Sree Iyer: Good Morning and Namaskar. Today is April 22, 2021, and this is episode number 147 of Daily Global Insights with Sri and Sree. How are you feeling, SridharJi?
Sridhar Chityala: I’m doing very good sir. And there are no complaints. How about yourself after your doze two?
Sree Iyer: Yes, after doze two. It flattened me for a day, but I’m back up and running and everything. Back in hunky-dory sir, and let’s get going with episode 147. Here are the main points.
- EU Regulator backs the J & J vaccine, as benefits Outweigh Risks
- FPI stock holdings in India soars $105 Billion in Sept – March and a whopping $555 Billion in 2020-21
- Phase 3 Trial: COVAXIN Demonstrates 100% Efficacy against severe COVID 19 and overall Efficacy 78%
- Biden tries New bipartisan sit down to push the $2.25 Infrastructure plan, and that he is prepared to compromise
- Australia tears up the Belt and Road Initiative with Beijing
A lot of news happening, sir, your thoughts on how things are headed today, sir?
Sridhar Chityala: I think the most important news in the United States is around the Derek Chauving verdict the world and the United States has been watching and we had the verdict day before yesterday. Then, right from the day before yesterday’s to yesterday, there is a lot of calm. Around the global the same situation, which is about Russia as well as China and all the issues that stem from it by way of confrontation. Markets were down for two days, markets that back up yesterday and the future is going to grow so we are off to a good beginning, sir.
Sree Iyer: In Derek Chauvin Verdict: He has been found guilty of all three charges stemming from murder. His bail has been denied and taken back and he has been taken back into custody. There’s a relief and hope that there is closure and no further rioting will take place. Biden calls Chauvin verdict a step forward but it is not enough. We cannot stop here. Pelosi slammed after thanking George Floyd for sacrificing his life for justice, perhaps a tonal quality of the message wasn’t right. Maxine water dings GOP after censure vote fails, time to put Waters to pastures says Joseph curl. AOC urges Democrats to change society’s structure after Chauvin trial, rips the police budget. Department of Justice launches a civil investigation into Minneapolis policing. Sir, taken in the whole this thing about police budget. I thought the police budget was already underserved. What are your thoughts, sir?
Sridhar Chityala: That’s not the view of the Progressive Democrats who are ruling the United States today. They are talking about defunding the police that means defunding further the budget. They also want to introduce varying norms by which policing is done and also investigations are carried out all this seems to be stemming from this intense distrust that seems to be prevailing amongst a segment of the members of the Progressive and the Democratic party versus polices’ establishment. We have seen this in several cities around the country or several blue cities around the country where you have seen in recent times violence startup and you can see all the statements from Biden to Harris to Pelosi to AOC to Maxine Waters, you can see the statements coming up which is to say that it is everything is the rationale and everything is fundamental. The fact not even this case is complete because there is an appeals process. I don’t know whether all the three verdicts would be accepted and this going to be challenged in any appeals process. The Department of Justice has already launched an investigation, not on the policing side of it. So the general sense amongst the media, as well as the centrist, says well as the right is that there seems to be subtle influence and pressure being applied on the police in terms of withdrawing their methods by which they address the law and order situation.
Sree Iyer: Sir, I have a very basic question and this is not directed to you, sir. But, at these progressives, who want to defund the police. Fine, so you defund the police so there is no police. What happens when there is an accident and you want a neutral party to certify who’s at fault who’s going to be discharging that function? What happens if there is theft out of your house and you need someone to follow but find out who stole it? What happens if there is any other kind of function that the police is doing today. I mean if you feel you know not well while you are driving on the road you pull over within 5 minutes usually some police person is coming to check on you to see how you’re doing. So I think this is very irresponsible. I can understand somebody saying this in the Heat of the Moment but for congressmen and women to spout this kind of venom is just not acceptable the congresswoman may have enjoyed the majority of one section of the community, but when they become congressman and congresswomen they represent the entire multitude and I think this is where they are going wrong in my opinion. I think I tend to rant on this point.
Sridhar Chityala: I agree with your observation, especially the last point, which is namely you may be coming from a specific ethnographic demographic segment of a community from where you take a but you are elected as the Congressman or Congresswoman representing that Universe for the country not just merely for a constituent element. This seems to have been thrown back into the kitchen sink and most of them are taking this prejudicial view. I agree with you. I agree with your assessment and all the questions that you’re raising.
Sree Iyer: Thank you, sir, and Biden Administration offers grants to teach children 1619 project inherent racism central to the United States, I mean this is something that should have been done a long time ago, but I think it is better late than never your thoughts, sir.
Sridhar Chityala: Sir, I differ with you on this, the 1619 project is based on the theory that the whole process is central to American racism and development is slavery. This project was a series by New York Times. The New York Times was awarded the Pulitzer Award for this specific Series. Many Ivy League and others even centrist professors have condemned this project and called it a bogus history. This is extremely prejudiced in ratio and it is to shift the views of our people in a specific way. There’s a 1 billion dollars dedicated to this specific project for what you call the K-12 schools will completely change the course of the history and by which I mean in a prejudicial manner, nobody is saying that there was no slavery. Nobody is saying that there was no but, that’s not the central thing with which the United States was built as an architecture.
Sree Iyer: Well, there you go. We do have some disagreements sometimes. Arizona governor Ducey declares an emergency and orders National Guard to order to address Law and Order. See again, this is bolting the farm after the horses’ left it. I mean, this is now the third month isn’t it, sir? What were they doing for these three months?
Sridhar Chityala: Well, I think when the Law and Order beaches, we have covered this ICE has been removed, which used to be the enforcement arm. Customs and Border Patrol role has been made redundant. They have deprived them of resources. When you have had, you know, a hundred people coming in they could deal with it. When it reaches 1500 people, they have no, but when it goes from 1500 to 5,000 people. They have no capability. So what is happening in Arizona has a major crisis. They have no choice, but to call the National Guard, at least to prevent the future.
Sree Iyer: Not an existential threat intelligence agencies challenge Biden climate change alarmism. Again, your thoughts, sir. I don’t have anything to say, but please go ahead, sir.
Sridhar Chityala: No, this is coming from Biden nominee Avril Haines, she is saying this is not correct. And in fact, Haines is saying that her intelligent people or she has oversight as you know for all the agencies. And you know, she’s nominated and she was one of the first set of people nominated and got her position approved in the Senate. She’s saying that please don’t indulge in this we don’t see any imminent threat. Please do not divert the attention of the army from very strategic matters that confront us and putting the effort into the climate issue.
Sree Iyer: In other news, Biden tries New Bipartisan Sit down to push the $2.25 Infrastructure plan, and that he is prepared to compromise. So I think the Democrats have short down at least the senators have short down the infrastructure plan of the Republicans and now I think people are getting together to talk about what needs to be in the infrastructure plan, sir?
Sridhar Chityala: Indeed sir, the Republicans are proposing, they plan to offer something between a 600 to a trillion-dollar plan that comprises of the infrastructure elements rather than all the other non-sense including funding of some of these foreign overseas projects. Let us see how does that pan out. I think the core issue seems to be the source of funding which is around taxation, right the whole source of funding is around corporate taxation and that is not just going down well with anybody.
Sree Iyer: Of course and the next in Works American Families plan. This is the next plan in work again other one trillion dollar spending including 500 billion tax credits. Is this for companies corporates or is it for others?
Sridhar Chityala: No, this is another social welfare program. The social welfare program now today as part of the covid, if you remember the child tax credits were offered against which 250 per month for those with greater than 7 but or lesser than 17 years and those who are less than 6, 300 dollars per month. So they want to normalize this and harmonize this as part of your regular affair to be given that is the tax credits. They want to further expand the child care support as part of this program. Plus, they also want to fund paid leave to supplemented to parents who need to mind the children all this is part of this 1 trillion dollars plan. What is most disconcerting? And what is most concerning? In most of these programs is often find the money does not reach the beneficiary and money is you know, swindled up somewhere in the system. And that is the reason why some of the aggrieved communities over the years have remained in the per capita lower in the straddle relative to all the programs that have been talked about but never reached the people.
Sree Iyer: Very unfortunate and next is on the national debt. Sir, this is a very interesting revelation, we’re saying that national debt exceeds 123 trillion and not 28 trillion and includes unfunded Medicare of 55 trillion and the Social Security of 41 trillion. Wow!!! Where did these people hide these numbers?
Sridhar Chityala: The treasury has a very interesting method by which it has the budgets and accounting. It does the budgets and accounting based on a principle that entitlements and funding are based on incurred expenses rather than to be incurred cost. So in other words, for example, if I have in my account, which is my Social Security account if I have let us say A 100,000 dollars in balance and the obligations of my social security by the government is $300,000. There is no way by which they can fund the gap of 200,000. So the question comes up. How are you funding it? So all these things are like a flush all the new money that is coming in of somebody else’s they are paying out this obligations. So therefore per person, the outstanding debt is close to 8,000 dollars when you include these two numbers and divide by the population. So when you look to forecast the money out, you have 96 trillion dollars of unfunded Medicare and Social Security. So this is the reason why you hear in the United States if you hear from outside both Social Security as well as Medicare is broke is bankrupt. This is the reason.
Sree Iyer: In Global News, EU readies Climate deal just ahead of Biden Summit. Biden expected to pledge cuts by 50% by 2030, your thoughts, sir.
Sridhar Chityala: Well, it seems like again, you know, there is an unachievable goal. It seems to be a pet project of the progressives. This is an astronomical number that he is committing as the Republicans and the even intelligence networks of agencies of Biden Administration is saying this is only going to help China’s. I’m going to help the United States.
Sree Iyer: German opposition calls for boycotting of Winter Olympics. This is beginning to gather momentum now, where many parties are beginning to ask for boycotting the Winter Olympics, sir.
Sridhar Chityala: Yes, China Olympics is now the favourite topic amongst the left and the centre. So, Germany as you probably know is part of the EU and the Biden Coalition, so everybody is now up on the ban and namely that the Winter Olympics needs to be boycotted.
Sree Iyer: And the grave doubts being expressed by a US general as to whether Taliban can be trusted. I mean, this is something that’s known. Taliban cannot be trusted. It is an obvious thing yet America is still going ahead and going to withdraw the troops. So this is getting the stage for a civil war in Afghanistan. So that’s how I see it. What are your thoughts?
Sridhar Chityala: I agree. I agree. The fact that from CENTCOM, Middle East head Frank McKenzie who has also responsibility for Afghanistan is saying, are you guys thinking before you make 9/11 as the final cut off date, the 9/11 itself is an issue, but they are stated Taliban has never ever shed its militancy. It has never shed its linkages to Al Qaeda and ISIS troops under those circumstances. How do you believe the transform itself and come mainstream while it continues to fight even today the people who are fighting the Afgan security forces are Taliban.
Sree Iyer: And Ukraine say is that it will soon have 120,000 Russian troops across its border and Russia President addresses the nation on Wednesday as mass Navalny protests are planned and wants to West crossing the red line. So I think maybe there is some relationship between what Russia is trying to do in Ukraine and all these protests of wanting to free Navalny because evidently, he’s getting weaker by the day. What are your thoughts, sir?
Sridhar Chityala: The United States issues ultimatum to Russia. Russia basically says all these protests are instigated by you guys who are funding this protest. Otherwise, we are a peaceful country; we never had that one part. In the second part you are stirring up our borders and you are sending ships and you are threatening us with potential battle while we are trying to manage our own matters in our country. So, therefore, he is effectively saying that you are creating problems both internally and externally around my perimeter, don’t try and mess around with me. I have my own red line and I shall not allow that red line to be crossed. I have more trust and more faith in Vladimir Putin implementing his Red Line strategy than the rest.
Sree Iyer: Chinese president Xi takes a swipe at the US unilateralism in his speech at the China Boao economic forum. So, can you expand a little bit on this economic forum? Was it like a is it an annual thing, the significance of it?
Sridhar Chityala: It is a biannual forum where he broadly speaks about what he has done what he plans ahead. They have a military forum, then they have a political forum, and they have an economic forum. In this economic forum, he has talked about the policies, the way forward. If you remember, the Belt Road initiative was discussed 10 years ago in the same forum. Some of the changes that they are doing around this tech stuff, and governance, etc are all discussed in this forum. So he is speaking about the economic growth and in that he brought up the US topic and subtly introduced unilateralism.
I’m using this to also make one other point. They have suddenly gone quiet in Taiwan in the past three days. The reason being, apparently, they must have been some kind of a message exchange between Kerry and the CCP membership, whosoever they are, because he was in China for the forum. They want to use the climate summit as a tool, for the climate summit Xi has stated that he would be cooperative and supportive. They want to open that dialogue with the United States rather than the hysterical one that took place in Alaska. So all this stuff that is going on is some kind of backroom manoeuvre that is happening with the intent that they start talking once again.
Sree Iyer: Japan targets ASEAN for the first oil sharing bill. Can you please expand on this, sir? What is the oil sharing deal that we talking about?
Sridhar Chityala: The South China Sea is the passage for a massive amount of resources. The Middle East is one of the biggest players for the ASEAN nations. In the event of a war, Japan has a reserve for 200 days of oil. It can sustain with no new ships coming in with fresh supplies through the South China Sea. We have covered extensively in the South China Sea why it is a passage of energy security not just for China but also for the entire ASEAN nations. So what is trying to do is find the best way to manage the supply chain? So in other words, can they start using Philipinnes, Vietnam as supply points so that in the event of a war and in the event of a blockade that they have a mechanism by which they can share the resources.
Sree Iyer: Indonesian Military says that a submarine is missing with 53 people on board. Wow, no dull days in the South China Sea.
Sridhar Chaityala: Not a singlr dull day. This is off Bali Coast just about 60 kilometres. It is an old submarine, I think a fleet of eight submarines or five submarines. Exercises were going on and then they suddenly lost contact at 2,300 feet below. What exactly caused it, not sure. We’ll have more news on it, as the story further develops, but it’s a big incident for them.
Sree Iyer: Yes indeed. The Tokyo police are investigating cyberattacks on about 200 Japanese companies and research organizations. This is believed to be a group that is having links with the Chinese military. This is certainly again one of those hacking attempts by China to break into systems in Japan, sir.
Sridhar Chityala: Indeed. I think there’s a consistent pattern if you can understand. They did that in India, now, they have done that in Japan. So this industrial espionage as well as the security espionage seems to be the underpinning principles of the Chinese model. So if you cannot win a war then you try to steal information or you simulate cyber attacks as an instrument of issuing threats to the nations.
Similarly, in the United States, the breaking news is that there is a flaw in the VPN – Virtual Private Network that is used by Defence establishments. They believe that the breach has been used yesterday by a group in Utah called Imanti, which is reported both on defence and new defence research activities. The espionage was going on using this VPN network leak. More to come again on this. So here is a consistent pattern around the world of the Chinese infiltration through the Cyber. This type of espionage used to be Russian, now, it has come to the Chinese.
Sree Iyer: Australia tears up the Belt and Road initiative with Beijing. Sir, apart from the fact that they are getting out of the BRI when something like this happens what happens in the back end, sir? For example, the departments that are working towards setting the stage, all these people who are assigned to this job, go back to the original thing. How does it play out at the lower levels?
Sridhar Chityala: Two or three things here, one is Australia is one of the largest trading partners of China. It replaced Japan as a trading partner. As a part of that relationship, China has been encouraging Australia to join the Belt and Road Initiative. The only way of joining the Belt and Road Initiative as far as China is concerned is through the sea, the Indo-Pacific seas. So Australia is supposed to be one of the people who will be plugging in and in the process, they provide all the logistical value chain in terms of the imports that China makes and the exports that the Chinese do to be part of the Belt and Road Initiative and commit a minimum amount of trade flow-in through that network following the commercial rules and principles. So what happens is one is the business framework, second is the operational framework that goes on. The fact that Australia has torn up basically says if you need something then I’ll give it to you but I will determine how I deliver it to you and it will not be in Belt and Road. That’s the commercialization operationalization process that we are talking about here that is prevalent today. So we are not changing those rules is what they saying.
Sree Iyer: In Indian news, the Foreign Portfolio Investment stock holdings in India have soared to 105 billion in September to March period and is now a whopping 555 billion in 2021. That’s impressive news, sir. The world trusts India.
Sridhar Chityala: We’ve been giving these big-big numbers but the mainstream media seems totally oblivious or blind to data. One of the questions that are asked is how you drive India’s economy? There are three principles one is Investments, the second is the goods produced and the third is consumption. These are the three things that drive the economy of a nation. So you can see that much of the recapitalization of the companies is through companies coming from overseas and making investments into those corporations. 555 billion is a significant number. It’s almost equal to 18% of the Indian economy on annual basis. We’ve got a 3 trillion economy, 555 billion is, you can calculate, it is about 18%. It’s a very significant number as a capital flowing into the country. As you rightly pointed out, it’s a very positive sentiment. We have again and again through Daily Global Insights as well as through programs with some of the leading experts like Mohan we are pointed out that as India transcends from a 3-5 trillion you are adding 2 trillion to our GDP value that, naturally, is almost doubling in economic size. So there is a natural buoyancy and many people in the world want to participate in that buoyant economic growth. That’s why capital is flowing in.
Sree Iyer: In Phase 3 trial of Covaxin, it demonstrates a 100% efficacy against severe covid-19 and the overall efficacy of 78%. This is a feather in the cap for Bharat Biotech, sir.
Sridhar Chityala: It’s a huge win. I think this is great news for India. India demonstrating Covaxin to be a fairly effective vaccine with very minimal side effects is a very very positive endorsement.
Sree Iyer: It is only 0.04% are re-infected after the second dose of Covaxin. The Covaxin also neutralizes the multiple variants of the covid-19 virus including the new double mutant strain. So Covaxin is certainly at the head in terms of the effective vaccine, sir.
Sridhar Chityala: It is, it is. I think Covaxin and AstraZeneca were critiqued around the world. We talked about AstraZeneca, in Britain they had some initial hiccups and they continued to use them. Obviously, the natural Genesis is from Britain. much of Europe discontinued. The Covishield version, which is extensively in India is a variant that they have adapted to Indians. I think I also mention to you that Australia uses the Astra AstraZeneca in a varied form but manufactured locally, I think by Abbott Laboratories. So these are the three countries which have adapted and are using it. I don’t know whether it has got to do with any medical stuff or whether it is the way the vaccine has been titrated in use that seems to be fairly effective. So again, it’s very positive news.
Sree Iyer: Tesla ramps up hiring for top positions in India ahead of rolling out its electric cars.
Sridhar Chityala: Tesla is in India. So therefore Elon Musk wants to have more, electronic vehicles and electronic vehicle points. He’s is certainly moving towards India in terms of expanding his footprint and the base. He probably has already done it, California is full of EV and EV Outlet. These EVs are catching up all over Asia, sir.
Sree Iyer: One of the major traffic routes in California is between the Bay Area, which is around San Francisco and San Jose, and Los Angeles. The distance between them depending on where you start and where you end is around 400 miles and even the biggest electric storage car of Tesla needs one charge in between these. So what he has done is there is this big Highway called Interstate 5, so they have got these charging stations three or four places now, and it takes about half an hour to recharge. You can go and park there, recharge. In fact, you can figure out where you’re going to park because there is up-to-date information available online. So as you are driving we can know where you will be able to get a spot because that’s the other problem. You need to be able to get a spot to charge. So interesting stuff. the reason I am bringing this up is I’m going to be going to Southern California next month and I will talk all about it when I come back. It will be an interesting story.
On global covid update, EU agency: Possible links found between J&J vaccine and unusual blood clot. So it looks like they’ve got to the bottom of it and the EU regulator now says is J&J can be continued because the benefits outweigh the risks. Your thoughts, sir.
Sridhar Chityala: Well, we have been talking about this we’ve been proved right again. We have been saying that the benefits outweigh the risks. benefits. It’s good that science works and scientists want to use science as a tool. 6 in 6 million or 7 million is inadequate for them, no problem, they can do further research and endorse it. Having said that, there’s one more report that’s come out which is the FTA has found in the United States that the J&J manufacturing facilities has still some issues around compliance and so on. But J&J has a vaccine. Because it has manufacturing issues in the United States you cannot stop it from getting used in India, Europe, and Asia. Europe and Asia very badly need vaccines. So J&J would be a very big booster.
Sree Iyer: There is no US confirmation on the lifting of the ban on the export of vaccine raw material. Are you alluding to the one where the Serum Institute has said that the US is not shipping the raw material? Is it the one, sir?
Sridhar Chityala: Not only this, but I think generally people want to manufacture locally using licensing the capabilities, but getting Pfizer license alone is not enough if the US bans exporting of vaccine raw materials. Here, I’m making a broad statement that unless the export ban is lifted, the US is not supplying anything overseas by way of vaccines. smaller countries are doing, so I think this is the point that they got to let go because United States today has more than 54% of the people vaccinated.
Sree Iyer: Pfizer wanted to negotiate with Suga and not vaccine Czar Kono. This is interesting Japanese politics.
Sridhar Chityala: It is interesting Pfizer politics, which is effective to state that I am the big man. Kono may be insisting on certain conditions because he’s a scientist and he is a vaccine Czar. He may have given her time to Pfizer in the prior. So basically this is the reason why Suga’s demand was not honoured.
Sree Iyer: Bharat Biotech ramps up the manufacturing capacity of Covaxin to 700 million doses per annum, indigenous has the production of key raw material. I think that is the most important thing that if they have indigenized the raw material then they are not dependent on any country for importing raw materials.
Sridhar Chityala: Indeed. I think that Covaxin being domestic I would say that this is likely to be achieved within the context.
Sree Iyer: In markets, all three indices fell for the second day yesterday, but they have come back again today. So we have a bounce-back 250 down, and 300 up. Now you are looking at rate sliding and crypto marginally up, overall what happened? Because yesterday we didn’t have the show. So, why did it go down? Why has it come back up and what is happening with cryptos and oil, sir?
Sridhar Chityala: First, on the markets. J&J vaccine and sudden shortage, there was this perception whether the recovery would be delayed. That’s one reason. The second reason is this battle going on as capital gets relocated and prioritize between value stocks versus the growth stocks. So the growth stocks like the tech and so on took an impact. The market is back on the momentum today not just on the earning numbers, but there is a belief that the vaccine issue would be resolved and the recovery, after all, may not be delayed. These are the two reasons as to why the markets are back up in terms of 300 points.
As far as crypto is concerned, it will enable vacillate depending on how the markets perform. It is like an H-currency. So that’s the thing. As far as the rates are concerned, I think we have said that two-three days ago, the theory of Dr Jerome Powell ‘I’m not going to stop and I’ll continue to push forward. I may even push the base inflation rate to 2.25%. I’m not going to lift the rates.
So the vigilantism losing the game. So the markets are sliding back recognizing that ‘Hats-off to him’. 30-years is at 2.25%, it is an unbelievable rate.
As far as the oil concerned that there were some supply issues in the Louisiana-Gulf region, that seem to have been addressed. The other thing is that the OPEC countries are prepared to release additional oil, based on demand. Then you have the unknown Godzilla in the room – Iran, which can release a significant amount of oil. So there is a fear that if a deal is struck, not fear but good positive thinking that if a deal is struck between Iran and the rest of the world, the Iranian oil will flow which only means the prices will come down.
Sree Iyer: Yes, indeed and let’s see how it plays out. With that, our News Bulletin comes to an end, and thank you very much for watching and do subscribe to our Channel. Sridharji, as always a pleasure to have you on our Channel and we’ll be back tomorrow. Same time. Same channel. Namaskar.
Sridhar Chityala: Namaskar and thank you again for your support. As Sree Iyer Ji mentioned, we are the one 147th session. We are looking forward to our 150th Milestone and then we march our way further. But we need your support and we need your patronization in helping us to grow the program, grow the channel.
Sree Iyer: Thank you, sir.
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