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Uncertain Tomorrow

The markets have been going up and up for the last few years, not only in India but also elsewhere. But how long will the boom last?

When I was growing up as a small boy in Goa, one of my jobs was to run errands for my grandmother in and around the village. Every morning, I would be asked to get some fish, which meant two things. Go to the beach, and wait for the fishing boats to come in. Then you pick your lot. Or go to the village fishpond and ask the owner to spread his net, and wait for the catch.

The owner, a taciturn old man called Antonio, was straight out of Ernest Hemingway. "What do you want today?" he would growl between his yellowing teeth. "A couple of merlins, a few prawns, and half a dozen crabs," I would say.

This was almost like placing an order in a restaurant, but it worked every time. After a while, as the net was pulled in out came the merlins and the prawns, and the crabs, ignorant of their fate jumped joyfully into your lap.

"The same thing tomorrow," I would say before leaving. "I don't know about tomorrow," Antonio invariably said, like Clerk Gable in "Gone with the Wind": "Tomorrow is another day."

Antonio was never sure about tomorrow, though in our village at the time, tomorrow were rarely different from today. But anything could happen and did. The monsoons could destroy the pond, or worse, it could just dry up. It had happened in the past and could happen again.

I wonder what Antonio would have made of today's stock markets. They have been going up and up for the last few years, not only in India but also elsewhere, disgorging billions of dollars worth of cash across the world. Just like Antonio's prawns and crabs.

What is happening, says the London Economist, is that profits are going up by leaps and bounds, and have never been as high as they are today. After-tax profits in America rose from about 5.5 per cent in the early 1990s to more than 9 per cent in 2003. American profits are now close to a record. The share of profits in GDP in both Europe and Japan is higher than ever.

In fact, profits as a share of GDP are going up faster than the share of wages. Some pundits agonise, says the Economist, that profit growth built on the impoverishment of workers at home and export of jobs abroad cannot be sustained.

This is what Antonio meant when he said he was not sure about the future, though there was a lot of water in the pond and lots of prawns in the water.

Prawns yesterday, prawns today, but no prawns tomorrow. This is what Hemingway's fisherman also said or hinted at in "The Old Man and the Sea", for which he got his Nobel, before he took out his pistol and shot himself. Hemingway was not sure about himself either.

How long will the current stock market boom last? That depends on how soon the fishpond will dry up. When I visited Antonio's pond the last time I was in Goa, the pond was still there, though Antonio is dead. But the sea is now perilously close, and I am not sure anymore about tomorrow.