EP 105 – Biden to visit Texas on Friday, US new tech strategy excludes India, Trump Tax Troubles

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Sree Iyer: Namaskar and welcome to PGurus Channel. Today is the 24th of February, episode number 105 of Daily Global Insights. I am with Sridhar Chityalaji. Sridharji, namaskar and welcome to PGurus Channel, as always it’s a pleasure to have you, sir.

Sridhar Chityala: Namaskar and good morning to everybody and looking forward to another exciting day. Plenty of things happening around the world. So, lots of things to kind of catch up.

Sree Iyer: Yes, in the United States news Biden is going to be visiting Texas on Friday. What do you think is going to come out of it? Already, I think FEMA should be moving into the act by now. What are your thoughts, sir?

Sridhar Chityala: There is no need for any FEMA anybody to act, Texas has fixed its problems and basically, you know, the power grid has been restored, from February 21st of most of them are back. They have had some carbon monoxide deaths and people were affected and I think they are showing some compassion in terms of the electricity bills Etc up to be addressed as part of the state program. So, now they are trying to work on what should be the long-term remedial program besides weathering demand-supply management better with the reserves. The ability to service us some of the equipment because especially when you have this icy cold winter, then the driving becomes hazardous and especially in this, there is still overhead wiring in the United States. So, you know, the story is to go and adjust those junction boxes, which get frozen, you need roads to travel. So, some of these issues, I think they need to look ahead and think about you know, how to organize it better. I think they have a plan the working on that.

Sree Iyer: Former US police Capital Chief says that the rioters were very organized on January 6th, which kind of tends to blowhole in the argument that Trump was the one who incited them, if they were organized, that means it was pre-planned, isn’t it?

Sridhar Chityala: It was, it was. There’s a lot of evidence that is coming out which is to say it was pre-planned. And this was the video that was presented by Trump in defence of the impeachment proceedings, that some of these rioters were in the building well before, you know, Trump’s speech included. All the kind of evidence points out that they don’t want to mention whether you know, which particular specific groups but, there was enough evidence that they were organized, orchestrated, coordinated and they knew exactly what they were supposed to do. Whether there was collusion inside/outside, we don’t know, when the investigation is completed will get to know. So, it blows the theory that is why mainstream media is now going soft whereas it is being, you know debated in the halls of the political theatre.

Sree Iyer: And in other news, the Supreme Court of the United States has said that it will not stop New York state from accessing Trump’s taxes. Now, it seems almost like an interesting coincidence that whatever the New York State subpoenas, they all coincidentally happen to be Republicans. What are your thoughts, sir?

Sridhar Chityala:  Well, I think this is a way we are a blue state, we are deep blue and you know, just we don’t need to go too far. Andrew Cuomo was asked to be stepped out. He did not step down. They asked for an investigation to be done. No investigation was done. Here is a man who is the governor of the state and his own mayor in New York, basically, said that this guy is behaviour is not acceptable and he should.  Over 50% of the deaths or at least somewhere nearby suppressed and there’s no investigation. There’s no step-down. But, guess what? We’re going to flog Mr. Trump to help, if he lands, we’ll arrest him, if he comes will do this. Yeah fine, you know, this is no problem, you know, but, you want my taxes to go ahead and do it. Basically, Trump filed, you know, I don’t want my private affairs to be torn apart by the mainstream media. SCOTUS has said sorry you have to respond to the subpoena and tax should be put out. So coming to your point which is you know, some of the viewers had stated. Oh, well your Trump’s support, well we support too because the reason is where take a contrarian position. Does anybody say there are any of the state Governors need to be kind of Democratic State Mayors, Governors have to be when we have had riots in Minnesota? We have had riots in Washington DC, we have had riots in Seattle. In fact, we have pandemonium in Seattle. We have had the riots in Portland. We also had incidents in California. In California, there is a very big issue going on with the governor. We can spend the next one month in this Daily Global Insight only talking about the problems that the Democratic ruled Governors and the states have on the local Administration, but I think we covered one point a 281 million dollars diverted from covid funds, so, we talked about it. So, my view is you hear that but we need Unity on the other side too. So, therefore we are giving the other side without opposition, there is no meaningful mechanism.

Sree Iyer: So, a few confirmations by the Senate Tom Vilsack as the agriculture secretary. Linda Thomas-Greenfield has been confirmed as the Un Ambassador and we also have Merrick Garland, the questioning is still going on, on the attorney general and there are some questions that perhaps, are not exactly along expected lines. Do you foresee some controversies that might crop up during, if, he were to become the Attorney General, Sir?

Sridhar Chityala: Well, I clearly see some issues because the DOJ is often littered with problems. So, for example, there is the Hunter Biden plus that Russia investigation is going on. He was asked about it. He says he’s not speaking. Whether he’s going to throw cold water under it. We don’t know. John Durham, who was the deputy, appointed as the acting to continue by the previous Attorney General, whether he’s going to continue was asked, he made no comments. He was asked to comment on gun control and he said he’s going to support it. He was asked about the border issue. He was quite evasive on the border issue in terms of whether you treat it as a criminal or is a non-criminal offence that only DOJ can do whatever these people frame that aspect of the investigation goes to the Department of Justice.

Sree Iyer: and to round out the US News David Perdue will not run for Senate in 2022 from Georgia, which means that somebody else perhaps is going to throw his/her act in the ring to challenge Warnock. Remember that this was a seat that was going to be up for the election in 2022. So it’s possible that should a republican win at that time then again, the balance in Senate will tilt towards the Republican. So, we will have to wait and see. Is there anything that you’d like to add on that, sir?

Sridhar Chityala:  A very surprising decision, I think he is called it personal rather than political. So, I am very surprised, it’s just come out of nowhere.

Sree Iyer: And in global news, we have a lot to cover, the US and its allies are planning on building a China free Tech Supply Chain, especially for chip manufacturing, Battery Technology, Rare Earth Industries and so on and we have to wait and see what going to happen. The interesting thing is the invitees that were invited to talk about this partnership South Korea, Japan, Taiwan even Australia was invited the notable Omission was India, I wonder, why they left India out?

Sridhar Chityala:  To give you a direct and straight answer, I think you’ll continue to see the Biden Administration cold-shouldering India. Right throughout the pre-election phase, I had talked about you know, what you call the lukewarm response that India is going to receive while driving up the rhetoric around Kamala Harris being an Indian and you’re going to see Kamala Harris is as distinct in Indian as one can think of as one can be like Gordon Chang who comments about China, you know, the president the CCP regime,  so, therefore he’s not. So, the story is this is what you’re going to witness. If you see the composition and also a lot of campaigning that went on, you know, the hand of Pakistan is very very strong and they are very deeply aligned with the Biden Administration. So, all these issues that India has witnessed Article 35A, Article 370, CAA all these issues that have been thrown up are as a result of specific lobby working against the Indian interest. Even the indo-pacific kind of judiciously mixing between Asia-Pacific, Indian-Pacific, Asia-Pacific, India-Pacific. Even on the quad forget this partnership, we get to this partnership in a second. They want to have an outreach beyond the Indian Ocean deep into the Indian Ocean going into Africa. You remember that territory was supposed to be the responsibility of India and commit resources for that purpose. So you’re going to see some of these things crop up again and again. Now to answer your specific question, which is on as it relates to this matter when you take it back to the Trump Administration, Trump said that to replace Huawei 5G technology, he had even invited Rio to the United States to set up research development and eventually the manufacturing but, capital would be provided by the US. AI would leverage India’s capabilities in some things like Robotics and so on. So, none of these domains you see India is an ally in Biden’s. In fact, India has been silent in any of the briefings and reports that you see that it is a lukewarm response that India has received. So I think the writing is very clearly on the wall as far as the Biden India goes.  Clearly, you know, Mr. Bill Burns or Kurt Campbell or any of these people barring the You Know Jack Sullivan, they’re not the great friends of particularly, the present BJP kind of administration. So, India has to cut its own kind of cake and then make things to move forward.

Sree Iyer: And in other news, the falling water levels in the Mekong River is riling up the neighbours downstream. And in fact, we had done a detailed program about this about the plans of China. China’s newly constructed Jinghong dam cuts flow bound for Thailand, Cambodia, Laos and Vietnam and they are all very unhappy about it. You have been listening to us say about this and Sridharji, is it going to be more and more that this kind of discontentment that’s going to be coming up?

Sridhar Chityala: Well, the reasons are very simple, which is you are entering the Agro Rice-Paddy cultivation is the biggest part of that specific Delta. So if there is no water Rice-Paddy is dependent on water, not only the livelihood but also there You know habitat is going to be affected because of this and I think they’re beginning to detect very low water flows downstream into some of these countries and so they are, you know riling up the issue. I think the second there is also, you know, they’re big fisheries and you know other water-related activities, which is also impacted as a result. So I think that’s why this issue has come back to the surface once again.

Sree Iyer: We should remember that these are all Sanskrit names. The Mekong was Ma Ganga and Irrawaddy is Airavati and Airavati has something to do with Airavatam, the elephant of Lord Indra of Heaven. Anyway, so interesting stuff there. Let’s move on to Iran. Iran has officially imposed restrictions on the UN inspecting its nuclear facilities which are indicating that they’re probably in an advanced state of enrichment. What are your thoughts, sir?

Sridhar Chityala: I think there was a strategic blunder committed by Biden. So Biden felt that this has been again the same Obama-Biden team, so the story is that they feel that Iran can be brought to the table in only one way, first give them the concession, they will obey and then you can begin the negotiation. So what Iran is saying is bring me to the discussion table and then with no strings attached and then we will begin the process. They are very badly affected by the other sanctions. Now the rest of the World Community is not in alignment with Biden which is without them coming up with certain preconditions being met, the negotiation should not commence. So he’s gone down a slippery path. So Iran is now taking a hard stand, they are saying no IAEA inspections, no United Nations inspections. I got my sanctions I’m going to do what I want to do. Now if in the Trump-era every time there was this kind of an issue, the Trump era responded with action. One important data point here is in the last one week three times you have seen these Iranian guards or Iranian militia have fired rockets into Iraq at the green zone. One of them was yesterday, this is the third attack within one week. So they’re not stopping and they’re not listening and there have been rather meek protests from Biden. No action has been initiated notwithstanding that a couple of private servicemen died and there have also been some contractors who have died by virtue of these three attacks. So it is giving them more and more of hot posturing and because Biden has conceded. But a Biden has conceded because there’s a whole swag of constituents who have supported him in the elections. Also, we talked about John Kelly and Robert Malley doing back door negotiations undermining Trump’s negotiations in 2019. So this a lot of undercurrents, where it is going to go is an important geopolitical issue because Israel is not going to keep quiet and not allow it to be an existential threat.

Sree Iyer: Yes indeed and I think Israel is already started to chart out its own policy towards Iran. In another news about Iran, South Korea denies that it had a deal to release funds to Iran frozen by the US sanctions. Remember viewers we have talked about two ships carrying crude being stopped on high seas. What is the correct here, sir? Do you think that there is some relationship between the two events?

Sridhar Chityala: The South Korean Merchant vessel was actually picked off the coast of Oman. If you recall, we had presented that scenario. At that point in time, there was speculation that the reason why this ship has picked up was that there was some to $1.5 or 2 billion was frozen in South Korean banks for the oil supply. So it was under the pretension. So when I now look back and this statement propping up today, which effectively means that there was some speculation that the Koreans may release the money, they got to protect their crew members. So they may pay the ransom or they may release the funds to get the ship back. So that’s the connection.

Sree Iyer: India continues to expand defence manufacturing capabilities and infrastructure purposes. There is an interesting development. Turkey is going to transfer technology to Vizag Shipyard to build fleet support vessels. So this is one of those things where one raises an eyebrow, ‘wow, turkey is transferring technology to India. So what are your thoughts on this?

Sridhar Chityala: I’m just as amazed. There are two things that caught my attention and as far as the regional business is concerned. China embracing its arms and saying, Mr Xi Jinping, I will be attending the BRICS summit and I have no objection to BRICS being hosted in India this year. We welcome India hosting it and I’ll be there. I’ve visited India before. So, China is very clever seizing the opportunity to make its entry back.

Sree Iyer: Nepal’s top court has ordered the reinstatement of the parliament dealing a political blow to KP Sharma Oli. This is actually I think good news because I think that faith in democracy in Nepal has been restored and I think the parliament will probably choose the next prime minister, anything to add to that, sir?

Sridhar Chityala: It’s good because this is one of the vulnerable weak points in terms of China’s profuse footprint and also this is one of the things that received a lot of controversies and honey trapping whether KP Oli was honey-trapped and therefore he was compromised and the Nepalese did not like some of the land being occupied by the Chinese and when the villagers went they were threatened and asked to go back and I don’t think which went very well with the Nepalese. There has also been some internal trouble within the communist party which was unified to some extent or managed by China remotely or close proximity. So it’s good news that this agenda is reset but I think India’s strategic partner in Nepal and they will be able to have the discussions going.

Sree Iyer: On covid-19 Johnson & Johnson is confident of supplying 20 million shots by the end of March. And here’s another interesting news from Johnson & Johnson. They have applied for FDA approval and they think that they will be able to get 100 single-shot vaccines by the end of June 2021. If it’s a single-shot vaccine and even if it is a little less effective than the double shot,  that is a welcome step, isn’t it?

Sridhar Chityala: It is a welcome step. I think one of the challenges that the United States has is the supply because there is asymmetric supply to the demand because the United States this is probably vastly affected in terms of the active cases that need to be addressed or treated plus there is an addressable unit which is long. It’s only a matter of time before J&J, AstraZeneca, Pfizer, Moderna there’s also Eli Lilly they will all be going into this vaccine phase because the projected covid vaccines for the United States in the next 12 to 18 months in terms of supply is about 5.13 or 5.3 billion vaccines will be produced making them the largest, India is the second with around 3.2 billion and then, of course, it tapers off into Britain, Russia and China as the largest producers in the world. So it’s a matter of time as we go down this path.

Sree Iyer: Mexican president Obrador thinks that Mexico is doing better than the US at combating covid. Is it because of their food habits, sir?

Sridhar Chityala: I think it’s because of the food, because of the weather, it’s also because of the herd immunity, It also has possibly something to do a little bit of the demographics. They have a little younger population relative to the United States. Clearly, food is one of the reasons. One of the lessons of the covid is the food habits and the herbal stuff that is mixed within the food plays a significant part in giving the self immunity to combat this.

Sree Iyer: In markets, Bitcoin continues to lose value based on comments from Janet Yellen and Elon Musk and others. More importantly, Powell’s statement that inflation is under control has actually buoyed the markets today. Isn’t it sir?

Sridhar Chityala: It is. He made three profound statements. One is, he said that inflation is still soft. He also felt that the economic outlook is still slightly uncertain. And so, therefore, there are no impending inflation tailwinds that are to address any monetary policy. He also feels that from the FED’s point of view both inflation and unemployment, they don’t see them in the near horizon as a factor and they are within the band of the FED from a rate high point of view, but he was very silent on the recent movement in bond prices. I think yesterday or the day before yesterday, we put up a couple of charts. So we said the same thing yesterday. The investor confidence dipped basically because, if you take a look at the 10-year bond deeds, they are around the same price exactly one year ago. It was only in April, on there-pandemic or just the pandemic getting out in the open, the yields dipped to 0.64 progressively and stayed low for a period of time. So I think he has addressed that issue in his statement or in his presentation or in his briefing to the house or Congress.

Sree Iyer: We will wrap this up with the last news on PPP, President Biden has expanded the PPP support for people who are self-employed also, but in this inclusion, he has also included ex-felons, non-US citizens and other small businesses. What are your thoughts on this? I mean as a self-employed person I did not see any benefit out of PPP and now I don’t know if it’s going to make my case easier. I have to go and look at the rules and regulations. Certainly, including ex-felons, that’s a little unusual, isn’t it?

Sridhar Chityala: Well, I think that if you are not covered then there’s a problem because you’re part of the less than 20 people who are being given the first priority with a specific, you must check with your bank, there’s a time window for this so you have to go and get it, and make sure that you get it. Now, only when this time window passes and the residual part of it will be again allocated back to those 20 – 300. So this is for SME. SME is basically those who have 20 employees and less, and then the ME is those who are between 20 and 300. And once you get past then you have corporate, mid-corporate, corporate and so on. So I think that you are well within the realms and band sir. You have to run to your bank Wells Fargo or Bank of America and make your application and make sure that your branch manager is canvassing for you.

Sree Iyer: Well, I’ll try my luck and I’ll keep you guys posted as to how it played out. Thank you very much Sridharji. As always, a pleasure to have you. Viewers, we are now beginning to pick up steam again in our drive to add more subscribers. Please do subscribe to our Channel and also donate to our cause and you can also help us by becoming a member of our Channel. Being a member gives you additional benefits, which will be disclosed as things go along and thank you very much once again for listening and we’ll be back tomorrow same time. Namaskar.

Sridhar Chityala: Namaskar and have a wonderful day.