Sree Iyer: Namaskar and welcome to Daily Global Insights, episode number 117. Today is the 12th of March 2021. As always I have with Sridhar Chityalaji. Sridharji, namaskar and welcome to the PGurus channel on this Mahashivaratri day.
Sridhar Chityala: Namaskar and good morning to you and good morning to everybody in India the Maha Shivaratri just wrap up and then whereas here, we will be culminating it as well. So thank you and best wishes to all.
Sree Iyer: And the main points in today’s News Bulletin, Donald Trump claims credit for covid-19 vaccines the first year of its anniversary.
Biden to procure a hundred million doses of extra J&J vaccines, viewers might know that J&J requires only one shot.
How three hours and ten experts got India’s homegrown covaxin efficacy and safety tag.
The global covid figures total 118.85 million cases, 2.63 million deaths, 98.38 million recoveries and 21.84 million Active cases.
And in the US news, Biden’s first month in the office sees record levels of illegal migration, including illegal immigrant children. Sridharji, is it now getting under control? It is still going unabated, sir.
Sridhar Chityala: I think what is going on is the formalization of the illegal process as a legal method of access that’s what is going on.
Sree Iyer: Well, here’s a bit of a concern that this is still going on and I thought that with additional troops and other things that things would be getting under a little bit of control. But it looks like it is still going on unabated. The House Democrats flood Senate with partisan bills in a scheme to burst filibuster. For those viewers of ours who might not know what a filibuster is perhaps you can touch upon that word and then explain the new strategy of democrat, sir.
Sridhar Chityala: I think the way the filibuster rule has to be looked at as is a mechanism that allows minority parties to block. Legislation from advancing the Senate is predominantly for you know controversial or people who are on either side of the fence on legislation around climate, unionism, minimum wages size of the stimulus, allocation of capital you saw that around the immigration issues, the treatment of illegal migrants illegal border-crossing Etc.
The filibuster has the ability to keep debate open on a legislative item until the Senate votes to close it. And obviously, the debate will require 60 votes instead of the usual 50. If you don’t have 60 votes, you can’t move to final voting, so, the debate goes on. So, one of the ways that they came up with is when both parties are playing whole Hardball. All you need is either to get 60 votes or bypass the filibuster to accomplish anything. The reason why they don’t bypass the filibuster is, it applies equally to either party. So, today if you don’t use the filibuster and use a simple majority, which is adequate for the constitution. You can just use the simple majority rule and you know introduced every legislation that you think suits your party but, recognize that when you do that when the majority changes the same rule will apply when you are sitting in the minority and the opposition. So this is like an implicit kind of soft mechanism that is used by either party and the objective is to use this judiciously rather than going on saying, you know will continue the debate for hours for every legislative piece that is coming in. So the Senate is Senate Democrats are using a norm called as you know, if you send 10 legislative or ten major reforms to the Senate, they’re not going to be able to use the filibuster rule for every one of those. Theirs is no implicit or explicit rule, but you’re not going to be using that as common-sense for every piece. So that’s the filibuster, the name itself is a little misnomer an oxymoron, but this is not enshrined in the Constitution. It just evolved as a process between the two main parties to make sure that there is respect for passage of the law on either side.
Sree Iyer: The Democrats urged the EPA the environment Protection Agency to expand powers to protect Biden climate agenda. Pelosi Schumer zero in on gun controls. Expansion of the gun background checks a sweeping reform that failed in 2019. Actually, I for one like this one. Where are your thoughts?
Sridhar Chityala: Well, I think this is the diametrically opposite between the Centrist versus the conservative what you call to the right. The centrist often believed that there has to be legislation that is a fair and just mechanism to make sure that adequate safeguards are put in place before a license is issued for purchase or acquiring a gun.
The same thing applies, you know for the transfer of a gun, though it’s private both for private and public. They want to extend the same rule rather than you know, I’m the grandfather, so, I want to give it to my grandson the gun, once he reaches a specific age, that’s a private matter. So, therefore he says, okay, please use the gun. So what the law says is whether you are private or whether you are non-private every transfer or every method by which you give control for the usage of the gun has to be regulated.
Now, on the contrary, The centrist believes or the right the conservatives believe, I have acquired a gun, I’m licensed. I am registered so leave the judgment to me. You mean to say all the crimes that are occurring out there, is only because of this licensing? Otherwise, there is not going to be. It is like saying, you know, if you have police stations, there’s no crime. I’m so that is their argument. So I understand your point of view, which is to say as a Centrist. You would want to say Hey, you know, why not we have this thing and work it out, you know to me, personally, when I look at it, you know safety mechanisms work up to your point. We don’t mind experimenting with it but rather unilaterally going from one extreme to the other extreme because going from one extreme to the other extreme is neither going to solve the problem.
Sree Iyer: And viewers as a cadet at NCC, I learnt to fire a 303 rifle as well as a .38 Smith & Wesson. These are fun things to learn when you are going through NCC either a high schooler or a college student. I urge every one of you to encourage your kids to be part of NCC because it is sort of like being part of the army, but, you learn the discipline and all the other good things that go with it.
50 days have passed in the Biden administration and according to one poll, over 50% of the population thinks that Biden is not fit to be president in terms of his health and to just bolster that point of view. It is now 50 days and the president has still not called a press conference. We have to remember that Donald Trump did on the 28th day of his presidency, your thoughts, sir?
Sridhar Chityala: My thoughts are I think that there is growing speculation as to who is running the United States and there’s no coherency and consistency, you know in terms of some of the policies that are coming out. You remember we talked about the flip flop of the Iran side of the situation. We are beginning to see the flip-flop on the Chinese side of the situation. On one side you have covid discussions going on and then the China threat issues going on as part of the quad and as part of the bilateral discussions that is between the defence secretary and the Indian Defence Minister and between two plus two between the United States and Japan. And then Mr. Suga and Mr. Biden and then the discussions with Korea but on the flip side, you have another discussion that is taking place in Alaska between Biden and Blinken with you know, Li Keqiang, who is the Chinese Prime Minister and then Wang Yi, who is the foreign minister and then made very clear which is namely to say the United States must respect the Chinese kind of sovereignty and its laws and its mechanism. So, it is raising a question which is to say while you have this aggressive posture on one side. What is this discussion in Alaska about which is secretive which is outside the purview of the other nations?
Sree Iyer: Well, it’s an interesting question that you posed, sir. And viewers, those of you who might be wondering who did Xi Jinping defeat to become the premier of the Chinese Communist Party. It was the Prime Minister, he is the Prime Minister of China Li Keqiang. So, who knows what is in store there and we will know soon enough. I guess.
The next point sir is Farmers react to billions in covid-19 relief. So relief bill for black farmers, this looks like they are segregating and especially looking at a segment saying it doesn’t make common sense covid relief of 4 billion to pay up to 120% of the debt. I can understand a complete write-down sir, why 120%?
Sridhar Chityala: The 120% debt is you know as on January 1st, there is a number and there is an accrued number that goes beyond January 1st. And so what the Biden Administration has done as part of the covid relief is to set a target of four billion dollars which could as well be 110% it just translates to about 120% but it is just not black Farmers. These are people who are Asian, Latino, you know the native Indian and as well as the black farmers. Now, this is the group that’s going to get the benefit whereas the white farmers are not going to see a penny of it flowing into their kind of coffers.
Sree Iyer: Perhaps you should rephrase it as non-white. So I stand corrected sir.
In India news, building the world’s most expensive Imaging Satellite, ISRO ships key component of NISAR to NASA a little bit more detail about NISAR, is this something that NASA is going to launch into outer space?
Sridhar Chityala: Yes. I think that it is a dual-band two radar, you know satellite which ISRO will be launching of using the GSLV satellite from Sriharikota, so this is a collaboration between NASA as well as the ISRO on integrating a dual-band antenna to be launched by India. But the key component of it is being provided what they call is the SAR (Satellite Aperture Radar) is being given by the ISRO to NASA. What it just tells us that the distance that India has travelled in science and especially in Satellite in terms of offering its capabilities to such a sophisticated and one of the oldest space organizations NASA.
Sree Iyer: Yes, impressive indeed and from Brickbats to Bouquets, Canada puts up banners in Greater Toronto, thanking India and Prime Minister Modi for the much-needed vaccines. Viewers, I might as well tell you I live in Silicon Valley. There are banners for just about anything and everything happening in India, including the SSR case. So, this comes as a pleasant surprise. Your thoughts sir, this 180 degree turn around thinking in Canada?
Sridhar Chityala: Well, I think that you can see that it appears it also says that Hindu Forum of greater Canada. So the point is that Trudeau stood up just a couple of days ago. I think we reported that again. Trudeau stood up and basically said, You know India is the vaccine lab of the world and if the world is going to come out of covid, India is going to be the anchor behind this. This is after all the brouhaha on the farmer’s agitation and other issues including is an unannounced visit with people and then going into Punjab Etc. It seems to be like a sudden flip-flop and now he is saying, you know, Canada has no Manufacturing facilities and capabilities for the vaccine, it is reliant on imports. So, the story here is that it asked for an emergency 500,000 then he asked for another 1 billion and India has come forward and supplied. So there’s obviously everybody is very happy about it.
Sree Iyer: Indian Air Force is set up to raise its second squadron of Rafale combat aircraft. It’s going to be perhaps ready around the middle of April and it will be based out of Hasimara. So this means that India is now quickly wrapping up on its Rafale squadrons, isn’t it?
Sridhar Chityala: It is on the north and east which are the Strategic commands that they are looking at. We are looking at east then you’re looking at China. So which is especially around the North-Eastern borders. As far as the North is concerned, it has already got the Rafale Air Base to cover the Chinese incursions on that side. So they have covered themselves on L AC as well as on the Arunachal Pradesh side with its positioning. It also says to you that India is not taking the Chinese disengagement process very lightly. It is equipping itself. It doesn’t want any surprises on the border.
Sree Iyer: And India will be discussing. This is a sneak peek into what will be happening between Rakshamantri Rajnath Singh and the defence secretary. India will be discussing fighter planes or fighter jets, unmanned drones, communication systems and so on. So the table is now set for India to start requesting or accessing some of the most top-notch technology from the United States. So all this is in the deterrence of perhaps an invasion by China. What are your thoughts?
Sridhar Chityala: I think that what India is saying is, to be a superpower and to be an economic power merely having GDP alone is inadequate. So for it to be an economic power. It must demonstrate, it has both industrial as well as a military power to combat what is to come? So if you see carefully the way we try to orchestrate the agenda in PGurus is around all the kind of nuts and bolts that India is enabling itself in terms of being what it is; be it on the defence side, be it on the manufacturing side, be it on the deterrent side and being part of the greater groups in terms of developing some of their Strategic technologies that are to come. We will soon see when we get to Asia that India is going to be part of a greater change. So I think that’s the message that we are trying to communicate. One is the satellite, the second is the vaccines, the third is the Air Force as a deterrent, forth is discussions with the foreign minister which are about business, ‘Now you want to do business. Let’s do business and open up the two bonus. We already have decks from you. Now. We already have Chinooks from you. We already have the F17s and F-35s and the manufacturing capabilities here. So where do we go from here? I think that’s the agenda that we are looking at.
Sree Iyer: In Asia news, Australia now is going after browsers. Remember, viewers that Australia was acting against social media platforms and now it is going after browsers. After passing the new news bargaining law in terms of what is the Market share, Safari has a 51% market share, Chrome has 39%, Samsung 7% and Mozilla 1% This is all devices. On desktops and laptops, it is Chrome 62%, Safari 18%, Edge 9% and Mozilla 6%. If you want to know what I use, I use Edge. Conflict with China will be on land, not just at Sea according to a US general. So where will the land conflict be, Sridharji? Is it Taiwan he is referring to or LAC?
Sridhar Chityala: Both. Taiwan, LAC, also could be encroaching into the lands of the Philippines, Indonesia, and even Myanmar. So, therefore, what they’re saying is that no longer assume that, there’s nothing to battle. We lose each other and demonstrate, who has got better armoury. But if I occupy land then I have a Strategic opportunity to expand my footprint and also, mount my flag. Taiwan, the Line of Actual Control and the Northeast or really really the areas besides Nepal. Nepal is very much in the eyes, Bhutan is very much in the eyes. So the whole Himalayan kingdom is one. Then, once they get the Himalayan Kingdom and once they get the Taiwanese, which is around South China that side of East Asia, then their attention will shift to Africa. Remember, they are also contesting with the United States, Europe, and even India in the Gulf of Aden.
Sree Iyer: QUAD Titans’ Rare-Earth cooperation, it’s been a known fact that China has been grabbing all the Rare Earth elements across the world and this has been going on for a few years now, perhaps even a few decades and finally, I think QUAD is putting its Act together and trying to form some sort of a corporation where they can essentially counter China. Is it a little too late, sir?
Sridhar Chityala: No, it’s not. I think that they’re re-crafting the value chain. The value-chain comprises technology, funding, and development. So in other words, what they’re saying is that we will now do a Global procurement then we will establish how the funding will occur. Then there is the development and then there is distribution. So in other words, you’re not reliant on one single player, but you are harnessing the resources. For example, India is capable, Australia is capable to grant its resources. Even the United States has the ability. So the question is rather than each country by itself how do you harness it? This is my other point, which is you can begin to see now India being slowly pitched and positioned in every one of the major developments taking place in the world.
Sree Iyer: Yes indeed and remember viewers, we had talked about the Myanmar coup and the ASEAN countries who like to get this thing resolved. We now hear that Indonesia, Thailand, Vietnam, and Cambodia are urging for dialogue for a peaceful settlement. We will keep you informed on the progress on this.
In Europe, the Middle East, and Africa, the Hong Kong activists urge the EU not to sign the China investment deal. Do you think the EU is going to agree? After all, the EU is just a toothless tiger anyway.
Sridhar Chityala: EU agreed to do the deal, but they have not signed the deal as yet and mind you EU does not mean that some of those Nations will comply with the deal, for example, France may say, ‘okay you’ve done it, no problem. I’m not doing the deal with China.’ So there is this conflict as well. It remains to be seen. The UK passed a law where there are very specific and demonstratable instances of the failure of Human Rights, then the UK courts can rule let alone the government but even companies cannot do business. This one of the reasons why the UK is Brexit has an independent ability to make a decision rather than being reliant and tied to the EU model. To answer your question, it’s a 50/50 chance whether they will stall or whether they move forward.
Sree Iyer: Millions of websites went offline after a fire in one of the data centres of French cloud services company OVH cloud. Iran’s could QUD forces linked to the explosion outside of Israel Embassy in Delhi. This happened a few weeks ago. You may have known that there wasn’t much human damage, but I think there were some cars that were damaged. So maybe it was a car bomb, right?
Sridhar Chityala: That is not established as yet. Israel was allowed to be part of the investigations. Now they have concluded as to who were the people who were behind the attack. Now, they’re going to get to the specifics around what devices were used and how they were used. I think it is some kind of IED based on the initial evidence and exploded obviously through some of these remote control phones.
Sree Iyer: In markets, the Standard and Poor’s index is up more than 1% to hit the record high. NASDAQ has eyed 2.5% as bond yields stabilize and stimulus checks start going out. So you said and you’ve been mentioning it consistently that this year is going to be a gangbuster year for stock markets. What do you suggest, people should maximize their IRA and then use that money to go into the stock market. Would that be one advice? We are not saying which specific stock to buy, we’re just giving overall broad advice.
Sridhar Chityala: See, my broad advice is that, again compliance statement which is this is an opinion and you should consult your own financial advisors, you know, so, please don’t treat it as PGurus advice. It’s a general disposition that Sree Iyerji is asking and then, it’s part of the panel or expert team of PGurus, I’m giving an opinion. My view is that if you are not in stock markets this year, you will never be in stock markets any year. That is number one because of the amount of money that is in the system. There is a natural buoyancy when the economy grows the stock markets grow. Naturally, the economy cannot grow without the underlying corporate companies corporate profits growing. The economy is expected to grow between 5%-8%. This has not happened in the United States in recent memory. So naturally, there is a buoyancy towards that. Watch for the correlation between the rising rates the tech stocks. So you have a judicious mix between the growth and the value stocks. When the economy grows the value stocks are going to perform very well in the market. Now whenever you see these continued downward opportunities when the rates go down, rates go up and the tech stocks take a hit it is the opportunity to go and buy and exit when you see appropriate. So to answer your question, I have given you a micro and macro view. This is the year where the stocks are going to perform quite Stellar. The current target for S&P is around 4200s which gives an indication at least there is still another 10% left for that or 8% left in the oomph of the S&P to move forward if you are not already in.
Sree Iyer: The Dow Jones Industrial Average finished +188 points, the S&P was +40 points, the NASDAQ was +329 points. The US Treasury 10-year yield is 1.542%, the 30-year yield is 2.299%, crude is at 65 and Brent is at 69. Are the crude prices now stabilizing, sir? What are your thoughts on that?
Sridhar Chityala: The crude prices are stabilizing. There’s no doubt about it. And there is a good indication of what the demand will look like as more and more people come out and start using, we covered this again, we will not see that huge demand that typically is present when jet fuel is added because the still the air traffic has not increased but what you are seeing is purely the supply-demand issue being managed adequately as more people take to the roads.
Sree Iyer: That brings us to a close of today’s DGI. We are planning to have a special session over the weekend. Sridharji, why don’t you tell us a little bit about what your thoughts are on what the special session will be about?
Sridhar Chityala: I think the special session will focus on three important things. One is there is a lot of QUAD discussions that are going on at two levels; one is at the leadership level, which is the prime ministers and presidents of the four nations. Then there is a dialogue that is going on at a 2 plus 2, which is generally between the defence secretaries of State or the foreign ministers. So you have those two dialogues going on. You also potentially have a lead up to what is going to happen in the defence ministers dialogue with the defence secretaries dialogue between India and the United States. You also have an Alaska dialogue that is likely to happen and some trend lines around that. So you have a fair amount of discussions, which is a geostrategic topic. So we would like to make sure that we’re not going to wait for three days for people to get to know. So we’ll give an update on that. There’s also a lot of legislative stuff that is going on in the United States. We will probably talk a little bit about that. Then, I think we also have to give, we complete one year today – March 12th of covid. We need to give a little update as to how this has been traumatized or melodramatized notwithstanding the fact it caused a lot of disruptions. Disruptions have occurred due to strikes on various kinds of things. But take a look at 118 – 120 million people who have contracted, close to 92-93 million people have recovered. There are about 18-19 million people around the world who are still being actively treated. So on a relative scale of things, this is been a story where the human endeavour and the ability of human tolerance and the ability to toggle is something that we want to kind of cover and how the world came together and in less than one year has come up with almost four different vaccines to address the issue.
Sree Iyer: Thank you very much Sridharji and Namaskar. We’ll see you all on either Saturday or Sunday. We will give you an announcement just before that. And before I go, please don’t forget to subscribe also donate to our Channel and I must also tell you that after the 31st of March there will be no longer live online transmission on Twitter because Twitter is disconnecting the service that they used to use with Periscope. So you will still be able to watch our program Live on YouTube and Facebook. This is just a heads up and we had nothing to do with it nor are we being paralyzed. Thank you very much and Namaskar.
Sridhar Chityala: Namaskar and Have a wonderful day.