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From the executive editor

In the midst of party, everyone forgot that it had to end some day. And that they would have to wake up with a killing hangover.

Alam Srinivas        Print Edition: November 13, 2008

The recent crash is unique in India's stock market history. For several reasons. First, there are no villains in this 'bearish' horror plot. No Harshad Mehtas, Ketan Parekhs or M.J. Pherwanis. Nor are there any hints of local cartels and stock manipulators, or nexus between managements, policymakers and big market players.

Besides, the epicentre of the financial quake that has shattered the safety net of millions of people lies outside India. It is a tsunami unleashed by Americans, from the US, for reasons that are not even associated with stocks.

Some people blame the FIIs and hedge funds for fleeing with their dollars. But they were behaving like any other investor pack; they have the right to buy and sell whenever they wish to.

Second, there are no individual gainers who made a quick buck at the expense of other (especially small) investors. Almost everyone made money when the market was booming, and almost everyone lost when the panic set in.

The over 50% fall in India's indices in the past 10 months hit institutions, hedge funds, brokers, high net-worth individuals and small investors equally. Similarly, the impact on various stocks-large-cap, mid-cap and small-cap-has been uniform.

The usual shrieks- that have accompanied all previous downturns-about how policymakers ensured the decimation of small investors, have been missing. For instance, no one is blaming P. Chidambaram. So this is possibly the only "inclusive" and "bi-partisan" boom 'n' bust phenomenon in the world.

Finally, this is possibly the only stock market exuberance where greed played a secondary role. Sure, people wanted to ride the boom and make pots of money. But there were bigger reasons for almost everyone to believe in India's growth story.

It was driven by the new sense of confidence and ambition that has gripped middle-class Indians. They believed in the possibility of a double-digit GDP growth, India's emergence as the new superpower, Delhi's ability to talk to Washington as an equal, and the 21st century being Asia's century.

In the midst of this enthusiasm, everyone forgot that the party had to end some day. And that they would have to wake up with a killing hangover.

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