Sree Iyer: Namaskar. It is the 21st of May, 2021, and welcome to Daily Global Insights with Sri and Sree, episode 168. Let us jump straight to US News. Biden Administration is closing two migrant facilities amid allegations of abuse and misconduct. So what is the backstory to this?
Sridhar Chityala: The backstory to this is they have determined that two counties one in Massachusetts and another one in Georgia. I think it is the Urban County in Georgia and Bristol in Massachusetts. This couple of more counties but these are the two countries that come variability ICE detention centres have been abused. Children have been smuggled in overnight. There have been selective surgeries whether we don’t know this organ harvesting, but there are some surgeries all kinds of abuse and activities taking place and misuse of the facilities as part of this whole immigrant illegal surges that is going on. So, the Department of Homeland Security has come down quite heavily and the shutting down the centres. I don’t think we’ve seen that end of the type of activities that have sprung up at many of these detention or shelter facilities, as they call it originally, they used to be called detention, now, they will become shelter facilities. The abuser seems to be very pro-formed.
Sree Iyer: AOC and Rashida Tlaib of the squad seek to block US arms sales to Israel amid fighting with Hamas. In fact, there is an update to this. I believe the ceasefire is going to take place almost imminent now. Sir, your thoughts on these two congresswomen.
Sridhar Chityala: There are two pieces to it. One is the ceasefire is now announced the Security Council of Benjamin Netanyahu has agreed to a unilateral ceasefire after 11 days of fighting, this is about that 734 million dollars Arm sales is not just the Tlaib as well as Alexandria Cortez, but it’s also Bernie Sanders who is standing up and talking about blocking of this Aid and this precision bombs as part of that, that is going to be sent to Israel.
Now, there is a lot of opposition to this program with the Democratic party and also the County Republican side. So to what extent this is going to, you know, play a part, we don’t know. But what is evident is that this Progressive group seems to be moving towards a specific direction that is diametrically opposite universal general policy of the United States towards Israel. It’s quite tragic. And we talked yesterday about the BLM moment trying to support the Palestinians, while the fight is between Hamas and Israel.
Sree Iyer: Pentagon confirms the National Guard Mission at US Capitol Hill to end this Sunday. This is the one that was instituted around January 6th, sir?
Sridhar Chityala: Yes, it is the same thing nobody knows as to what the objective, especially when you have especially capitol police. There are lots of rumours flying around, but there is nothing substantive that has come out. Nancy Pelosi is going to announce and I think she’s running into very heavy water on the commission to inquire January 6th. But the Pentagon is saying, there is no role for National Guards and the mission ends on Sunday.
Sree Iyer: And the number of states that are dropping Federal jobless boost climbs to 22 yesterday, I think it was 19, wasn’t it?
Sridhar Chityala: We started with 15 moved to19, now it is 22 very soon, we’ll be 35. Everybody is saying, we don’t want to pay for people sitting at home but we want people to be incentivized to come to work.
Sree Iyer: House intelligence, Republicans point to Wuhan Labs as the source of the CCP virus. Now, this is something that it’s about time we heard this, I mean, the needle of Suspicion has been working towards this for a long time, sir.
Sridhar Chityala: It is and I think there has been a bipartisan investigation that is conducted, that’s part of when there was the previous administration, the Republicans used to be managing the House intelligence committee Democrats who used to be the support numbers as part of the government when the Senate changed hands now is with the Democrats and what they’re saying is, well, we have a report which says that all evidence points to the either, the University or Department of virology, Wuhan, that has concluded with the seems to be the origin of this virus. It seems to have escaped from there. And there are also alleged data about the weaponization, in terms of collaboration between the PLA and this specific lab. I think it’s time they publish this data WHO has skirted around the issue and made all kinds of inconsistent statements as you know, as we have reported again, WHO seems to, you know, wants to play soft pedal. No one knows as to why, but rather than putting the truth out into the public arena.
Sree Iyer: Several Oregon counties, I think, now the number is up to seven agree to secede into Idaho. Sir, the way I understand this is each County vote on whether they want to stay in the current state or move to a neighbouring state as long as there is a land border. Is that correct, sir?
Sridhar Chityala: Correct. As long as there is a land border, the counties are also entitled, especially when the bifurcation is based on again, voting that has taken place. So these seven counties, it was 5 now it’s 7, the 7 Counties are ruler Counties which voted for President Trump. They are by and large agricultural counties. As you know that most of the agricultural Counties have, you know, a white American population and there are being discriminatory biases in terms of the dispensation of the loans at the other kinds of stuff. So there is discomfort between the extremely liberal Oregon State model to this county which seems to be much more tilted towards the more fiscal conservative type of an approach and hence, they are moving towards Idaho.
Sree Iyer: Sir, in terms of borderline, Oregon is going to get less of the federal taxes or federal grants, you think about. Idaho will get more in terms of the demographic characteristics of the state itself. Would this also mean that Oregon would lose a few congressional seats and Idaho would gain some?
Sridhar Chityala: Yes. They would as a result. So, in other words, Red becomes Reder, Blue becomes deeper blue. So, therefore, albeit lesser number of seats, being allocated to Oregon relative to most seats being allocated to Idaho.
Sree Iyer: You know who this would have a bearing on the presidential election, we have a new twist coming in in 2024 because if more and more states decide to do this, you have a real battle on your hand. We have been saying this for a long time now, I don’t remember how many times I’ve said this in the Daily Global insights episode that Rural America is turning solid red and, and urban America, that is a city of America are turning solid blue and therefore the purpliezation has begun one goes from Blue to Red that also the intermediate colour is purple Ooh, it’s going from red to blue. Also, the intermediate colours purple, your thoughts, sir.
Sridhar Chityala: I think you are observations and your assessment is fairly spot-on and now, what we are beginning to see here is polarization and concentration of symmetric communities which have you know what you call very similar ideologies and approaches.
Doesn’t matter which policy you take whether it is illegal immigration surge, whether it is the dispensation of the unemployment benefits, whether it is to do with climate Accords, whether it is to do with the new energy policy, whether it is to do with the taxation, whether you to do with the infrastructure plan they are talking about, whether it is to do with this broad Global infrastructure for the Broadband. So any of these policies, you know, even the education what you to call as the critical theory when you look at any of these facets, what you’re beginning to see is very Progressive fragmentation of the division within the United States. We also have to be careful as to what’s going to happen to all these illegals, it’s the number is growing. The number is you know that just this year it’s come close to 200,000 or 250,000 they have stopped counting on that. What is going to happen when these people are getting relocated and there are being granted the house to voting rights and so on. So that’s the unknown factor that we need to see because the marginal difference in some of these states is very insignificant.
Sree Iyer: Sir, they may not be able to get voting rights, they may be able to do it in a different way, but officially they cannot because they have to be citizens of the United States. The burden of proof is a different matter. Let’s set the thing aside, I think there is, this is one way to try and counter what I say is the Democratic version of gerrymandering, you’re seeing another version of gerrymandering take place now. So you know very very interesting times ahead for us.
Biden capital gains tax hike proposal faces Democratic headwinds now. So neither the Republicans nor some of the Democrats are happy about this capital gains tax hike, sir.
Sridhar Chityala: Well, those who are in the borderline Districts, where they are, voting is very marginal where the difference between the Republican and the Democratic voters is hairline. And there are these vast independent sitting in the centre, making the final call, you will begin to see there are rumbles amongst the constituents within the Democratic party. And thus far they have been able to weather the storm by, you know, galvanizing everybody. But there are certain things that we spend to touch the nerve centre of many of these, independent undecided voters. One is taxation, the second is a wealth tax, and the third is some of the dispensations of the aid program that is being given, disposition of the loans. So I think that these are some of the things and then some of the industrial policies as well as the green policies, which would directly have a bearing, energy policies, which would have a direct bearing on the employment within those States.
Sree Iyer: In Indian News, India’s Foreign Minister says border issues hold up peace with China. Attempts to unilaterally change the status quo is not acceptable. So, India is also now beginning to push back at least verbally. So we have to think where this ends, sir.
Sridhar Chityala: Well, this is at an Asian conference virtual conference where almost all major countries within the region are present and many leaders from these nations are attending this virtual Summit. Obviously, the COVID and geopolitical issues, which is confronting the Asian region, this is one of South China, Sea is another. So, these were the items that were discussed. The Minister for External Affairs S. Jaishankar made a very specific and profound comment, which is to say, you know, the biggest issue that we face as far as India is concerned, Asia is concerned, that is the hegemony of China and we have a looming threat and China doesn’t want to meet its obligations, doesn’t want to disengage. But, unilaterally wants to take positions and steps which is going to be contested. India is no longer, just bile in passing, it will defend to its last breath the sovereignty of the nation. There’s no question of any compromise on that. So I think this is a very good, very forthright statement by the Honourable Minister. I think this will play its way out. And I think India is also giving a message it is not willing to budge.
Sree Iyer: India’s IT industry is fighting the COVID-19 without letting business take a hit, tip our hat to India’s IT industry, sir.
Sridhar Chityala: Tip our hats to the IT industry, they have been Innovative in terms of their work culture, work ethic, the dispensation of things. So, I think many of them are well, organized, well-orchestrated, to deal with some of the lockdowns and shutdown’s that have happened. I think we have gained reported that though we didn’t get down into the much detailed numbers most of the IT companies made record earnings during the COVID period. And they also supported all the clients in terms of the critical needs. Several crises over the past, two decades the IT industry has dealt with, in terms of meetings the client obligations. It is the first time where the location of the IT industry where the vast number of people are employed is itself been impacted by the virtue of the Pandemic. Again, they have risen to the occasion and meet the needs of the Client and adapting quite well. In fact, the point that was made in the United States was that the tech industry, rather IT, the tech industry must rub off some of its best practices in to be other Industries. So they can also adapt better. These is some of the things that have come out over the past 12 months, and some of these items we have also covered in our Global Insights program.
Sree Iyer: United Kingdom invites India to join G7 Health Minister Summit virtually.
Sridhar Chityala: Well, Mr Boris Johnson and Modi enjoy a very warm relationship. They wanted him to be present but given the Indian circumstances. But, India seems to have weathering the COVID situation the wave two. They wanted Mr Modi ji to attend the full Summit. They were three members or four members added Australia, Korea, I think South Africa and India were the four members that were added to the G7 list. He is not able to make it, but, health is a big topic because this whole vaccine stuff is quite big. Now, Asian countries are very vocal in making the statement that is the vaccine is a global property, it is not a personal property of a nation. And so you’re going to see, India is one of the key players and at the epicentre of this vaccine production plus also other types of medication associated with COVID. So, it’s imperative that you know, where India is represented and what is lost out here, is that as part of the Quad, India was mandated to make 1 billion vaccines, what’s happened to it, nobody knows. It just seems to be on the back burner. India itself is struggling with many of the key raw materials as part of the key API not being granted. Of course, that’s slowly being handled. But, we have an issue of the Quad mandate to India and we may soon see the G7 + 3 mandate coming to India. So India’s presence at the Summit is pivotal.
Sree Iyer: In global views, Israeli PM Netanyahu’s security cabinet approves a ceasefire after 11 days of violence. Looks like there was a lot of back-channel talks between Egypt and the Hamas leadership or whatever is left of it and looks like Hamas was convinced that it is in their best interest to agree to the ceasefire.
Sridhar Chityala: There’s an unofficial report which says that the Israelis were ready to invade Gaza and make a final battle to search, locate, and dismantle the infrastructure which was trying to create havoc in the Israeli neighbourhoods and Israeli cities. They clearly have taken out some key members of the leadership. They also seem to have taken out these big, big tunnels, which is the hiding place for firing the rockets from. So I think they seem to have achieved some of the objectives and with the growing pressure from the International Community, they have assessed the situation. Remember that Israel also has a West Asia Peace Accord which they have signed. So they must be some members from West Asia who have also put pressure on Israel to opt for a ceasefire.
Sree Iyer: Israel calls out China’s state-run media anti-semitism theories. So, now China is dabbling in anti-semitism fake news also, sir.
Sridhar Chityala: They are because the reason is, they have a large number of constituents. Remember, Iran is a very big, strategic partner of China. Turkey is a very big, strategic partner of China. So obviously some of these members are exerting pressure and also the progressives have an alignment and soft corner towards China. So what you have now is China, making these unwarranted comments. We’ve never seen China step into these kinds of issues. If you go back, two decades or even a decade ago, you would not see China stepping into any of these Global things. Now they are dipping their toe into every facet and trying to polarize and exert influence. Israel will have no bar of it. China has a good set of investments in Israel and for them to do what they have done is not going to go well with the Israelis.
Sree Iyer: Iranian president Hassan Rouhani says the US is ready to lift sanctions. Iran is using proxies to hurt Israel. So, would that be an admission that Hamas was actually incited by Iran?
Sridhar Chityala: There is growing evidence that points to a lot of support that came from Iranians to Hamas. They always enjoy the political patronage and support to Hamas and Hizbullah and so what is most profound here is while there were negotiations going on with Iran on the nuclear deal, Iran is making statements that are sympathetic and anti-Israel, but at the same time, the United States is negotiating a peace deal with Iran. Why these two statements are interrelated? Is there a quid pro quo? Is there something that is going on which is to say, look, this is what is going on and we are willing to give a concession and get them to sit at the table and for the Iranian president to make a statement that there is a deal coming while the western world sits and watches by is a very big political victory to Iran in terms of the statement that has come out.
Sree Iyer: Eating the cake and having it too.
Sridhar Chityala: Exactly.
Sree Iyer: Israel strikes Gaza again.
In covid-19 news, a covid-19 outbreak extends to six provinces in China. The source of the CCP virus is unknown according to China but we all have an idea where that is coming from, sir.
Sridhar Chityala: Indeed. I think we can safely say that the source is China. The fact that now it is becoming more public. The provinces are getting impacted, it’s not that there was no effect of the virus in the Chinese broader Community except that the news was suppressed. Nobody knows the number of people who have been impacted as a result of this. Some of the Chinese friends whom I talked to say that the natural wet food habits because many of them think that these originated in wet markets of China, the natural inclination towards shopping and eating food from these wet markets makes them very propensity to catch this virus. But now it’s coming out that the virus is now spreading into more provinces. It is not in control in China.
Sree Iyer: EU Parliament freezes China in ratification until Beijing lift sanctions. A little bit of a backdrop here, sir, as to what was this deal about and what is the bottleneck now?
Sridhar Chityala: The bottleneck is there was an investment deal signed in principle, not in the dotted line between the EU and China. Then there was pressure put because of the Uyghur situation and then the EU imposed sanctions on certain Chinese companies. Then China, in turn, imposed sanctions on Europe. So what you are having is this backpedalling that is going on, a tit-for-tat game that is going on. So now, the EU is saying that you lift the sanctions and then we will relook at the investment. That is what they’re saying. But they’re not going to because Biden Administration, as well as the world led by this new coalition of EU, United States, UK, and broader Japan etc are on this Uyghur issue. So therefore there’s a consensus that is building. I don’t think China is going to concede to this Uyghur stuff or Hong Kong or any of these matters. So, I think this is the backdrop of all this quid pro quo, sanctions that are coming into play and which in turn is blocking the big trade deal between China and the EU.
Sree Iyer: Sir, I find it unreal that some of the biggest partners of China are all Islamic countries. They even have the name Islamic in the name of the country and they all are willing to look the other way when it comes to Uyghur, which is also a Muslim majority area, but if India were to do something in a little bit, these guys will be up in arms, I find it very, very strange. I also find it very strange that some of the big ivy-league-educated editors of the newspapers in the United States, such as the New York Times or Washington Post, don’t find it funny that they are not applying their cranial matter to the news they are publishing.
Sridhar Chityala: This speaks about the way India conducts its matters. because you mention India, the way some of the so-called Islamic Nations conduct their business relative to the way China conducts its business. Uyghur is located within China in Xinjiang province. So, therefore, what you observe here is that the way China has conducted this is, there are no ivy league professors, there are no ivy league scholars. These people are all brutally tortured, suppressed, there are all kinds of things that the PLA has done in making sure… Some of them even have to publicly stand up and give up their religion and do things that are anti-Islamic etc.
Whereas in some of the nations, all these elite scholars occupy important positions in many of these publications, so you find that there is a differentiated approach in terms of dispensing the issue. The issue seems to be relating to the same problem, but the way it is articulated and projected varies depending on how well, and how deep-seated some of the footprint of people from those regions, which are so-called democracies or openness of societies relative to what China does.
Sree Iyer: China says US ship illegally entered South China Sea zone. So this is something that has been happening for the past several months, or is this something that is new, sir?
Sridhar Chityala: Two days. They entered the Taiwan Strait and then they have entered the South China Sea zones. So they are saying, ‘Hey, you are now inviting trouble. So we may not wait next time and we will start firing. So I think that’s the rhetoric that China is unleashing.
Sree Iyer: Cambodia’s Hun Sen says if I don’t rely on China, who will I rely on? I think these guys are also partners of China if I remember correctly, sir. And what was the context?
Sridhar Chityala: The context is, this is the ASEAN meet, and the Cambodian was asked, there is a unilateral challenging issue that faces China, what is your view? And their view is, we have capital, investment, support that has come from China, so if I am not relying on China, who else will I rely on? I’m not getting investments from the United States, I am not getting investments from Singapore, I’m getting money from China. It is very similar to North Korea. That’s why we support them. It’s very similar to some extent to Myanmar, notwithstanding the fact that Myanmar has also got investments from South Korea, has investments from Japan, has investment from Vietnam. So you find that China has does have a little bit of a footprint, Russia does have a little bit of a footprint in Myanmar, and India is cautious because it here Myanmar has collaborated on the border. So you find that in these countries where you have moral, intellectual, economic, financial support, those countries tend to align very similarly to the cold war. So there’s no surprise in Cambodia’s approach. Cambodia is a historically communist regime.
Sree Iyer: Now, let’s look at the markets, Dow climbs, 200 points amid US jobless claims dropping to 444,000. That’s a new pandemic low. Your thoughts, sir.
Sridhar Chityala: I thought, sir, that they were waiting for some good news. The good news has arrived, and the good news is the unemployment numbers. The jobless claims are at their lowest 444,000 which puts it at around 4.45%. We rose up to as high as 14.9 from 3.2. So I think we have come to the lows. The market is saying, thumbs up. So from value stocks, the money goes to growth. The gains were led by the tech stocks. There was a rebound of the tech stocks by almost 2%. Coinbase went up by 6%. So the general dispensation is everything is back. Inflation still lingers, people have just discounted for it. The 10-year rates are around 1.68%. That also is a reflection that I get out there is a rise in prices, but the market is giving a thumbs up that the economy is trying to get back on the heels.
Sree Iyer: The millionaire count in 401k and IRA accounts climbs to a record high. This is because all the money that is sloshing about in the system has moved into the stock market, isn’t it?
Sridhar Chityala: They have all allocated a high percentage to stocks. There is lot of cash that was given as well in the last 12 months continue to be given to people. How much money do you spend on food? Spend on food was tremendous during the course of this. You have seen the online retail sales of the online retailers and we just talked about most recently, Walmart and Target sales. So they had indicated that a lot of the money, they would be putting towards savings and Investments. So we had you know 305,000 401k and roughly 307,000 IRA members becoming millionaires with are on average balances crossing a million dollars in their 401k and IRA accounts. The other good number is that the average balance across the country on the 401K, this is the amount of money that people keep in their savings accounts for retirement has gone up to about $125,000. It used to be once upon a time $35,000 dollars, it has even gone it was even lower, but it has now gone up to 125. It simply means that here are the people have also changed and everybody seizes an opportunity given by, what shall I say, covid. So everybody was able to save money away and the markets responded, very well. If you have allocated, then you have seen the growth. This year already we are about 9-12%, last year we were up greater than 20% in both the markets. The year before, we were close to 30% in the markets. So everybody else has done reasonably well, those who have diligently managed their portfolios.
Sree Iyer: That brings us to a close of this week’s Daily Global Insights modules. We will be back again on Monday morning, bright and early to talk to you again about the news of the events next week. Thanks for watching. Do subscribe to our channel, Have a good day. Have a wonderful week and we don’t see you back on Monday.
Sridhar Chityala: Namaskar, Have a wonderful weekend. We will see you again on Monday.
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