The “laws” of the Indian stock markets, when the speculative bubble building up over them is at its relative zenith, are simple: if Mr.Chidambaram sneezes, they would crash. And they would as well crash if Chidambaram doesn’t sneeze either!

No matter how mesmerising and alluring the bubbles are, they are always transient, whether in soapy waters or in choppy seas of the stock market. But what is new about the stock market soiree of these supposedly booming days? The days of the Bounty and the Bub(b)ly. The days of mindboggling quantities of liquid finance, crisscrossing across frontiers and currencies and ever ready to make the best of any opportunity. When speculation is the loftiest and legitimate “business”. But when the bubble burst, it was not a one-time crash. Thanks to the enormous liquidity, much like a string of soap bubbles blown by kids out of their straws, the markets also witnessed a series of booms and busts in the course of their recent convulsions, not over long periods but within days and even hours. Not only the wave lengths were short and amplitudes high but the frequency of fluctuations was also quite fast.

Today, as always, the markets crash and the panicky investors sell at a loss and the big speculators immediately start buying again, the markets move up, luring the small fish again, but the big fish start selling again, making a handsome profit, but the shares making a nosedive again and the small investors getting their fingers burnt again, when the cycle completes the first circle all over. All after a certain trading session starts and before the given trading day ends. But it never stops after coming a full circle; rather, it keeps moving in spirals. Day in and day out. But it is never a win-win scenario for all investors in the stock markets. Though generally described as a zero-sum game, the losers are always the gullible middle class/small investors and the gainers are the big players who are but a small band of supreme speculators.

But bonanza from the share bazaar is no risk premium for those who put big money at the stakes boldly. Even the risk – for whom, when and to what extent the risk is to operate – is governed by a small band. They “de-risk” as well as multiply the risk manifold times, at their whims as well as calculations. Hence, even the portfolios of the small investors based on best probability calculations go haywire before the machinations of these big barons, “calculators of calculations”.

In fact, speculation is so much institutionalised, legalised, legitimised and layered that any scrip, from the moment it gets listed, loses its character of being merely an instrument of conversion of money/savings into capital, of just being an instrument of mobilisation and centralisation of social capital and tuning it into investible productive capital in production of goods and services. That is only one part of the story, the lesser part. Mere corporate deposits and bonds can well play that role. Shares differ from corporate bonds precisely because of their speculative value for the herd. The total value the Reliance Power IPO generated could have generated power for the whole of Asia and more. But it generated greater frenzy than the power the entire money could have generated.

In the speculative world of share bazaar, real gains and real losses go side by side with notional gains and notional losses. The very thesis of the stock market is based on this hypotheticality. The essential law is that of “lawlessness”. Neither correct guesswork, nor calculated contemplation, nor lucky conjecture and not even correct gut instinct and flawless hunch or faultless surmise get always rewarded, thanks to the big fish among speculators. This is the only certainty about this world of uncertainty. Who could have expected that an almighty Ambani would flop? Millions went mad. And a brutal lesson they had.

Some would say – the big fish also sometimes get bitten slightly. But the small ones are not just nibbled but simply swallowed. Thanks to an unprecedented media build up and manipulation, Anil Ambani’s Reliance Power IPO might have set a record in getting oversubscribed more than 173 times and could have grabbed more than a mindboggling 170000000000000 rupees. But the day the Chota Ambani listed his scrip, he had a bahut bada blow. The market value of the scrip crashed by nearly 20 per cent of its par value. Since the market image and share value has more power than the efficiency in production, management or even distribution and marketing, Anil rushed with bonus shares. In fact, the production has not started. Not a single unit of power has been produced. Real earnings and operational profits have not entered the books even once before bookies can calculate the market jargon, price-earnings ratio. Even at the level of nominal share value one cannot begin to calculate the P/E ratio as it was only an IPO. The day it was listed, it went bang. Anil might have lost something. But the herd lost much. Very, very much. Anil promptly blamed it on manipulation by his opponents. Manipulation boomeranged. The media build up, the hype and the euphoria over the very Reliance brand-equity became unreliable. Anil’s manipulation of investors and even petty brokers preceded the Sensex crash that precipitated thanks to the shockwaves that emanated from the globalised Wall Street. $100 billions were wiped out for some 100 top companies listed on the Sensex, the newspapers said. Mostly notional but partly real, too. Only the individual investor can tell how much he/she lost notionally and how much in real if his/her burnt fingers can still count. Panicky Chidambaram and Manmohan echoed each other: the fundamentals are strong! Yes, not just the “fundamentals” of the economy were “strong” but the fundamentals of the stock markets were also equally strong!

Hence, sadly enough for Anil, the day he listed the IPO turned out to be a very inauspicious day, coming in the wake of the crash. Not just a Black Monday or Black Tuesday...Monday to Friday...every working day of the BSE became monochrome. Conspiracy...manipulation...Anil screamed. Investors blamed SEBI. The doyen of SEBI blamed the media anchors. Anil blamed all and called for an enquiry as if that would remedy anything! Whether there was conscious counter manipulation or not, the man who joined the richest on earth could not prop up his scrip even after marshalling his unimaginable wealth. Manipulation and counter manipulation. Charges and counter charges. But nobody, not a single one from a different herd called media, bothered to question whether Anil can repeat Dhirubhai’s so-called “saga”. Whether Reliance Power can replay Reliance Industries’ success? Whether an infrastructure industry, especially in power sector, can re-write the same old story of unprecedented triumph in the present Indian conditions? Whether oversubscribing over and above the record herd rush levels was sane enough? One pays for one’s follies! Recompense in retribution! Karma!

But not all ‘investors’ are equally rewarded in this “retributive justice” of a different kind. Not everyone harvested what each sowed. True, the ambitious small investor who takes his/her meagre savings is also a “speculator”. But there are speculators and speculators. Of first order and higher orders. The present-day generation of market manipulators need not be Harshad Mehtas hand in glove with corrupt bureaucrats of some Canara Bank to roll the public money in the form of bank capital to artificially jack up the markets in an unaccounted manner to carry on simultaneous insider trading. Any number of FIIs and investment funds are readily waiting at the doorsteps of the present generation with unlimited hot money. Liquid money or hard cash is also passe. There is yet another higher order of speculation involving Participatory Notes or P-Notes. Players who play upon the games investors play in the primary markets. Speculators of a higher order who speculate on speculators and their speculation of the first order. Wheels within wheels and rings within rings, spread over layers and layers of speculation.

In the stock market, all are identical as speculators but not all are same. Indistinguishable in their act of speculation but disparate and distinct in terms of the outcomes of their activities. All speculate and few not just speculate over speculation but even govern the contours of speculation. The system can survive only if a large number of players become preys, gullible or otherwise, to a handful of players who are the pillaging, predatory plutocracy and their patrons in the world of high-finance. Often, promoters themselves become speculators par excellence a la Anil. Initial Public Offer itself offers unimaginable power of, and for, speculation. The brand equity itself – the Reliance epic written by faceless upstarts laundering political funds and bending ruling establishments, characteristic of crony capitalists, and not just the epic but part of the real life Reliance empire bifurcated among feuding brothers which built up astutely though not assiduously, brazenly and not in the style of classical entrepreneurs – was put at stake. As in the case of life sciences and living organisms, the bigger and more complex an organism, the more vulnerable and brittle it becomes. Mega offer matched by a thundering thud! Earlier, a dazzling display of corporate dog-eat-dog drama, brother biting brother. But now the younger one bit millions who lost billions.

Share market gains are not just a part of industrial or commercial profit though it is part of the overall surplus-value siphoned off. Not even in equilibrium with the rate of interest of the interest-bearing capital. It is not just dividend on investment. It is the potential speculative riches that drive the herd and periodically deprive it as well in the casino “economy”, which however, is an inseparable part of the economy of the bourgeoisie. But as rate of profit ultimately governs the rate of interest, the laws of real economy, in the ultimate analysis, governs the splendor of speculation. It was indeed difficult to judge as to which one of the two bubbles was bigger and more vulnerable: the one on the Dalal Street or the hype in the pink papers and business channels about the growth miracle that was supposed to go on for the next two or three decades! India that is supposed to register 9-10 per cent GDP growth for the next two-three decades putting even the post-War long wave of the US and the Europe into the pale. Exaggerated forecasts became a big industry in itself – $350 to 400 billion investments waiting to happen in infrastructure, to cite an example! Only many people could not watch it on the idiot boxes thanks to the perennial powercuts!

An economic miracle not by overcoming the agrarian agony...not by expanding people’s purchasing power...not by deepening the domestic market. The country would continue to remain home to the largest number of poor...the largest number of malnutritioned...and incidentally, also to the largest number of billionaires and millionaires in the whole of Asia. A boundless boom, a growth miracle which would be based on...Corporate landgrab through SEZs...real estate speculation...natural resources loot...grabbing the minerals, commodities and even watergrab, diverting irrigation water to industries and mining projects...labour-power grab, exploiting skilled bluecollars cheaply...BPOs...exploiting monotonous whitecollars...IT and ITeS...intellectual labour grab...snatching away the brain power of a highly skilled labour and finally grabbing the savings, meagre money wealth of the millions through the stock market. Grabber barons! And their garbled development! The only good thing that the Sensex did was to ring the bell at the right time.