India, the wounded Asian Tiger; Emerging stocks' emerging problems; More Americans living alone

1 India, the wounded Asian Tiger (Khaleej Times) The Asian Tiger’s roar that once had the West sitting up and taking notice not so very long ago has been muted and India is now licking its wounds. The rupee is in a freefall and the government is in its customary funk. The economy is anything but healthy thanks to a deadly combination of global forces, petty power politics, scams, sheer complacency and missed opportunities.

Not since the balance-of-payment crisis of 1991 has the Tiger found itself cornered and trapped. But Indian policymakers won’t admit it and instead of taking some bold steps to arrest the rot that has set in, they prefer to bury their heads in the sand and hope the problems buffeting the country will go away. India is no longer shining. It’s slowly sliding into a crisis and there isn’t a glimmer of hope that someone, somewhere will prevent the bruised and battered economy from getting worse.

Everything is going south. The rupee is nosediving (13 per cent in three months), the stocks are tumbling, banks shares are shrinking, growth is limping (at 4-5 per cent), its current account deficit is ballooning — it was nearly 7 per cent of the GDP at the end of 2012 — much needed foreign capital is escaping and bad debts in state-run banks rising (according to a report in the Economist, “10-12 of bank loans are dud!”). So what’s going north? Besides the ire of 12 billion people, graft, red tape and multi-milliondollarscams is on the rise and so is inflation now hovering around the 10 per cent mark.

With elections to be held in May 2014, the biggest fear is that the government may resort to populist measures like the recently passed food scheme introduced to increase the vote bank. This is not the time for desperate measures or micromanagement. The government should focus on further liberalizing the market like it did during the boom years between 2003-2008, control inflation, hold down its deficit, cut down fuel subsidies, get public banks to recapitalise and get its infrastructure right. Will history repeat itself and see India slipping into crisis like it did in 1991? One can only hope not.

2 Emerging stocks’ emerging problems (Abheek Bhattacharya in The Wall Street Journal) For emerging markets, most of the pain has been in bonds and currencies. But this last week, foreigners began selling stocks in earnest, $12.3 billion worth. Take India. Foreign investors have been basically propping up the stock market, having piled in a net $12 billion this year, according to regulatory data. Without them, Mumbai's benchmark index, down 5% for the year, would have fallen more.

As outsiders keep accumulating stocks, their ownership of India's top 500 stocks hit a record high of 21.7% on June 30, says Citi. And that percentage has likely risen further since then. But foreigners' mood could be changing. Investors were spooked when Indian officials imposed capital controls on residents late last Wednesday. Between Monday and Thursday this week, the stock market had foreign net outflows of $517 million.

Another worry is the turmoil from the tumbling rupee is feeding through to tightening credit and slower growth. That has pushed locals to sell. In the past, according to flow data, foreign investors tended to pull money out only after they see stocks fall. A looming problem for emerging markets is that the Federal Reserve hasn't even started curtailing its bond buying yet. When it does, the outflows of the past few months could accelerate as investors abandon risky emerging-market assets for the higher safe yields of treasuries.

India's broader financial system is still protected by its foreign-exchange reserves and relatively low levels of foreign debt, so a full-blown crisis might not be in the offing. But as the Fed's bond purchases fall off, the beating that Indian stocks take may pick up.

3 More Americans living alone (Los Angeles Times) A growing share of Americans live alone, despite the economic woes lingering after the recession, a new report from the US Census Bureau shows. People living alone made up more than 27 percent of American households last year - a marked increase over the 17 percent who did so in 1970.

"The rise of living alone is the greatest social change of the last 50 years," said Eric Klinenberg, author of "Going Solo: The Extraordinary Rise and Surprising Appeal of Living Alone." The Census Bureau report underscores that despite costs, "Americans will pay a premium to have a place of their own," he said. Researchers offered several reasons for the long-standing trend: Americans are waiting until later in life to marry, stretching their years of singlehood. As a result, married couples have become much less common, dropping from 71 percent to 49 percent of American households between 1970 and 2012, the new report shows.

Elderly people are also spending more years alone. "Adults have been able to live longer, and as they're healthier, they can stay in their own homes instead of moving in with a family member" or heading to a nursing home, said Jonathan Vespa, one of the demographers who wrote the report.

"Living alone is not weird anymore," said Michael J Rosenfeld, associate professor of sociology at Stanford University. The fact that it has persisted through tough times, he said, "is a demonstration of how much the value of independence has grown."