What's good for the US is good for the New York Stock Exchange. But what's good for the New York Stock Exchange might not be good for the United States.

William Martin , Jr ( 1906-1998)

Chairman, US Federal Reserve System

Morgan Stanley had just completed a whirlwind road-show across India, ensnaring giddy-headed investors into buying its much-hyped IPO for a mutual fund, marketed with such deceptive strategy, that the gullible greedy lot had thought they had bought into an emerging Reliance share. Some of India's leading hot-shot merchant bankers had duplicitously allowed a false notion to pervasively prevail that Morgan Stanley was like glittering gold; an investment that was a roadmap to El Dorado. That was 1994-95.

As I write this column, Morgan Stanley is close to being permanently vanquished, its stock tumbling dramatically, leaving it to Mitsubishi bank for a complete buy-out. Even in those heady days, when working with a blue-blooded investment bank was considered a career pinnacle, one suspected something rather extraordinarily strange about this sublime , sacrosanct breed called investment bankers.

"What do you think, should we invest in this chaalu ( fast) stock or just ignore it?", asked the foreign-educated, market savvy, media-obsessed portfolio manager for a global asset management firm. Outside, a rotund, gold-plated spectacle-wearing burly man with a grin wide enough to accommodate the Grand Canyon waited anxiously. The concerned stock was seen as the then Ipod of the emerging portfolio; the broker had some strong insider information on a proposed bonus issue straight from the horses' mouth.

We shrugged our shoulders; after all, it was the chief investment officer who had to take the final call; the rest of us were mere signatories on pre-printed forms. A dart -board stood framed disconsolately on the blank white walls opposite the CIOs desk. " Let's take a shot. If it hits the bull's eye, we buy full quantum. If we score under 8, we pick up half the recommended allocation. If it's less, we give it the thumbs down". He took the sharp-pointed dart in his hand, and taking aim glided it towards the bull's eye.

In all fairness, I do not know whether he finally executed that transaction based on the result of his Robin Hood aim, but that was the style , mood and attitude that prevailed. Equity research did not mean plant visits, extensive deliberations with production staff, interacting with the firms' suppliers and dealers, analyzing industry trends. Or assessing customer feedback. Most decisions were a function of secondary published research, subjective calls, insider trading , business networking, and confidential invitations to promoter boardrooms.

I met a well known head hunter recently by sheer accident at a private gathering, and asked her; " So what do you think of the current global mess? I guess it exposes the over-rated over-paid over-promoted tribe of "I" bankers. The I, Me, Myself lot who cannot see beyond their annual bonuses and extravagant off-sites, and yet appear so pious about stakeholder interests". Her reply stunned me.

"Oh , come on ! It's not their fault. They are greedy. It's the regulators to blame". Of course, it is also a system failure, borne out of regulator apathy, thanks to America's passionate embrace of pure market capitalism, but isn't the regulator and the government today working over-time to bail-out the speculative deals, innovative derivatives, subsidize the hefty pay packets of investment dudes and crony brokers, to preserve sanity on Wall Street. As a disgruntled friend told me " The next time you hear these guys saying they are bullish on TV channels, all you will think of is that they are all bull". Welcome to the world of cowboy capitalism!

Of course, the commercial and investment bankers can always justify that the CDS ( credit default swaps) was a breakthrough product, meant to create a new derivatives market, and free up capital for more structured lending. Ultimately, it would have meant higher ROI for both customers and investors. But surely, investment bankers were not expected to be so stupidly naïve about the over-all exposures multiplying through a vicious chain of internecine investments , which portended a huge systemic risk. Even a high school student could have predicted a certain bloodbath , if just one variable----home loan defaults , began to escalate. After all, they were sub-prime by definition, weren't they? That is exactly what transpired.

Which brings me to Mr Friedman. Perhaps that is what Thomas Friedman meant when he said The World is Flat, his much touted international bestseller, titled with an appropriate catch-phrase for grabbing eyeballs, based as it is on a factual fabrication. As central banks all over the world converge to salvage the US financial mess and their own ( check the speed with which RBI has swung into action) , it's repercussions being felt world-wide, maybe this is the "level-playing field" that Mr Friedman postulated on in his book, which at best, can now be called pulp fiction.

The Wall Street fiasco which has led to the investment banks tumbling in a calamitous heap, best explains why Friedman's book is based on fragile assumptions of continuous world-wide prosperity, over-dependence on technological innovations, connectivity and mathematical programming. In the 1930s , the Great Depression was a function of the stock-markets tumbling on speculative investments; almost 80 years later , it is a similar chain of avaricious events that has led to the big bubble burst. What goes round, comes round and around, Mr Friedman. And that can only happen if the world is round. Not flat. Galileo can rest in peace, even as Mr Friedman scripts another bestseller in his quiet backyard.

But perhaps Mr Friedman biggest blunder in his entire book which wants us to believe that the world is flat, is because his world conveniently does not include Africa, calculatedly forgetting the dark continent of the world. Because Africa is HIV/aids infected, suffers regular epidemics, starvation levels are shockingly high, ethnic genocide continues, politically irrelevant, and economically bankrupt. It has no "value added proposition", perhaps.

Friedman also fails to explain a peculiar trait of Indian IT industry; which is that the Indian IT behemoths who have created huge market capitalization and global brands , and have been given special status through tax sops by the Finance Ministry , still remain unaffordable for India's domestic corporate sector , and new entrepreneurs in the SME segment . Why? Because it is so obsessed with profiteering motive alone , Friedman's value-creation is based on pure commercial considerations and has nothing coherent in terms of terms of larger social responsibilities, that may require lesser operating margins. Isn't it therefore a peculiar paradox that the global investment bankers are now looking at government charity for a survival lifeline ? It is what I would call as " reverse nationalization".

Friedman should have maybe dug deeper than merely confabulate with IT honchos to find out why, despite possessing the supposedly best minds of a new India in the knowledge sector, why is it that Bengaluru is today India's worst infrastructural mess? You will get a collective response-"It's the government, stupid! But I have another question to ask----"Why not use your creative intelligence to initiate change as opposed to lobbying in Delhi's corridors of power for tax benefits and other freebies? And by the way, has someone asked Corporate India as to where is their RTI Act? In fact, ironically enough, it is the central government which has made the gigantic step towards transparency, but besides tall talk on ethical standards, India Inc. can still hide behind fudged numbers, through an accountant's artifice.

Perhaps Mr Friedman will be best advised to look inwards and introspect on a simple maxim which applies to investment bankers today; surely, if stock market experts were so expert they would be buying stocks, not selling advice. If New Orleans itself is so far removed from Manhattan, Mr Friedman, don't you think it has been rather presumptuous on your part to hard-sell to us all that the world is flat?

Yesterday, I was out for a weekend dinner, and ordered a delicious baked chocolate fondant for dessert, which on just a slight pierce, melted prodigiously into a circular pool. It reminded me of Morgan Stanley. It was a Japanese restaurant.