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At a joint press conference with Trinamool Congress chief Mamata Banarjee today, Samajwadi Party chief Mulayam Singh Yadav announced withdrawal of support to the UPA government retrospectively from 2008. When questioned about his strange move, he said that in an era where government imposes retrospective taxation and retrospective Coalgate scam investigations, retrospective withdrawal of support is also acceptable.
The announcement has understandably created a flutter in political circles. Quick to seize on the implications, BJP leader L. K. Advani inferred, “This means the government has been illegitimate since 2008.” Prakash Karat, on behalf of the Left, thundered, “The Indo – US nuclear deal is no longer valid.”
CNN-IBN’s deputy editor Sagarika Ghose went into overdrive about the fallout of Mulayam’s retrospective withdrawal on governance and administration. “This means all the decisions that the Government took during the last half a decade are invalid. It is a breakdown of the constitutional machinery. We really do not know how many decades we will need to untangle and roll back these invalid decisions,” she shrieked during her show, Face the Nation.
Political pundit Yogendra Yadav allayed Ghose’s apprehensions. “The Indo – US nuclear deal was signed before the government took support of the Samajwadi Party and so it stands valid.” He said, “After the Indo – US nuclear deal, the Government has thankfully not taken any decision for the last 5 odd years and so there is no question of what Sagarika Ghose calls untangling and rolling back these invalid decisions. As usual, she is kicking up hysteria without fully understanding the issues, Rajdeep,” observed the pundit turned politician.
Meanwhile, premier investment bank, Goldman Sachs has suffered a loss of 5 billion dollars on the derivative contracts it wrote against Mulayam. It has emerged that apart from the Indian political parties, Fortune 500 companies such as GE and Walmart had also purchased call options to hedge against Mulayam. A visibly crestfallen Jeff Goldbaum, Vice President of the Exotic Derivatives Trading Desk at Goldman, said, “We had priced in the U turns of Mulayam in the contracts but had not anticipated a retrospective U turn; it was a black swan.” It emerged that many large investment banks and financial institutions have exposure to Goldman’s toxic Mulayam contracts thereby threatening the global financial system.
Noted economist Nouriel Roubini said, “These unfolding events are likely to push the global economy into a U shaped recession; I mean a Mulayam shaped recession.”