STAFF NEWS & ANALYSIS
Jim Rogers Swaps Out of India?
By Daily Bell Staff - November 03, 2015

India Banks Are Finally Looking Better, And So Is Their Economy … Moody's raised national banks credit outlooks to stable from negative. Non­performing loans on the books of Indian banks are showing signs of improvement, and so is the nation's economy. Despite some much publicized disses of the Indian investment story, mainly from emerging market commodity guru Jim Rogers, India is still the strongest of the BRICs. Moody's … cautioned that any recovery in asset quality would be gradual given the high debt levels in Indian companies. – Forbes

Dominant Social Theme: Time for the big Indian comeback.

Free-Market Analysis: We don't mean to pick on Forbes – this is a well-written and well-reasoned article – but we generally have trouble getting excited about India from a business and investment standpoint. Certainly the country has come a long way but it still has troubles given its massive bureaucracy, repressive caste system and seemingly intractable poverty.

The longer view, then, is a somewhat depressing one. But the Forbes article we've excerpted takes a shorter and more cheerful perspective. Moody's upgrade may signal a flood of new investment into India and finally fulfill the promise of Narendra Modi's Prime Ministership. Modi's claim to fame is the way he built up his home state of Gujarat by wooing multinational investments and generally making it known India was open for business.

To its credit, the Forbes article is not relentlessly optimistic. The author points out that India's banks are carrying perhaps $50 billion in non-performing loans. But Moody's believes that India is now in a position to outperform China regarding GDP in percentage terms. More from Forbes:

Here's how infrastructure – a favorite India investment theme – has played out. Growth in 8 core infrastructure sectors rose 3.2% in September, a four month high that mostly stemmed from electricity and agribusiness. The 8 core industries are coal, crude oil, natural gas, refinery products, fertilizers, steel, cement and electricity, comprising nearly 38% of India's total industrial production. Combined, they grew by 2.6% last year.

The article – as we can see from the initial excerpt – does try to defend India from recent criticism received from a famous investor, Jim Rogers, whom we have interviewed numerous times.

Jim Rogers, Forbes writes, "dissed" India in the past few months. We did some searching and found the article in question, written in early September and entitled "Jim Rogers exits India, says one can't invest just on hope" posted at LiveMint.com. Here's an excerpt:

Jim Rogers exits India, says one can't invest just on hope Rogers said he has sold all his India shares as he saw nothing new coming from Prime Minister Narendra Modi. He said he may return to India at some stage if Narendra Modi starts doing things, or if the markets go down a lot.

"I am sure Modi is a smart guy, he enjoys good press, and he makes a lot of friends for India. But I, as an investor, after almost a year-and-a-half, have decided to move on to other places, partly also because stock markets are not going to be particularly good for the next year or two," Rogers said in an interview.

You can't just invest on hope. Even If reforms started coming, it may not be enough to make the markets go higher, because markets have already factored it in. If the reforms are substantial, the markets may go higher. No indication of that.

Rogers cites additional issues that may be holding India back including taxes and regulations. The election of Modi held out hope that changes would begin to come to India sooner rather than later, but – in selling his Indian positions – Rogers showed he wasn't willing to wait any longer.

In an interview with Jay Taylor at the end of last year, Rogers talked about investing in Russia (something, in fact, he had mentioned even prior to that). He said that after more than four decades of avoiding Russia, he recently had begun to change his mind. In the interview, he said Russia seemed to be offering a more business friendly environment.

Is it possible that Rogers might replace his Indian portfolio with a Russian one? We couldn't find anything very recent about Rogers's Russian investments but in his Taylor interview he sounded emphatic about the possibilities and mentioned the Ukraine conflict as well.

Referring to the Ukraine conflict, he pointed out it had significantly damaged the value of the ruble and that "when things are collapsing, you should be looking that way, not running away." Rogers said he'd begun making some exploratory purchases, most prominently an investment in a fertilizer company. He even said he might take a larger position – though perhaps Russia's recent adventures in Syria have discouraged him.

Nonetheless, this is in keeping with another one of Rogers's investment preferences, which is farmland. Rogers has long been on the record as stating his interest in gaining more farmland exposure and perhaps an investment in a fertilizer company is one way to do it.

It's Rogers's position that as prosperity increases around the world, some three billion additional consumers will expand demand for various kinds of agricultural products and spinoffs. He sees this sector as a promising one because it is has little to do directly with the financial industry and is instead being driven by real demand.

After Thoughts

Here at The Daily Bell, we share Rogers's interest in farmland and the world's ever-expanding demand for food. We'll continue to report on this promising sector and will provide ongoing coverage via our newswire. You can subscribe below. It's free.

Posted in STAFF NEWS & ANALYSIS
  • Impending Sky

    Modi has promoted himself as a reformer who will jump start India. What I see and hear coming out of India is mostly identity politics. People can not afford lentils, while Modi’s base is lynching people for eating beef. The country is a mess. Fingers are being pointed, scapegoats are waiting in the wings. There were some headlines this week about Modi vs. Moody’s with the ratings firm apparently chiding him for not reigning in extremism.

    His platform as an expert manager of economies is disturbing to say the least when viewed through the lens of his ideological background. The historical parallels are too compelling to dismiss criticism as an invocation of Godwin’s law. At a certain point reasonable people can responsibly ask questions. To ignore it would be irresponsible.

    His rule has bolstered the extremist Hindutva elements. Unanswered questions remain about his role in the Gujarat massacre. He talks a big game about development, but the violent fringes seem to follow him everywhere. When he does take actions towards ‘development’ it is always in the context of a state managed solution. There was plenty of talk about money India would invest in hydropower when he came up to Kathmandu, but the reality I saw was the Hindu supremacist element out in force with demonstrations. A month ago they were bombing churches. In the week prior to that they pulled an injured man out of a red cross ambulance and killed him.

    Here is an interesting and thorough write up on Modi and the heritage of his political movement:

    http://www.loonwatch.com/2014/04/narendra-modi-and-the-rise-of-indias-neo-fascist-far-right-the-facts/

    “note 2: “Nationalism”, particularly the RSS’ definition of the concept, is of course a foreign import from 19th and 20th Century Europe; the RSS’s Nazi-inspired salutes, uniforms, ideological aspects etc are of course also foreign imports. Readers will note the irony.”

    Of course there is some bias there, but more than enough valid criticism. It can not all be dismissed away. The man is a demagogue who plays at having reformed himself. Meanwhile his arm-banded youth corps is out lynching people for eating beef. It is a classic slight of hand trick. In one hand Modi plays innocent while his henchmen commit atrocities, in the next he has his ministers issue dismissive proclamations.

    “This (incident) should be considered as an accident”, said Mahesh Sharma, a BJP party member in regards to the lynching

    What can we say about someone who espouses central planning of the economy, incites hatred, promotes supremacist identity politics culminating in violence, washes his hands of responsibility through proxies, utilizes a youth corps with special salutes, and promotes himself as the nation’s economic savior?

    The parallels are just too strikingly obvious. If it looks like a duck, swims like a duck, and quacks like a duck, then it might just be a toothbrush mustache.

    • Thanks for the insights.

      • Impending Sky

        Thank you for the forum and all of the content!

  • “Down with the English anyhow. That’s certain. Clear out, you fellows, double quick, I say. We may hate one another, but we hate you most. If I don’t make you go, Ahmed will, Karim will, if it’s fifty five-hundred years we shall get rid of you, yes, we shall drive every blasted Englishman into the sea, and then” – he rode against him furiously – “and then,” he concluded, half kissing him, “you and I shall be friends.”

    “Why can’t we be friends now?” said the other, holding him affectionately. “It’s what I want. It’s what you want.”

    But the horses didn’t want it – they swerved apart; the earth didn’t want it, sending up rocks through which riders must pass single file; the temples, the tank, the jail, the palace, the birds, the carrion, the Guest House, that came into view as they issued from the gap and saw Mau beneath: they didn’t want it, they said in their hundred voices, “No, not yet,” and the sky said, “No, not there.”

    from E.M Forter’s A Passage to India

    India and Britain shall yet again and soon be best of friends. America does not understand this – such nuances are lost on them. The British respect and value India and the Indians, are in awe of their depth, their charm, their qualities, their histories, are even a little jealous of India for all her beauties. And strangely the Indians feel much of the same way about Britain and the British too. It is a big old love in and that is, first and foremost, what will make India and Britain enduring partners. This is something that cannot be replicated or even synthetically understood.

    • Praetor

      You be right. They call it Hindu Kush, if cannabis is legal worldwide, the Brit’s may need to find cultivators, and who knows more about the herb than the Hindus, a 100’s of billion Pound industry can not be ignored, and who has the best connections, Britain!!!

      • It is the converse between the British and China. It is also all grand and historic too but between us Brits and the Chinese there is no love, no love to lose. That is why Americans pile in and go for it big in China, both of their ways require no love, no respect, no value. Just look the guy in the eye and do a deal. The ethic is: watch out for the other because he has none.

        • Impending Sky

          The Hindu Kush range is named such because of the history of slave trade through the region. The Hindu slaves were crushed by the harsh terrain and conditions of transit.

          https://en.wiktionary.org/wiki/Hindu_Kush#English

          As it concerns Britain, many in S. Asia are still playing the blame game in regards to the colonial period. Of course Johnny Walker is popular and there are several other Indian brands dubiously labeled as ‘scotch’. The premier league is in the news paper, after cricket.

          There is love and there is hate. One wonders if some feel that India would have been better off under Islamic slave driving masters the way history is misconstrued. There is no shortcoming in S. Asia today which has not been blamed on the British.

          Of course there is plenty of collective guilt spread around in the west as well. Sadly this ignores much of the positive influence the British had in the region. Obviously it was not all cake and candy, but nothing can be as bad as what is presented.

          After sixty years someone has to take responsibility somewhere. Ideally this would be the individual responsible for his own life, but I digress.

          George MacDonald Fraser put much of the collective guilt mythology to bed with his historical amoralist “Flashman” series. His description of the conditions in India during the colonial period were highly educational for me. In particular the parts about suttee, the atrocities of the mutiny, and the abuses of the existing ruling classes make British colonialism look saintly in comparison.

          Even this year, politicians in India and the UK were arguing that the Kooh-i-noor diamond should have been returned to Modi on his visit.

          • This is apparently so but in reality I wonder how much of this sort of attitude, recriminations over histories past, are only from those attempting to score some easy points by arguing matters of, so called, ‘political correctness’. On one hand truth is truth, so, for example, the US portraying the western fronter as a time of only adventure and heroism is to ignore the genocide of the North American native population. On the other hand, the people today living in Germany are not responsible for the genocides perpetrated by the National Socialists during WWII. History in the incorrect perspective is first a tool of manipulation.

            What the people of today are most responsible for is the contemporary actions of ‘the state’ carried-out supposedly in their ‘name’ of and by way of ‘representing democratically’ the will of today’s national populations. Clearly it is very difficult for the population to act to moderate the actions of ‘the state’ if only because only those with at least something above average intelligence will be able to workout the truth of matters, (the truths aside from all the prevailing rhetoric and propaganda). Therefore those who do work to understand will be, by default, already only a part of a minority.

            What we can learn from this is: the faults of ‘the state’ in histories’ past can no more be blamed on that state’s population, at that time, than can future generations be accountable for the past. This conundrum, however, does suit ‘the state’ because, with this, the past actions of ‘the state’ are portrayed more in terms of collective national guilt and little blame apportioned just on ‘the state’ being out of the control of (and manipulative of) their historic public.

            Less so is there ‘national guilt’ piled upon the British public for involvement in the opium trade into China, less than 200 years past, than there is guilt pointed at the British people for Imperialism in India and the Empire in general. Is this because: it is easy to see the opium trade was entirely the fault of the British Government along with the merchants acting under Royal Charter (and generally not understood or meaningfully controllable by the ‘British people’ of the day)?

            The same would also apply to the genocide of native North Americans – it was a deliberate act of ‘ethnic cleansing’ that was rooted in ‘the state’ or more-so those in control of ‘the state’.

            This facet of ‘the state’ is an incurable syndrome of ‘the state’ and will only be brought to an end when the people understand that ‘the state’ is only a mechanism of exploitation, control and enslavement, of them, the population. Any apparent utility of ‘the state’ is simply illusion enacted so as to facilitate ‘the state’s perpetuation.

          • Impending Sky

            ” On one hand truth is truth, so, for example, the US portraying the
            western fronter as a time of only adventure and heroism is to ignore the
            genocide of the North American native population.”

            Again, the situation is much more complex than what we can describe here. Yes, there have been horrible abuses. But violence was also perpetrated by some of the tribes. George MacDonald Fraser illustrates some of those complex scenarios where the common PC historical narrative simply falls flat. The series is highly entertaining overall, because he discards moralization. He simply shows how people were doing what they would, going through the motions of life. The protagonist is especially amoral, which makes the whole affair readable.

            Where you gun down the tired and trite formula of the old west, sure – OK, I agree. But it does not follow that the inverse is automatically true because the first narrative amounts to tiresome moralization.

            To go deeper into the subject I think we might expose the absurd nature of the fallible human condition confronted with the prospect of absolute morality. That is to say that neither ‘side’ will ever be entirely in the right 100% of the time. For me this is where most fiction or even nonfictional narratives fail me. I have a hard time suspending my disbelief for a morality play, no matter how nuanced the premise.

            The Flashman series covers all of the historical scenarios you listed. Much of what he describes speaks to how misplaced the notion of collective guilt is and how the historical narrative has been manipulated in pursuit of it.

            In my view the notion of collective guilt and projections of guilt are something of a vanity. Individuals under the spell of collective guilt have a way of projecting their superiority over those they view as their victims.

            The opium trade is a good example of this. No one was forced to consume opium. Addicts made a willful choice to use the substance to excess. Collective guilt and what I call ‘feel good guilt’ and ‘feel good guilt shaming’ effectively denies the agency of the assumed victims. Oftentimes this will be accompanied by assumptions of preference.

            ‘Feel good guilt shaming’ is more of a modern phenomenon, where the negative aspects of arrogant guilt are projected onto the ideological enemy. This might be illustrated by a progressive person denying the individual agency of a minority in what they view as a poor social position. Perhaps he is willfully drunk somewhere in the city and nothing would suit him better than to loiter with a bottle. The hypothetical progressive might take it upon himself to blame the ‘exploitative’ and therefore ‘racist’ owner of the nearby liquor store. Again the tired left-right dichotomy is plumbed. Perhaps they might rationalize prohibitions on alcohol along these lines.

            Now I have gone nearly completely off the topic.

            Again you move to condemn the state for perceived evils and I will not deny that the state and state power by necessity results in negative outcomes. However I think there is something to be said for the distinction Nabokov made in the forward of ‘Bend Sinister’ between his effort and that of Orwell. He claimed that Orwell condemned the evils of the state where he (Nabokov) simply wished to illustrate the idiocy of the state.

            The distinction may seem minor because regardless of either feature the results are much the same. However, for me the notion of the maliciously evil state seems increasingly irrelevant. Of course I have complete disdain for authorities, the state, etc. But eliminating the state will not eliminate idiocy or violence. It will only reduce the scale and homogeneity of violence. Idiocy will remain as strong as ever. It is inescapable.

            By condemning the state in this way, we engage in the same sort of futile morality play. No, I do not want a state nor do I wish to defend one. But this is not because the state is evil. I know that many of my actions have been, probably will be, or could be construed as evil. I would have gladly sold opium to the Chinese in the Victorian era, provided I thought I could get away with it and better means were not at my disposal.

            For me this is the problem with the historical evils. People make much of posturing, but when it comes right down to it many of those same people, if not those who are the loudest in their condemnations, would be the exact same individuals engaging in those acts. Then there is the absurdity of morality as I have tried to explain above.

            Perhaps a good example might be your comparison of the state to a religion. Could we not compare this to the evangelical’s characterization of alternative religions as tools of the devil? Both sides have their respective dogmas. For me the world is more complex than these black and white features.

            There is much we will agree upon especially our disdain for the state and authority, but the methods by which we arrive at these conclusions seem contrary. Always a pleasure to discuss.

          • The trouble with giving examples is the examples take over the debate and the point can drop into the background somewhat! Clearly the American Natives were at times exceptionally cruel to their victims, apparently unnecessary though not incomprehensibility. Clearly what people buy and sell should be between themselves and what people choose to consume is for them alone to decide. My point is not so much about these events in history but that ‘the state’ distances itself from its employment of these human situations, causing, encouraging and prospering from them only to subsequently allow the people of the time to take the blame. The converse is true. If there was no ‘state’ these situations would not have occurred in the manner in which they did. It is the ‘class’ that benefits from ‘the state’, that encourages and employs ‘the state’, who set carefully out the conditions for such tragedies to unfold, stands back to let events take their plotted path and then see to it history portray those events as being all due to the vileness and weakness of men (and not the men that incanted the circumstances to occur).

            ‘The state’ may be idiotic, indeed: how could it be anything else, it has no brain! Why I always place the phrase: ‘the state’ into quote marks is because ‘the state’ is not real, it is just an idea, a concept. What is real is all the people who’s actions are as though ‘the state’ is real. (For example: the man, who is a cop and who is pointing a gun at you is what is real, his reasoning for his legitimisation of his actions is predominantly imaginary).

            As for ‘the state’ being ‘evil’ I think it is not, it is the outcome of the religious belief in ‘the state’ that is, what can be described as, the evil.

            Logic dictates that: eliminating the belief in ‘the state’ would have to eliminate the idiocy and the violence that results from the existence of ‘the state’. I would be interested to understand how it is you consider the volume of violence that has resulted from the existence of ‘the state’ over, say, just the last 100 years could possibly be approached by a stateless human society. To my mind that is absolutely inconceivable. As for the ‘idiocy’ I consider the greatest measure of ‘idiocy’ is that which accepts, allows, begs-for, the state when clearly so much harm to humanity is resultant from the cult belief in the state, the religion of ‘the state’.

            If humans are as violent and idiotic as it appears you believe, why do we let just a few small number of them have control, have all the guns to hold that control and then make all the decisions for us. Is it not probable they will make violent and idiotic decisions all the time? (they are just human after-all).

            But of cause here is the matter. God would be able to make all the best decisions all of the time, even if we humans could not, for a moment, understand the majesty of the plan or why a little suffering was necessary. We must just put our faith in God. Except it is not God who is control in the religion of ‘the state’ despite the cult’s belief that ‘the state’ has such powers as necessary.

            This is why I do not say that belief in ‘the state’ is LIKE a religion. No, no, NO! Belief in the state IS a religious belief. And more. It is a cult. That is my point and you will never find me write comparing ‘the state’ to a religious belief. Now if you do not get me on this point you know what’s coming: nobody in a cult believes they are believers in a cult belief. Do they?

          • Impending Sky

            I agree absolutely that the state magnifies the scale and homogeneity of violence.

            “The trouble with giving examples is the examples take over the debate and the point can drop into the background somewhat”

            It is only too true. The same can be said for analogies. For that reason my post went into overtime last night. There have been so many condemnations of imperialism, but one has to ask if there was a better alternative at the time. The Spanish brought the practice of scalping into N. America. We would also be hard pressed to find reasonable arguments for leaving N. America as an uncontacted continent.

            The advancements of industrialization, infant mortality, etc.

            If we can say that the current modern paradigm ultimately results in the stateless society we idealize, then we might also say that we live in the best of all possible worlds. Looking retrospectively from that future tense it might occur to us that achieving that ideal would have been impossible without historical events.

            “As for ‘the state’ being ‘evil’ I think it is not, it is the outcome of
            the religious belief in ‘the state’ that is, what can be described as,
            the evil.”

            Moreover as an inanimate concept the state has no agency of its own and can not commit ‘evil’ acts. It is the murderous authority pulling a trigger who commits the act.

            In the TV series ‘Twin Peaks’ by David Lynch evil is personified by a malicious spirit ‘Bob’ which possesses individuals to execute his horrible agenda. In my view this is one of the best illustrations of the abstract concept of pure evil.

            “nobody in a cult believes they are believers in a cult belief. Do they?”

            If you will excuse me injecting further examples which might lead the discussion even farther afield; Those possessed by the malicious spirit experienced guilt and remorse. They were aware that they were being possessed, but tried to continue as best they could.

            We see this in some military personnel returning from horrible battles. They struggle to come to terms with the violent actions they signed up for. At a certain point the cumulative effect of banal ‘evil’ makes them retch. The mind expels the years of state indoctrination as toxicity overwhelms. Just the same, they are left with the choice of self sacrifice through disobedience or continued participation.

            It is easy for me to take this view so far removed from the scenario. On the ground, where both sides are most likely equally flawed, it would be much more confusing and complex. This brings us back to the initial example about the old west and imperialism. It ties in with the banality of evil, ‘just following orders’ mindset.

            I think that if we are to present ideas which effectively counter the state, that these ideas must account for the complex nature of the problem or exceed the quagmire altogether. Of course I am just rambling, I don’t have the solutions – but if they do exist I would imagine that they would revolve around offering an exceedingly positive alternative rather than negating or condemning the existing structure.

            Thanks again.

          • Thank you for this illuminating and enjoyable exchange.

            The thing about beliefs is that they can appear to work, and as they endure they develop to become more refined and can apparently appear work better still. I have a few friends who are Jehovah’s Witnesses. Now there are plenty of very serious and negative things about this dogma (and cult) but the fact is they are truly all very nice, apparently well balanced, people and generally appear to live satisfactory, happy lives. So why not all live like they do?

            The cult belief in ‘the state’ is also a system of thinking that appears to work, with some limited success, in organising a deeply complicated world; and its followers, devotees, are all on the lookout for ways in which it can be reformed to function more effectively, more equitably too. So that appears also to be all good.

            My opinion is that the concept of’ the state’ is beyond being able to modify to reach closer to an ideal because it is fundamentally flawed. The fundamental flaw can never be corrected and so instead will always contaminate the whole to a point that the whole will always be less than that which can be enjoyed without the application of the concept of ‘the state’ being included in human society in the first place.

            That does not mean a human society without a ‘state’ will undergo such an enormous seed change as is outwardly conceived as inevitable to occur in the absence of ‘the state’.

            Most aspects of our lives are already lived in an autonomous, self-directed, manner. The changes with statelessness would be more as if the operating system polarity was changed from a top-down to a to a ground up means of deriving most effective actions. Statelessness is just the next scenario on a road from clan chief, priest, tribal king, national monarch, imperial emperor and presidential statesman which will allow humanity to avoid the otherwise apparently inevitable alternative: a world state.

            If we do not place the freedom into the hands of the individual now, to live as they wish without oppression, the danger is that this coming alternative could be, looks set to be, deeply oppressive and one that may well endure as-good-as indefinitely. If human society is subjected to a global state the natural condition of human society, the belief in the one right of the individual (to live as an individual with their property, in self and in effect), could be forgotten forever. That will be to the absolute detriment of humanity and yet is, I consider, near imposable to avoid without the understanding of how statelessness is the better alternative by far, the ideal.

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