Angry Jobless Indians, Social Contracts

Allow me to highlight some of the scary stuff below…

Indian Exporters May Cut 10 Million Jobs on Recession (Update2): “Indian exporters may fire as many as 10 million workers by March as the global recession curbs demand for clothes and jewelry, eroding Prime Minister Manmohan Singh’s popularity before nationwide elections.

“The year 2009 is going to be the worst year in history,” A. Sakthivel, president of the Federation of Indian Export Organisations, an industry lobby group, told reporters in New Delhi today. “Exporters don’t have orders beyond January.” The commerce ministry estimates 500,000 jobs may be lost out of 150 million workers at textile mills, manufacturers and jewelers.

Singh’s Congress Party-led government faces an election contest by May as the economy grows at the slowest pace in six years and a record stock-market rout erodes savings. Singh’s top adviser Montek Singh Ahluwalia on Jan. 2 ruled out further aid for the economy after two stimulus packages in a month.

“There’s really nothing the country can do to avoid a further period of economic pain and job losses over the next few months,” said Robert Prior-Wandesforde, an economist at HSBC Group Plc in Singapore.

International trade will shrink in 2009 for the first time in more than 25 years as economic growth slows and commodity prices slide, the World Bank said on Dec. 9. World trade volumes will probably contract next year by 2.1 percent, hampered by exchange rate volatility and flagging import demand.”

Probably, in the first quarter of 2009 optimism will carry prices up to the major resistance level of around $26 on the India Fund (IFN). This level provided support from 2006 thru to the middle of 2008 and will bring formidable supply to market. The declining 200 day EMA (green line) is already below this level and will provide resistance as well.

Patiently sitting in ambush with orders to sell short around these levels will provide the lowest possible risk entries for the inevitable drop into the Abyss...

10 million unemployed you men make for a 'volatile' political environment in the world's largest, messiest democracy where an election goes well if only a few small bombs go off.

Other major export economies are in just as much trouble. In China: “The figures are horrifying.” In China, the social contract is that the government creates widespread economic prosperity. In return, the plebs won’t make trouble for the ruling patricians. They also won’t demand political liberty. Export jobs in China are disappearing as fast as in India and the social contract is about to be severely stressed.