India Stock Markets: Even Vultures In Peril

There are massive redemptions of India funds underway; of course, it is not restricted to just India.  In case China is exciting your interest, beware. The foolish bankers are funneling stimulus money to markets instead of lending…there will be a thud.

Finally, Obama mania is increasingly restricted to the gushing teeny boppers; the grown ups are bailing out, some with the bailout money.  Eastern Europe is threatening the well-being of Western Europe. Asia is melting fast and I hear talk that the man-made Island in Dubai is sinking.

In India, the Congress-led UPA government has taken the fiscally conservative economic policies of the NDA and destroyed the budget. This was also obvious when they started the give away program to unproductive segments. A foreign exchange reserve which by now should have been north of $600 billion is at $250billion. No amount of scorn heaped on these set of clowns is enough.  After a GDP growth of about 8+% for four years, the fiscal deficit is near 8% - that is incompetence beyond belief.

With elections coming in India we have the following:

• A compromised Election Commission
• Massive give-away for electoral gains
• A complete and total break-down of the internal and border security apparatus…now being propped up by US and UK
• An ignorant polity driven to personality rather than welfare

I expect the polity in India to vote for the same government again, and it will be deserved. The ignorant polity in India deserves five more years of the same misery that has been their lot with the Congress-led administration.

Foreign investors are not quite so ignorant; fool me once motto will be in play. Expect foreign capital to vote with its feet and flee our shores. Congress took power in 1947 and in 50+ years bankrupted the country. This forced reforms which were BJP policies, and now Congress is back to its old ways. It will take them another 50 years to understand the folly of their policies.

Vulture funds are circling to buy out the fleeing foreign investors at a deep discount. The vultures will get their fill and then will be flayed by the inevitable market breakdown once the clowns are back in power.

Use rallies to exit the equity markets. There is a 10% chance that the sun, moon and stars line up, and 90% chance that the Nifty slides to 2000 and below.

While I would love the sun, moon and stars to line up, I bet on this Indian Congress-led government to get its way and as a result I am short the market.

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