their unjustified actions like- Politics is the name of uncertainties, everything is possible in politics, politics is the game of searching similarities among dissimilarities , a stable govt is to be provided to the country, nobody is untouchable in politics, we will not allow fundamental and non secular element to form govt, we are committed to secular govt and so on & so on. The problem is that today’s politicians have to grab the power by hook or crook and their immoral actions can be justified by such evasive talks only.

In this country a stage has come when a politician with 10-15 MPs dreams of becoming PM and expects the parties with hundred odd MPs to support him because he knows well his nuisance value. In the game of politics where 51 out of 100 counts 100 and 49 out of 100 counts 0, he knows very well that he can bargain hard because in the event of non formation of govt his loss of 10-15 MPs would be equal to the loss of 100-150 MPs belonging to larger party or the largest party. This theorem extends equal bargaining power in the power game between to highly unequal players. They assume public to be deaf, dumb and blind who can do nothing. They are themselves state leaders who would question them. Had it been for any body other than Shri Sharad Pawar from NCP he would have already shot on his feet like trio others. He judiciously waited till last and then declared his intentions to support new govt. But any body can understand with equal ease that those who were making noises from his party to make him PM ,were actually doing so at his instance only.

We have one politician known by name of Shri Ajit Singh from Lok dal who was quick to judge the trend of blowing wind and was with NDA in pre election time. The results were hardly declared and he could see the writings on the wall loud & clear. Now he has shown interests in leaving NDA and aligning with Congress to join New Govt. It is not difficult to see that the only consideration is to enjoy the fruits of power in the best possible way. The card of secularism is always available for such eventuality and to justify the action any time, anywhere.

How one can forget Leftists who had enjoyed the proximity to power for considerable durations. Then dumped the UPA on the issue of nuclear deal. Even while supporting the Govt their attitude was apparent- To take credit for every right thing done and to shun away responsibility for a unsuccessful thing. Then every now and then coming in the role of mentor cum big brother and making the going get tougher for the ruling partner so as to point finger at them. All this was being done because one thinks that people are not able to judge the real motives and they do not understand all this drama. See what has happened to them now. A party who was claiming before the election till the declaration of results that no govt can be formed without their support and congress may have to support them rather than seeking their support in formation of govt are not able to muster courage to face the media as bravely as they were doing before.

Whatever are the results of election but it is beyond doubt that the verdict given was not anticipated by any party in their wildest thought including the Congress who are now working overtime to point out the gains of hard work of Rahul. Rahul and the congress ,till the other day were busy in wooing the partners for prospective govt till the results were declared. You see how far Indian polity has traveled. It is the responsibility of political parties to give tickets to persons who are with clean image but all of them across the board had given the tickets to candidates with tarnished image and bad credentials. They had found it hard to discard them , after all in order to win election today you need money and muscle power. But this election appears to have set the agenda for the future elections in this country i.e. field the candidates with clean track record or face the consequences. It appears to me that in the time to come this message would be more loud and clear.

One has to appreciate the right thing done by Rahul. The reason for fighting election as a single party in UP and Bihar may have been taken with the view that Congress in these two states was in such a bad condition that there was nothing to loose further. So it was prudent to give a try to this idea. The concept of bringing youths in the politics who are mostly with clean track record has caught the attention of public. In Bihar it could not dent the ruling party since it is already giving good governance with social security & development activities. The people of Bihar have already enough in the past two decades and were eager to see good governance therefore there was no need for a change but in UP it has made all the difference. Irrespective of the claim of ruling party in UP, the state is in pathetic state ,very badly ridden with caste politics, corruption and abuse of power. There people could see a ray of hope in Rahul who was canvassing the transparent and corruption free politics to be judged based on the yardstick of development activities and not on the basis of caste, creed or religion.

I am of the opinion that Rahul is being groomed for the prospective role by Congress and the party stalwarts have not lost any time to see the silver linings in the achievements though they would have praised Rahul in the same manner ,had there been dismal performance by Congress . So there is nothing new if they are in full praise for him when results are good. We have to be candid with the requirements of Congress that they see something abnormal if leader is not from Gandhi family but to country it does not matter as long as a person with clear thought, sincere motives and clean image is at the helm of the affairs to discharge the business. After all one has to occupy that slot. Therefore it is of no consequences to people if Congress is able to delver under the leadership of Gandhi family. Results are needed to be delivered, that’s all.

Rahul has to be appreciated for his moral courage to point out very clearly the biggest malady with which our polity is suffering and that is caste, community, religion based politics wherein development and good governance with clean track records takes back seat. How many of our seasoned and matured politicians do have moral courage to acknowledge this evil and further how many of them have taken steps to contain this evil. At least Rahul has symbolically demonstrated with proof that youths can be trusted for this responsibility and they can a deliver results too. One may argue that if Rahul has to rise to the top post ,he do needs a team of young turks that’s why all this is being done. There is no denial to the fact that he would need a team of younger generation to force his way through the older generation. But then what is wrong in this. Any body in these circumstances would have done the same thing which Rahul is doing.

There do exists a pitfall for Rahul. The Congress party has always been accused of dynastic rule and promotion. It is true also to some extent. I was seeing the team of young MPs with Rahul and I find that most of them are either the scions of old congress men. Some of them has been taken from NSUI which is again a Congress outfit. There is lack of mass appeals to youths of this country. My suggestion would be to bring also those young persons/youths in the organization and politics who have no Godfather, no person to promote them politically or to push their cause, who is a common youth of a common family and should find a place in the Congress Organizational structure, party, set up. If this happens then a very common youth of this country would identify himself with Rahul, young Congress and this would produce miracle not only for Rahul, Congress but also for country.

We know from history that a Chandra Gupta Maurya in making needs a Chankya, kautilya. The present team of Rahul does not seem to gave one fit for this role. If Rahul takes my advice, though I am no body, it would be better the sooner he gets his Chankya because without kautilya a Chandra Gupta can not be born. Why cann’t Congress devise a screening procedure for the youths of this country on the line of Civil Services competitive exams and selects common youth for the party to be finally selected through their interview at final stage. It may be a good food for thought. I do not see anything wrong in this if it generates confidence in me that irrespective of very common family background of mine ,I have opportunity to rise in politics and fulfill my political aspirations, if found suited for this job. Let politics be a profession in the true sense otherwise at present it is a business in reality.

SLOWDOWN IN INDIAN ECONOMY;MEASURES TO CHECK

SLOWDOWN IN INDIAN ECONOMY; MEASURES TO CHECK




The slowdown in economy is a global phenomena. The reasons causing it may have more similarity across the board but the remedy has to be different and distinct to each country’s economy due its own peculiarity. Therefore this article would be restricted to the measures needed to check slowdown in Indian economy. I am not an economist but do have grasp of basics of economics. It is open to the economists of the country to go into details of knitty-gritty of this problem but one thing is clear in my mind that this issue should be understood by a common educated Indian citizen.


Before we proceed further it is worthwhile to know few peculiarities of Indian economy. The GDP of India is 85% dependent on domestic production and 15% on export. The share of service sector has been increasing for the last two decades while the share of industry & agriculture sector in GDP has been decreasing. At present the service sector accounts for 50% of GDP while industry & agriculture sector accounts for 25% of GDP each. The growth in service sector has been very fast as compared to growth in agriculture sector though the 58% of population is still agriculture based society. Further, the BPO( business process outsourcing) sector growth has been more than 50% on year to year basis which is highly imbalance as compared to growth in other sectors with in the service sector.


The inflation had risen to the range of 11-12% till the second quarter of 2008 then it has cooled down to below 1% and even to Pt 18% by the mid of Apr 2009. It has been clearly the sign of over heated Indian economy. The Indian rupee was valued as low as Rs 39 per USD before rising to Rs 51 per USD. When the USD was at its low that time US did not restrict the outsourcing in the service sector but the moment it has become strong the laws are enacted to discourage the outsourcing in the service sector, particularly IT industry. All these indicators points toward a over heated & over rated Indian economy heading towards slowdown.


The targeted growth rate of GDP in 2010-11 was 10% but it was as low as 4.8% in Sep 08. The Central Bank in India now expects it to be around 6.0% in 2009-10 due to global cues. The strain of slow down in global economies on Indian economy has been very evident and the earliest indicator was reflected in the sharp downfall of sensex. Thereafter there were signs of less demands in automobiles & industry sector, shortfall in jobs requirements, job cuts in IT and BPO sector, delay of payments in international markets from developed economies & US particularly in IT sector, Liquidity crunch in Indian market etc. Though it is a fact that GDP of India is largely dependent on domestic markets but it would be incorrect to assume that liquidity crunch in the international market will not affect Indian economy adversely at home.


The unorganized sector in India is facing acute unemployment problems due to drastic reduction of demand in international market like diamond cutting, jewellery and leather industry etc. Even the organized sector like automobile, petrochemicals, steels, cements, airlines and hospitality have faced acute job shortages and there has been sharp cuts in the work force in these sectors. As an estimation , the organized sector has lesser jobs by 30% as compared to the demands during the corresponding period of last year. The share market all over the world has been a bloodied field with the shaken confidence of investors. The Indian share market has been a lucrative destination for gain by the Foreign Institutional Investors due to prevailing less lending interest rates in the developed countries till the recent collapse. The sudden sale of shares by FII en- block in very short span of time had led to huge loss of money by a common investor and the Indian share market had come to the floor. This indicates that more effective checks are required to be enforced by SEBI on the FII and Foreign Direct Investments(FDI).


The diagnostic symptoms of slowed down economy would also lead to the measures to be adopted for cure . This problem is needed to be addressed on two fronts. One is to stimulate demands in the Indian market through government investments which is like giving oxygen to the patient. The other is to increase liquidity in the Indian market which will increase the demands for production, increase in requirements of work force and reduction in job cuts which can be accelerated with the cuts in duty and taxes. It is needless to say that none of these two measures would be effective in isolation to sustain the Indian economy and therefore the combination of these two types of measures in concurrent manner intermittently would be needed to revamp the Indian economy.


In order to stimulate the demand in Indian market, RBI had included 20000 crore rupees in Dec 08 and had further raised rupees 3 lakh crore liquidity in the market through cuts in rates. The banks & non-banking financial companies were made available 75000 crore and state govts were allowed additional market borrowing of rupees 30000 crore. To address the liquidity crunch in the Indian economy RBI had announced the cuts in the Repo rates and Reverse Repo rates and brought it down to 3.25% & 4.75% respectively. The cash reserve ratio (CRR) was also brought down to 5% and interest rates on borrowings were reduced which was made possible due to the less rate of inflation.


These measures would definitely increase the fiscal deficit as compared to the planned targets but all these steps are undoubtly the right one taken at the right time. Though after the formation of new govt at centre we may find all types of hue & cry in Indian news media if the present govt is replaced by other political parties but these steps were utmost essential to sustain the Indian economy onslaught inflicted by global slow down .Keeping in view the decline in investments through FII , govt has rightly allowed 100% FDI on the automatic route though this measure will have its own constraint for being effective due to liquidity problems with banks in other developed countries.



I am of the opinion that SEBI should constitute one more system of checks & balances where the trading price of a share is regulated based on their book value as well as earnings per share in the previous quarter and the trading prices should not be allowed to go beyond a predetermined P/E ratio. This P/E ratio should be calculated sector-wise with regards to prevailing P/E ratios in other derivative markets. The witnessed loss of money in Indian share market is catastrophic considering the fact that in India 27 % of population still lives below poverty line and the indicator for being above poverty line is only earning of Rs 10 per day per person or Rs 3650 per year for a person.



The 70 % of US economy depends on the consumer spending and US itself accounts for 25 % of GDP of world. That’s why the boost in consumer spending in US which is possible only after restoration of consumer’s confidence will not only effectively check the slow down in US economy by generation of demands interalia production interalia job requirements but would also play a important role in bringing the other country’s economy on path of growth like the much needed oxygen. It would be the responsibility of the concerned govts to pump in govt investments in the market to create liquidity & demand in the market till the market becomes self sustainable. Similarly it is equally important for the second and third world countries like India, China, Mexico etc to pump in stimulants in the market so that their economy does not bleed to death by the time much needed oxygen is supplied by US economy on its recovery from the economic slowdown.

EXPEDIENCY IS THE WORD OF THE DAY

EXPEDIENCY IS THE WORD OF THE DAY


The urbanization is taking its toll in our day- to-day life. No one has time to pause and think. The general & popular mantra is to see behind and move forward, so no scope for innovation or concern or personal touch. Nowadays the personal touch is also accorded in the business like manner and promptly signified through packaging for utmost mileage otherwise it looses its relevance because the memory of people is too short. In some sense the short memory is good also otherwise life of a person will become so tense that he would not be able to pull along the life.

You must have noticed the scene in a park or ground where a politician or a dignitary is scheduled for a lecture or visit. Before the D- day, the screening of area is done, survey is carried out by security personnel, the area is sealed and various works for protection is carried out. Then snuffer dog squad sanitize the area prior to the visit and finally the visit takes place. What happens after the visit? The area bears the deserted look as if no one cares for it. It does not matter to anybody that some miscreants may take a round of the area , may carry out even photographic survey and can wait for a easy prey next time who would in no way be less important then the previous one. But who cares?

Take another example. The foundation stone for a new building is to be laid out by a renowned person so before this not only the ground is purified by sprinkling sacred water but the place as well as all the implements are also offered worship by priest prior to use. What happens afterwards? Let me tell you, If the area is not isolated by the barbed wire or fencing you would not find even the inaugural stone and the very next morning you would find people and animals attending to the nature’s call over it.


I happened to attend a mahayagya by the side of Ganges in Allahabad sometimes back which was to be conducted by the one hermit of repute. I would not take his name. During the puja and hawan , all the God & Godess were summoned to that hawan- kund and were given offerings by way of Ahuti. After conclusion of the puja, all God & godess were requested to go back to their respective Places ,in Hindi it is called loks. After that there was a feast which was attended by thousands of people and prasad was taken by everybody. Then every body dispersed after touching the ground by forehead at hawan-kund. Now the hawan-kund was open to its real claimants and there was no body else. The dogs had the feast after their masters, after all the loyalty of a dog is undisputed and at many times it has been found to be more than that of the human beings. Next morning the same drama starts again. The remaining Ahuti and the ashes were taken out of kund in the most sanctimonious way and then taken to the river Ganga for immersion. You must have noted that without dumping the dirt in river Ganga no purification takes place. And we do this with utmost religiosity. I do not know that how long we will keep on generating dirt in the society and the sacred river would keep on cleansing our dirt as it has been doing since time immemorial.

Why I am taking examples of religious activity ? It is because this is the activity which we do with utmost sanctity, devotion and care. At other places the situation is bad to worse. Recently I was attending the inauguration of a fate by a dignitary. As usual, no new work commences without the worship of Ganesh ji- God known to dispel negative influence and bad omen. The priest was aware of the requirements but was oblivious to the availability of a statue of Ganesh ji. We all know that necessity is the mother of invention, so it took place. A burning lamp, in Hindi it is called diya, was ignited and kept on the ground assuming it to be incarnation of Ganesh ji. Everybody was very religious at that point of time with folded hands and closed eyes concentrating on Ganesh ji in the form of diya. After that a rock was put on the ground duly sanctified which was worshipped and finally a coconut was broken over it.

Now guess what happened subsequently. Everybody present there had actually very short memory, so every body forgot that the burning lamp is still lying on the ground along with the sanctified rock and the broken coconut to which they were worshiping just now. People were going crossing it, over it, with every body attentive towards the VIP and the God, who was summoned to propitiate the ceremony seconds before ,was still lying on the ground. After some time I turned back and found a lady sitting on the ground, struggling to lift that lamp below the feet of people with the intention to shift it at a separate ,proper place. The lamp was hot and it was little bit difficult to shift it. That stupid priest was standing like a dumb as if remembering something , lost in thought to figure out as to how that lamp has been there.

If in a crowd of 200-250 people , you find it hard to find a person who is sensitive to this very evident requirements & facts then you can very well imagine that in which type of mindset we people are living. That’s why in this country it is very easy to find a good temple built by a wealthy businessman but it is equally difficult to find it properly maintained subsequently. It is altogether different matter that a very pompous ceremony takes place for installation of deity and more grand ceremony is organized for its inauguration by a VIP or minister or industrialist who puts a plaque proudly stating- this temple has been constructed by so & so….. OR this temple is inaugurated by so & so…

In this country of millions, God also needs donation by a mortal being created by himself for his residence and needs a introduction too like issue of identity card in the form of a plaque proudly affixed on the gate of temple at a prominent place. Thanks to the Department of Registrar of Birth & Death who does not come to God asking for his birth registration certificate and the affidavit needed for registration when He is born……. Good

RECESSION IN WORLD ECONOMY- AN INDICATOR TO TAKE LESSONS

RECESSION IN WORLD ECONOMY- AN INDICATOR TO TAKE LESSONS


Nowadays a lot of hue & cry is there about the slow down in economy in various countries. To be frank, I have not understood all this. The slow down in economy is primarily of two types- one is known as depression and another is known as recession. The depression do have a longer time effect as compared to recession for its continuance as well as recovery. The depression has to do with the problems in economy with in infrastructural domain while recession is concerned with market driven economy linked with share market. The share market experts treat recession as a healthy sign for a phase of one to two year after a bullish phase of three to five years. Then the natural question is – If it is so then why so much hue & cry for a normal phenomena which is bound to happen?

To understand this, you may have to first know the forces in play in today’s world which drive a economy. The world economy today is not in that phase which it used to be two or three decades ago. To understand this, take a few examples. The Ford motors used to manufacture cars right from the stage of manufacturing steels to every components of car to their assembling till marketing. Now the Maruti Suzuki gives franchise to various concerns for manufacturing small parts, establishes ancillary units for certain components and remains limited to assembly lines and marketing network. The Boeing company though retains the proprietary rights but a Boeing airliner is assembled from major inputs from partners in seven countries.

Take another example of Nike shoes which is produced by assembling components from independent suppliers from nine countries under Nikes coordination in Asian factories. Nike is “merely” a designer, a coordinator of a global supply chain encompassing 800,000 workers worldwide. Now the pre-requisites is to possess the core competence with proprietary rights and having partners occupying other parts of value chain. Therefore today Nike specialises in designing & marketing only and resorts to outsourcing the production of shoes to other partners.

Dossany & Kenney after concluding their study of US economy while studying the recession in the economy have opined that US needs to move up the workers in its chain the economic ladder to make them to work on creative tasks like design & marketing. Today the industry functions on the fundamentals of co-operations and networking. The outsourcing does not remain limited to a particular areana in a chain of productuion line but it brings along with it the complete gamut of complicacy linking to various subchains , minor production lines, marketing and designing network which are linked to each other like a web.

The outsourcing has resulted into jobs going to foreign countries as assessed for the US economy and the blue collars jobs are being replaced by the jobs demanding specialized skills like designing etc. Today most of the international giant corporations do have their design hub in developed countries or US but the manufacturing is carried out in countries like China , Mexico, Bangladesh etc due to availability of cheap human skilled or semi-skilled labour needed for the job. The internet has played a very significant role in this scenario where a designer is available online to do a similar job at the tenth of the cost with same efficiency and is able to send the designs very quickly online. The leading economies while formulating the blue print of diversification & decentralization of production line had decided to retain the designing and marketing expertise had failed to appreciate the potential of internet web which may crash their economy by snatching the specialized white collar jobs and paralyzing their economy.

Today the fear psychosis is playing in the mind of developed countries to loose the future jobs of designing and the core competence to the internet generated market if it is not checked in time for the reason that the production line has already been outsourced to developing & under developed countries. It would not help them even if they restore back the production line to the developed countries since it would not be commercially viable due to reduced cost of production on account of cheap labour available in second or third world countries to do the manual jobs. Though the immigration policy of developed countries have been able so far in keeping job seekers from developing world out of developed world but how would they check the invasion of internet snatching their white collar jobs.

The above deliberation highlights few salient features of modern day economy-

a) The economy of various countries are linked to each other inseparably today and are susceptible to the inter transfer of good or bad happenings from one economy to another.

b) The outsourcing has increased the role of developing & under developed economies in today’s world.

c) The developed countries are going through a fear psychosis that their specialized and white collar jobs would be lost to the third world countries. These sentiments are high in the share markets and uncertainty prevails in the mind of investors.

Now the need is to understand the role of share market in the world economy. Today every company raises money through public participation by issue of shares . It is needless to say that the public sentiments do affect the share market. The rise or fall of price of a share is primarily governed by the demand and supply equation of share purchase or sale which is linked to prevailing sentiments in the market. The role of media is also important because they have the capability to spread the news which subsequently shapes the public opinion. The cost of shares in the market governs the market capital of a company. Though there are yardsticks to assess the book value of a share but P/E component ( price of share to earning per share) is totally dependent on the demand and supply of shares rather than the demand & supply of goods being manufactured by the company. That’s why we see that a particular share trades at 10 or 15 times of its valuation regardless of the actual profit. The cost of the production has very little role in determining the trading price of a share which ultimately governs the overall valuation of share market in a given country.

Hence it is clear that performance of a company is always based on the performance of shares in the market though it is not the actual representative of the assets of company. The growth of economy as reckoned in public sentiments today is more based on the market driven factors rather than the other financial yardsticks. When the market was in the bullish phase and market sentiments were high on positive notes then no one had bothered that the production , demand of products has not been raised as many times as the valuation of company and cost of shares has arisen. Then the GDP of country was also rising with ever high growth rate in economy. But when the market has entered in bearish phase and the market sentiments are negative , the share prices have crashed in all the countries so do the various countries economies then every body appears to make noises about it. Does this downfall in economy real? I can answer in short that the downfall is as much real as the rise was.

No one would dispute that the market sentiments do affect the production of industries because if market sentiments are hurt then the demand of product decreases. But does the demand really decrease in the same proportion the share has reduced in its valuation? The answer is no, never. We have to understand that the demand in shares depends upon the number of times a share is sold & purchased which means that if somebody rotates this cycle ten times then it would be counted as demand of ten units in share market while in reality the demand of product in market would be that much unit which is actually sold after manufacture. This applies to service sector also like IT industry, Consultancy etc but to the limited extent because here the human skills is concerned and no materialistic evaluation can be carried out as in the case of FMCG, OIL& GAS sector etc. It is clear that in share market the virtual demand is generated which results into hyped share prices and therefore any valuation of worth of a company or soundness of economy based on share market prices is bound to generate a virtual money, virtual assets as well as virtual growth which is bound to be different from the real growth, factors. This virtual money is like a bubble which has volume but not the weight so it is bound to be deflated.

The role of traders, lending rate prevalent in a country, interest rates payable on loan and bank deposits, role of FII, role of international mutual & hedge funds do also contribute to drive the prices of shares in market which has very little to do with the valuation based on the actual demand/supply of product and cost of production. The component of black money in circulation in a given country and avenues available for its investments do also have a role to play in the valuation of trading prices of shares. But all these factors do not contribute towards actual growth of economy. It is also now being realized that though the outsourcing of blue collar jobs by developed countries to third world countries reduces the cost of manufacturing, raises the profit component per share but it does not creates jobs. This a important factor to indicate that in today’s world economy the employment is not generated though the cost and valuation of economy keeps on rising to the great extent, if market is in bullish phase.

The testimony to this virtual phenomena is that the second & third world economies are least affected by the present meltdown and the economies of the first world are worst affected. Whosoever had gained more has lost more too in the downward trend of market. The market valuation of worth in trading of shares in every country has been down from half to one fifth of the peak valuation. It means that money has been lost in every country and in total in this world. Then the first concern is that where from that much money was generated when market was at peak and then afterwards where has it gone when market is plummeted. Does it mean that value or amount of money lost in capital has been taken away by some ALIENS out of this world? Definitely not. Then what is the fun all about this?

I can conclude that money has gone to the same place where from it had come earlier which means it was virtual money with virtual gain and the loss is also virtual. But such phenomena do affect adversely the world economy because a common investor when calculates his prices of shares from the peak valuation ,he thinks that the difference in valuation has been his loss interalia this phenomena shakes the confidence of a common investor and the markets goes into the bearish phase due to the negative sentiments and loss of confidence in the market/economy. The U S market controls approximately 25 percent of world GDP therefore any rise or fall in US economy do affect other countries. In today’s world of media & internet connectivity vis- a -vis dependence of various countries on US economy due to outsourcing, it is seen that any negative sentiments in public in US do influence other economies with cascading effects. Therefore the rise and fall are very steep and linked to US economy. Presently the US economy is passing through very bad phase of recession generated due to its policies of outsourcing to third world countries , investment in the law and order situation of other countries, diplomatic investments in certain countries and failure to sustain the desired economic growth in their own country. Their inability to fight the increasing unemployment accentuated due to loss of white collar jobs of specialized skills and inability to retain effectively the core competence of the value chain being lost to the other country due to internet invasion has further worsened the public sentiments in US.

The restoration of US economy and the positive sentiments of US people would again pull their economy out of recession and may indirectly contribute towards the positive sentiments of people of other countries in the market. This may again result into the cascading effect of generating confidence in investors rescuing the world market and putting it again on bullish phase and growth. Then slowly the loss of money in the world economies will start recovering and probably higher peak then the previous one would be achieved by the market but this is the time to take lessons, take remedial measures and be aware of the pitfalls of share market driven world economy. Untill this happens, world economies and world market would remain in the melted down state with valuation of market and shares in the devalued form.